Rep. Jim Renacci (R-Ohio) introduced legislation on Tuesday that would aim to more accurately depict the nation’s finances and help Congress balance the budget.
The bipartisan Federal Financial Statement Transparency Act would make the Treasury Department a nonvoting member of the Federal Accounting Standards Advisory Board (FASAB) so it wouldn’t be allowed to vote on the standards it uses to compile financial statements.
The mission of the FASAB is to enhance federal financial reporting by issuing federal financial accounting standards and providing further guidance.
“Establishing FASAB was a step in the right direction, but it lacks independence – opening the door to political influence,” Renacci said. “At a time when we are facing a $17.5 trillion debt, hardworking American taxpayers deserve an accurate picture of our government’s finances.”
Under the current system, the Treasury Department can omit liabilities like social insurance funds from its balance sheets, and the Government Accountability Office isn’t able to conduct “clean audits” of consolidated financial statements.
“As a CPA and former business owner for nearly 30 years, I know how critical it is to have the financial information necessary before making a decision about how to best move an organization forward,” Renacci said. “In Washington, we know that our current path is unsustainable, but do we really know where we stand fiscally? The answer is that we don’t, and neither do the American people thanks to the federal government’s incomplete financial statements.”
Rep. John Carney (D-Del.), a co-sponsor of the bill, said the measure is a “straightforward” solution to a problem that Congress has ignored for a long time.