[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5129 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5129
To amend title 31, United States Code, to require certain additional
calculations to be included in the annual financial statement submitted
under section 331(e) of that title.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 6, 2006
Mr. Chocola (for himself, Mr. Kirk, and Mr. Cooper) introduced the
following bill; which was referred to the Committee on Government
Reform
_______________________________________________________________________
A BILL
To amend title 31, United States Code, to require certain additional
calculations to be included in the annual financial statement submitted
under section 331(e) of that title.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Truth in Accounting Act of 2006''.
SEC. 2. PREPARATION OF NET PRESENT VALUE CALCULATION OF MAJOR
LIABILITIES AND COMMITMENTS OF THE FEDERAL GOVERNMENT.
(a) In General.--Section 331(e) of title 31, United States Code, is
amended by adding at the end the following:
``(3) Net present value calculation and other
calculations.--
``(A) Matters covered.--The financial statement
shall include a calculation under policies in effect
during the fiscal year covered by the statement of the
net present value of the overall liabilities and
commitments of the United States Government. The
calculation shall include--
``(i) the outstanding debt held by the
public;
``(ii) calculations of the net present
value of commitments and receipts of the
Federal Old-Age and Survivors Insurance (OASI)
Trust Fund, the Federal Disability Insurance
(DI) Trust Fund, the Federal Hospital Insurance
(HI) Trust Fund, and the Federal Supplementary
Medical Insurance (SMI) Trust Fund using the
most recent available long-term, intermediate
projections by the Trustees of such Trust Funds
of revenues, expenditures, and discount
factors, as represented in such annual reports;
``(iii) calculations of the net present
value of commitments and receipts of the
Railroad Retirement and Black Lung (part C)
programs;
``(iv) calculations of the net present
value of commitments and receipts of the
Federal retirement and health insurance
systems, both civil and military.
``(B) Time horizon.--(i) For each calculation under
subparagraph (A), calculations shall be provided for--
``(I) a 75-year horizon; and
``(II) an indefinite time horizon.
``(ii) For the 75-year horizon under clause (i)(I),
each calculation shall take each year's projected
expenditures minus revenues, divide this difference by
the projected discount factor for that year, and add
the resulting 75 annual discounted flows to obtain the
program's net present value imbalance. The long-term
discount and growth rates used in these calculations
shall be discussed in the financial statement and shall
be consistent with those used by the Department of
Treasury and other Government agencies with regard to
other long-term financial calculations. For purposes of
the calculations in clauses (ii), (iii), and (iv) of
subparagraph (A), revenues shall include payroll taxes
as allocated by law to the respective Trust Funds
(currently the case for OASI, DI, and HI), participant
premiums and State transfer income (for SMI), general
revenue receipts from the taxation of benefits, as
currently allocated by law to the OASI, DI, and HI
Trust Funds, and funding for the Federal retirement and
health insurance systems, both civil and military. For
purposes of this calculation, revenues shall not
include interest income on Trust Fund and transfers of
general revenue to SMI, Social Security, or Medicare.
``(iii) For the indefinite time horizon under
clause (i)(II), the calculations shall follow the
procedures provided in clause (ii), but shall be based
on extended projections for a number of years
sufficiently beyond 75 years that would result in the
present value sum increasing by less than 0.05 percent
if an additional year were added to the projection.
``(C) Generational imbalance calculation.--The
financial statement shall include a program-by-program
calculation under policies in effect during the fiscal
year covered by the statement of the net present value
of benefits and projected benefits to current
participants of the programs described in clauses (ii),
(iii), and (iv) of subparagraph (A), including the
present value of projected benefits to current
participants, less the present value of projected
contributions and earmarked taxes paid by, or on behalf
of, current participants less the current trust fund
balances.
``(D) Fiscal imbalance calculation.--The financial
statement shall include a program-by-program
calculation under policies in effect during the fiscal
year covered by the statement of the net present value
of benefits and projected benefits to current and
future participants of the programs described in
clauses (ii), (iii), and (iv) of subparagraph (A),
including the present value of projected benefits to
current and future participants over the indefinite
horizon, less the present value of projected
contributions and earmarked taxes paid by, or on behalf
of, current and future participants over the indefinite
horizon, less the current trust fund balances.
``(E) Presentation of public debt.--The financial
statement shall include the total amount of outstanding
public debt (included in the statement pursuant to
subparagraph (A)(i)), plus the total amount of fiscal
imbalance calculations (included in the statement
pursuant to subparagraph (D)), set forth separately by
amount of debt per person, per fulltime worker, and per
household.
``(F) Methods used.--The financial statement shall
include the assumptions and details of the methods used
in making the calculations required under subparagraph
(A). It shall separately identify and provide a
detailed description of the methods and assumptions
used in making projections of tax revenues, premiums,
other receipts from all sources, including inter-fund
transfers and interest income on securities held in
trust funds, benefit outlays distinguished by the type
of benefit, and administrative expenses. The financial
statement shall also provide details regarding
demographic assumptions (such as fertility, mortality,
immigration, and labor-force participation rates),
dependency ratios, and economic assumptions (such as
trust fund interest rates, discount rates, revenue and
benefit growth rates, health-care expenditure growth
rates, productivity growth rates, and inflation rates).
The information should include a description of all
other intermediate steps and variables used and
projected in making the calculations.''.
(b) Effective Date.--The information required under paragraph (3)
of section 331(e) of title 31, United States Code, as added by
subsection (a), shall be included in the first financial statement
required under that section after the date of the enactment of this
Act.
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