Treasury, OMB assemble brief on fiscal challenges

The Treasury Department and Office of Management and Budget have produced a short document designed to explain fiscal issues that could overwhelm the government's resources, such as providing Social Security and Medicare for aging baby boomers. The eight-page “Citizens' Guide” highlights some short- and long-term financial information in the 2007 Financial Report of the United States Government. The report, released Feb. 14, is designed to help people understand the federal government’s “true financial condition and fiscal challenges,” said Comptroller General David Walker. “Unless the government makes fundamental changes in its budget, entitlement, discretionary spending and tax policies — and soon — the coming surge of spending on Social Security and Medicare will bring a fiscal tsunami of spending and debt that threatens to swamp our ship of state, damaging the U.S. economy,” Walker said. “Policy-makers must look to the future and face squarely the need for fundamental changes to a range of government programs, policies and activities,” he added. “In the next 35 years, the automatic spending portion of the budget will completely swallow all available revenue, which means that resources will not be available for some of the federal government’s basic responsibilities, such as national defense and homeland security,” OMB said. In another step to explain complex financial information, the Securities and Exchange Commission launched an application Feb. 15 to help investors analyze the financial results of public companies. Financial Explorer, located at SEC’s Web site, explains corporate financial performance with diagrams and charts. It uses financial information as interactive data in Extensible Business Report Language, or XBRL. Users can generate financial ratios, graphs and charts with the software from corporate information, such as earnings, expenses, cash flows, assets and liabilities, and compare the data across competing public companies, said SEC Chairman Christopher Cox. “With Financial Explorer or another XBRL viewer, investors will be able to quickly make sense of financial statements,” he said. SEC also has two other online viewers. One can be be used to compare what 500 of the largest U.S. companies pay their top executives, and the other gathers and analyzes key financial disclosures filed by public companies.