If Congress followed the same accounting rules companies, states and local governments must follow—namely including retirement commitments in financial statements—it would have reported a deficit of $5 trillion instead of $1.3 trillion. Congress exempts itself from including the cost of promised retirement benefits. Social Security, Medicare and other retirement programs totaled $3.7 trillion in 2011. The total breaks down to $42,054 per U.S. household. The average household income is $49,445, according to the Census report. Jim Horney, a former Senate budget staff expert, says Congress can change what it owes by cutting benefits or lifting taxes, therefore, retirement programs should not count as part of the deficit. “It’s not easy, but it can be done,” Horney said. “Retirement programs are not legal obligations.”
Real Federal Deficit Dwarfs Official Tally (USA Today)
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