WASHINGTON DESK - The budget surplus announced by president Clinton in his State of the Union speech has turned out to be a hoax. In fact, the Government Accounting Office announced on Tuesday that the government is technically bankrupt with assets of only $1.6 trillion and liabilities at $6.6 trillion. That's a net position of a negative $5 trillion, at the end of the 1997 budget year.
On January 29, 1998 this column reported that president Clinton, in his 'State of the Union' speech had misled the American people when he told them
'...there would be projected budget surpluses of $200 billion over the next five years.'
The Daily Republican Newspaper's story was accurate in its economic analysis showing insurmountable deficit is well into the next century. The General Accounting Office, which reviewed the financial statement prepared for 24 major agencies, said this week, it had documentation that billions of dollars in government transactions and property can't be properly accounted for, billions of dollars in unaccounted for government assets
'Improper accounting weaknesses...prevent the government from accurately reporting a large portion of its assets, liabilities and costs...' the GAO reported in a review that will be the subject of a congressional hearing beginning today.
The disclosure of the actual fiscal status of the Clinton administration was the result of the 1994 law that ordered the White House to produce an audited financial statement by April 1, 1998.
That law directed the GAO, the investigative arm of Congress, to audit those statements, performing the same function as outside auditors perform for financial statements of companies in the private sector.
Using that criteria, the GAO gave a failing grade to all but seven of 24 major government agencies reviewed. Among those agencies with failing grade was the Social Security Administration.
The congressional auditors said the Clinton administration could not
properly account for billions of dollars of property, equipment and
supplies and was unable to determine the full extent of improper
payments made in many programs '...that are estimated to involve
billions of dollars annually..
The GAO also faulted the Clinton administration for its inability to
properly estimate the true cost of various liabilities including obvious
liability for payment of retired government workers' basic pensions and health care benefits.
The Clinton administration explained the discrepancies to auditors attempting to make light of the discrepancies with the excuse that the complexity of the federal government made it impossible for them to come up with a single bottom-line figure of the government's fiscal condition.
One of the biggest embarrassments of the Clinton administration has been admitting it has not included on the liability side of the ledger, the $647 billion the government has borrowed from the Social Security trust fund to cover Clinton's spending programs since entering office in 1992.
With this glaring omission and others, the Clinton administration's 'potential surpluses' evaporate in the face of audited assets of $1.6 trillion and actual liabilities at $6.6 trillion for a net position of a negative $5 trillion.
The auditor's findings, submittd to the White House in September 1997, were in the White House when president Clinton, in January 1998, announced a vast spending program that his administration would pursue from what he said then, were 'surpluses' his administration had 'produced' from its management policies, since entering office.
According to the auditors, over $900 billion debt in the form of Treasury bonds is also owed to the public that cannot be repaid, at this time.
This picture comes into even sharper focus, when Americans are reminded of the continuing effect Clinton's spending has on the sudden growth of the best kept secret of his administration, the
National Debt skyrocketing today to more than $5.5 trillion.