Fiscal Sustainability OECD Accruals Symposium Fiscal Sustainability Tom Allen FASAB Chairman

Fiscal Sustainability Reporting Purpose Provide information to help readers determine whether future budgetary resources will likely be sufficient to sustain public services and to meet obligations as they come due.  Enhance understanding of long-term fiscal issues

Fiscal Sustainability Reporting Approach Fiscal Sustainability Reporting Task Force Technical knowledge and expertise in communicating information Current Proposals Long-term projections Present values of receipts and outlays for major programs, such as Social Security and Medicare, and all other Present values of receipts and outlays also as a percent of present value of GDP Narrative discussion and graphs Consistent time horizons for all components of report Summary Display with net present value as the “bottom line” – fiscal imbalance The Board is working with a Fiscal Sustainability Reporting Task Force. Task Force members include Enterprise Institute, the Cato Institute, the Brookings Institution, and the Urban Institute; the Chief Actuaries for Social Security and Medicare; technical experts from the Office of Management and Budget (OMB), the Congressional Budget Office (CBO), the Treasury Department, and the Government Accountability Office (GAO); members of Congress; and academics in the areas of public policy and communications. Policy assumptions address the level of services provided by the federal government as well as the framework for assessing taxes and fees.  Economic assumptions address the economic factors that are not under the direct control of the Federal government (for example, population demographics, inflation and growth in Gross Domestic Product (GDP)).   The Board indicated that staff should develop broad guidelines for assumptions rather than detailed rules.

Fiscal Sustainability Reporting Issues What time horizon should be used for projections presented in graphics and summary display? Finite Infinite Both finite and infinite What and how information should be displayed? Time horizon Appropriate level of disaggregation of inflows and outflows What ratios are needed What narrative and graphics are needed Communicate as basic or RSI within whole of government report?