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8 LONG TITLE
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
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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