http://www.azcentral.com/arizonarepublic/news/articles/0419portman-deficit0419.html
Budget pick facing huge deficit Bush aide may find figure twice the size of last year's
Kevin G. Hall Knight Ridder Newspapers Apr. 19, 2006 12:00 AM
WASHINGTON - Awaiting Rob Portman when he becomes director of the White House Office of Management and Budget is this chilling fact: By one measure, the government's budget deficit is actually twice as big as last year's official total of $319 billion.
President Bush on Tuesday picked Portman, a family friend and the current U.S. trade representative, to head the OMB.
The former Ohio congressman, 50, is widely praised for his smarts and pluck. He'll need all that and more for his new job. If confirmed by the Senate, Portman must grapple with chronic budget deficits and severe government accounting problems to head off a looming fiscal crisis.
"Director Portman will be inheriting the most dire long-term fiscal outlook we've ever had," said Brian Riedl, the chief budget analyst for the Heritage Foundation, a conservative think tank. "The first baby boomers retire in 18 months, and the Social Security, Medicare and Medicaid costs are set to explode. On top of that, he'll be dealing with a Congress that's absolutely addicted to runaway spending and pork!"
Conservatives such as Riedl complain that federal spending has grown 45 percent since 2001 and that the budget deficit for fiscal 2005 was a whopping $319 billion.
But it's actually more. When Treasury Secretary John Snow signed off in mid-December on the 2005 Financial Report of the United States Government, the official federal balance sheet, he acknowledged that a parallel accounting method showed the budget deficit was actually about $760 billion.
That's a difference of $441 billion.
The $319 billion deficit is based on cash-basis accounting, which tracks money flowing in and out of federal coffers as payments are made or received.
But since 1997, the government also has estimated the present-day cost of promised future spending, using accrual-basis accounting, which is the norm in corporate America.
Think of it as the government making a purchase on a credit card. The goods and services are paid for in the future, but they're counted as liabilities immediately, such as pension commitments to veterans.