Ryan Pushes Government to Overhaul Own Budgeting, Accounting Standards

WASHINGTON, DC – U.S. Congressman Paul Ryan (R-Janesville) today will introduce legislation to reform the federal government’s budgeting and accounting procedures in order to provide a more accurate picture of the federal government’s finances and make other needed improvements to rein in excessive spending. Ryan’s legislation, the "Budget Fraud Elimination Act," gives Congress the necessary tools to fight overspending and corrects poor government accounting practices.

"Yesterday we passed legislation that tackles shoddy accounting and fraud on Wall Street, now it’s time to clean up spending and accounting in Washington," Ryan said. "There should be no double standard when it comes to the federal government. Taxpayers have every right to hold Congress and the administration accountable, just as shareholders should hold company executives accountable for their business practices."

"The government has an arsenal of tricks that it uses to hide excess spending. Lumping Social Security and other trust funds together with other accounts when calculating government debt, engaging in non-emergency ‘emergency spending,’ larding omnibus spending bills with pork barrel spending that doesn’t belong there – these are all shortcuts to overspending," Ryan said. "My legislation addresses these problems, and it demands honest government accounting. The bill basically overhauls the federal budget and accounting process."

"One of the most outrageous procedures in the congressional budget process is the fact that if an amendment to cut or eliminate spending is passed by Congress, the savings of that action must go toward spending somewhere else in government, not toward debt or tax reduction," Ryan said. "This bill fixes that process."

Ryan’s legislation includes the following provisions:

Improves Government Budget and Accounting Standards

• Separates the Social Security Trust Fund and other types of intragovernmental obligations from public debt. This will prevent Congress and the administration from hiding excessive spending and public debt increases in the government’s own accounts.

• Establishes biennial budgets to give Congress time to focus on government performance reviews and increase congressional oversight of agency efficiency. Appropriating during one year and conducting oversight hearings the next will help ensure that taxpayer money is being spent effectively.

• Requires government agencies to account for unfunded liabilities, just as private companies do, by implementing accrual accounting for federal pension systems and retirement health benefits. This would not change any of the benefits provided by these programs or the level of employee contributions. It would simply give an honest accounting of budget requests by federal agencies. This year’s House budget resolution allowed for funds to make this transition.

• Defines "emergency" spending as sudden, urgent, unforeseen and temporary spending and creates a point of order (a way for Members of Congress to object to a violation of a rule and to demand that the rule be enforced) if an emergency spending bill violates this definition. This means that any Member can force an up or down vote on a single pork barrel spending item. Any emergency spending cannot be added to the budget baseline.

• Prevents pork from being added to large, end-of-session omnibus spending bills. This provision allows for a separate vote on each unrelated spending provision added to those large appropriation bills.

• Gives the President virtual line-item veto powers through a new enhanced rescission procedure. Under this bill, the President could carve out "pork" in spending bills and send it back to Congress to be voted on again.

• Allows Members of Congress to secure real savings from amendments that cut spending. This provision creates a "spending accountability reserve" to save money initiated by spending cuts and allows Members to dedicate that savings to debt reduction or tax relief. Currently, savings from spending cuts must get reallocated to spending in other parts of the appropriations process (i.e. spent somewhere else in government.)

• Removes the Senate rule that makes tax relief temporary. Specifically, removes the "Byrd Rule" point of order from conference reports.

The national taxpayer group Council for Citizens Against Government Waste has expressed strong support for Ryan’s legislation. The group’s president, Thomas Schatz, has said the bill "would help restore common sense and realistic budget practices in Washington."