Chief Sponsor: Steve Eliason

Senate Sponsor: Curtis S. Bramble


9     General Description:
10          This bill strongly urges the federal government to recognize its unreported liabilities in
11     its financial statements and enact changes that will resolve the national debt crisis.
12     Highlighted Provisions:
13          This resolution:
14          ▸     strongly urges the federal government to recognize its unreported liabilities in its
15     financial statements and to formally include all of its obligations in national debt
16     computations; and
17          ▸     strongly urges the leaders of the United States in the legislative and executive
18     branches of government to enact changes that will resolve the escalating national
19     debt crisis.
20     Special Clauses:
21          None

23     Be it resolved by the Legislature of the state of Utah:
24          WHEREAS, one of the most basic characteristics of financial reporting is that financial
25     statements provide relevant and reliable information to users for decision making;
26          WHEREAS, accounting standard setting bodies, such as the Financial Accounting
27     Standards Board, set generally accepted accounting principles (GAAP) so that investors,

28     policymakers, citizens, and others can have access to relevant and reliable financial
29     information;
30          WHEREAS, management of public companies must follow GAAP in order to maintain
31     the confidence of investors as well as avoid regulatory entanglements, legal liability, and
32     criminal prosecution;
33          WHEREAS, when entities or individuals have deviated from GAAP, the results have
34     brought about disastrous consequences for corporations and individual investors;
35          WHEREAS, for example, when Enron Corporation failed, thousands of people lost
36     their jobs and thousands of investors collectively lost billions of dollars;
37          WHEREAS, Enron was liable for billions of dollars in obligations that were not
38     reported on its balance sheet as liabilities, which made it difficult for analysts and investors to
39     clearly understand the true picture of Enron's financial position prior to its collapse;
40          WHEREAS, GAAP requires that a public company reports its obligations as a liability
41     on its balance sheet;
42          WHEREAS, in particular, GAAP requires that estimated retirement benefits be
43     recognized as a liability on the balance sheet;
44          WHEREAS, companies that have obligations to pay their current and former employees
45     for health care and retirement benefits are required to recognize and report these obligations as
46     a liability on their balance sheet;
47          WHEREAS, the United States government has an obligation to pay citizens' future
48     retirement benefits and health care benefits, primarily through Social Security and Medicare;
49          WHEREAS, United States taxpayers are rightfully entitled to these benefits because
50     taxpayers regularly contribute Social Security and Medicare premiums to the federal
51     government through payroll deductions;
52          WHEREAS, the United States government does not currently include most of its
53     obligations for retirement and health care benefits as liabilities in its financial statements;
54          WHEREAS, the amount of reported federal debt is staggering;
55          WHEREAS, as of the end of fiscal year 2014, total reported liabilities of the United
56     States, including debt held by the public and debt held by the United States government, were
57     over $18 trillion;
58          WHEREAS, noted professor and accountant Robert D. Allen, Ph.D., writing for the

59     Journal of Accounting Education in 2013, observed that "it took more than 200 years - from
60     the time of George Washington until 1982 - to accumulate $1 trillion in gross federal debt. In
61     the last 30 years gross federal debt has increased by an additional $15 trillion";
62          WHEREAS, the amount of unreported federal debt is even more staggering;
63          WHEREAS, estimates of total federal debt, including unreported liabilities, are at least
64     $70 trillion;
65          WHEREAS, according to some studies, the total federal debt, including unreported
66     liabilities, is more than $200 trillion;
67          WHEREAS, the United States Government Accountability Office predicts that the
68     amount of federal debt, both reported and unreported, will continue to increase over the next
69     two decades as the baby-boomer generation continues to retire;
70          WHEREAS, formally recognizing unrecorded liabilities is an important step that will
71     help Congress and the public to better understand the extent of the problems associated with
72     the national debt and deficit spending; and
73          WHEREAS, formally recognizing these liabilities as part of the national debt will also
74     place Congress and the public in a better position to evaluate spending priorities and make
75     equitable spending decisions in the future:
76          NOW, THEREFORE, BE IT RESOLVED that the Legislature of the state of Utah
77     strongly urges the federal government to recognize its unreported liabilities in its financial
78     statements and to formally include all of its obligations in national debt computations.
79          BE IT FURTHER RESOLVED that the Legislature of the state of Utah strongly urges
80     the leaders of the United States in the legislative and executive branches of government to
81     enact changes that will resolve the escalating national debt crisis.
82          BE IT FURTHER RESOLVED that the Legislature of the state of Utah calls on Senator
83     Orrin Hatch, Senator Mike Lee, Representative Rob Bishop, Representative Jason Chaffetz,
84     Representative Chris Stewart, and Representative Mia Love to sponsor or cosponsor legislation
85     in Congress to address unreported liabilities in national debt computation and vote in favor of
86     federal legislation designed to address the national debt.
87          BE IT FURTHER RESOLVED that a copy of this resolution be sent to the President of
88     the United States, the Majority Leader of the United States Senate, the Speaker of the United
89     States House of Representatives, the Financial Accounting Foundation, the Government

90     Accounting Standards Board, the Financial Accounting Standards Board, the Congressional
91     Budget Office, the United States Government Accountability Office, and the members of
92     Utah's congressional delegation.

Legislative Review Note
     as of 5-16-14 1:46 PM

Office of Legislative Research and General Counsel