NEWS - Bipartisan Bill Would Strengthen Federal Financial Management

WASHINGTON, D.C. – Senate Budget Committee Chairman Mike Enzi (R-WY) this week introduced bipartisan legislation to strengthen federal financial management by updating the Chief Financial Officers (CFO) Act of 1990. The CFO Act created a new foundation for federal financial management and established a fiscal management reporting and leadership structure.

The legislation, S. 3287, is cosponsored by Senators Mark Warner (D-VA), Chuck Grassley (R-IA), Ron Johnson (R-WI), David Perdue (R-GA), and James Lankford (R-OK). The measure has been endorsed by the Data Coalition, Citizens Against Government Waste, National Taxpayers Union, the Project on Government Oversight, the R Street Institute, Truth in Accounting, and Taxpayers for Common Sense.

“While financial reporting at the agency-level has improved, the federal government is still unable to get a clean opinion on it financial statements. Often times, the federal government cannot show the relationship between dollars spent and results achieved,” said Chairman Enzi. “This legislation will lead to better financial and performance data and increase accountability in government programs and operations. This will help improve government-wide financial management and ensure taxpayer dollars are safeguarded.”

“The Chief Financial Officers Act was hugely instrumental in promoting financial management at the federal level, and laid the groundwork for a lot of the improvement we’ve seen in the 30 years since. At this milestone though, it’s about time we address where we’re still falling short,” said Senator Warner. “This legislation will help boost financial accountability in our government by promoting consistency across agencies, making it easier for them to carry out long-term initiatives and planning, and empowering them to make more informed and strategic policy decisions through the use of performance data. It’s my hope that this legislation will help modernize our financial management structures, and renew Americans’ trust that their government is making smart, informed decisions about how we use taxpayer dollars.”

“It’s been three decades since the federal government’s financial management systems we use today were created,” said Senator Grassley.  “All too often, problems in government can be attributed to complex or outdated systems. This legislation will help modernize how government departments and agencies manage and monitor taxpayer funds and will enhance standards, streamline reporting and improve performance.”

“This legislation updates the responsibilities of CFOs in agencies across the government,” said Senator Johnson.  “These long-overdue reforms will hopefully help agencies become more effective and efficient in an increasingly complex world.”

The bill would:

• Standardize CFO responsibilities across government andenhance strategic decision-making;
• Provide deputy CFOs with appropriate authority to ensure continuity in agency financial management operations when CFO vacancies occur;
• Revise and update government-wide and agency-level financial management planning requirements to make sure they are reasonable and allow Congress to track agencies’ adherence to cost and date targets. Additionally, the bill would require the government-wide plan to include actions for improving financial management systems, strengthening the federal financial management workforce, and better linking performance and cost information to budget decision-making;
• Require the development of financial management performance-based metrics to determine the status and progress agencies are making towards achieving cost-effective and efficient government operations.  The bill would also require this information to be included in the government-wide and agency-level financial management plans and status reports; and
• Strengthen internal controls by requiring agency management to identify key financial management information needed for effective financial management and decision making, and to annually assess and report on the effectiveness of internal control over financial reporting and other key financial management information.

New CBO Budget Outlook Shows Dramatically Higher Long-Term Debt and Deficits

WASHINGTON, D.C. – Senate Budget Committee Chairman Mike Enzi (R-WY) said the Congressional Budget Office’s (CBO) Budget and Economic Outlook for fiscal years 2020 through 2030 shows the country on an unsustainable fiscal path, with debt and deficits rising sharply. CBO’s extended projections show that the Bipartisan Budget Act of 2019 and legislation enacted last year that repealed the Cadillac tax will add massive amounts of debt over the long-term, which will dampen economic output and increase interest rates over time.

“CBO once again highlights that our mandatory spending programs, led by Social Security and Medicare, continue to grow faster than the revenue supporting them,” Chairman Enzi said. “It is crucial to address this imbalance and put the federal government on a long-term, sustainable fiscal path. This will allow us to preserve these programs for those who depend on them today, while safeguarding them for future generations tomorrow.”

CBO’s report showed that the long-term fiscal outlook has significantly worsened in the last seven months, due largely to legislation enacted in that time. Relative to projections in CBO’s June 2019 outlook, debt held by the public as a percentage of gross domestic product (GDP) three decades from now is projected to be 30 points higher. CBO’s report shows the nation’s debt-to-GDP ratio, which compares the nation’s debt to its total economic output for the year, will reach 180 percent by 2050.  This is nearly 75 percentage points higher than the previous record set just after World War II. 

“CBO’s new budget outlook shows the long-term consequences of Congress’s spendthrift ways,” said Chairman Enzi.  “Instead of working together to confront our unsustainable fiscal course, the bipartisan consensus in Washington over the last year seems to be to double-down on reckless fiscal policies. It is long past time for lawmakers to get serious about our growing debt and deficits, which threaten economic growth and opportunity for our children and grandchildren.”

According to CBO:

• Federal debt held by the public is projected to grow from 81 percent of GDP in 2020 to 98 percent in 2030—its highest level since 1946, and twice the average over the past 50 years;
• High and rising federal deficits would reduce national saving and income, boost the government’s interest payments, limit policymakers’ ability to respond to unforeseen events, and increase the likelihood of a fiscal crisis;
• Federal outlays are projected to rise from $4.6 trillion in 2020 to $7.5 trillion in 2030, with growth in spending on Social Security, Medicare, and interest on the debt accounting for over two-thirds of the increase;
• Federal outlays are projected to grow from 21 percent of GDP in 2019 to 23.4 percent in 2030, at which point spending as a percent of GDP would be 3.0 percentage points higher than its 50-year average of 20.4 percent; and
• Medicare’s Hospital Insurance trust fund is projected to be exhausted by 2025 while the Highway trust fund will be exhausted by 2022.