WASHINGTON — Our “lawyer-filled Congress mismanages your money and cooks our national books using numbers like a drunk uses a lamp post for support,” and kicks the can down the road to future generations by sending the kids the bill. That indictment was sounded in an interview with NewsMax.com by professional CPA and former Congressman Joseph DioGuardi.
Furthermore, his 1992 book “Unaccountable Congress: It Doesn’t Add Up” was endorsed by some heavy hitters on fiscal policy, including J. Peter Grace, chairman of Citizens Against Budget Waste; William Simon, former treasury secretary; and James C. Miller 111, former OMB director and later chairman of Citizens for a Sound Economy.
Beyond that, his advocacy of sound accounting practices–as opposed to the Enronesque accounting the feds have used for years—coincides with an opinion expressed (in different language) by Federal Reserve Chairman Alan Greenspan.
Citing an April 1 Associated Press (AP) story quoting the fed boss as urging the government “to more clearly [lay out] the true costs and benefits of changes to various taxes and outlay programs [i.e.-the accrual accounting system],” DioGuardi’s letter to Greenspan noted that such sound methodology (among other things, listing the debt when it is incurred, not when the government gets around to paying it) is also the law of the land. Congress just ignores it.
“It may surprise you to hear that the federal government is legally on the accrual system of accounting already,” the New Yorker wrote the FRB chairman. “Congress passed the law in 1950 to carry out the recommendations of two Hoover Commissions on government management. I am sure that in signing the act instituting the accrual system, President Truman thought he was bringing a new era of accounting and fiscal sanity to Washington.”
DioGuardi says the national debt, officially pegged at $6 trillion, is actually closer to $20 trillion, to be paid by our children and grandchildren. That is why the fifth chapter in his book defines this “smoke and mirrors” and as “Congressional Child Abuse.”
“Unfortunately,” he tells Greenspan, “the federal government simply ignored the law, and for more than 50 years it has continued to use the far inferior and easily manipulated cash basis of accounting for budgeting and reporting.”
However, he acknowledged there’s no practical “legal means to enforce” the law. Thus he hopes Greenspan’s high profile “bold statement” can renew debate on the issue.
Those who cite DioGuardi’s concern as an argument against President Bush’s proposed tax cuts will be disappointed.
He favors “the right kind of tax reduction [that] can stimulate investment.”
“I think avoiding double taxation is also a good thing,” endorsing an issue President Bush has raised in his tax cut package, “We’ve said for years that it’s not fair to tax corporate profits twice.” Moreover, tax cuts that stimulate the economy can work against adding to the debt.
The former New York congressman says his concern with the debt should not be confused with “economic policy or political decisions.”
“I’m not trying to tell President Bush or anybody how to allocate the money. That is a political decision,” DioGuardi told NewsMax.com, “What I’m saying is you really want to know what you have so you can be prepared to allocate the right amount so we don’t further increase out national debt,” the point that Greenspan has made.
Bottom line: This is a genuine crisis that could impose a fiscal calamity on our heirs. DioGuardi, one of the rare CPAs to have served on Capitol Hill, says it’s time for a lawless Congress to obey the law, just as it expects the Enrons to avoid sleazy accounting practices.