I 

109TH CONGRESS 

2D SESSION H. R. 5129 

To amend title 31, United States Code, to require certain additional calculations to be included in the annual financial statement submitted under 

section 331(e) of that title. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 6, 2006 

Mr. CHOCOLA (for himself, Mr. KIRK, and Mr. COOPER) introduced the 

following bill; which was referred to the Committee on Government Reform 

A BILL 

To amend title 31, United States Code, to require certain 

additional calculations to be included in the annual financial statement submitted under section 331(e) of that 

title. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Truth in Accounting 

5 Act of 2006’’. 


wwhite on PROD1PC65 with BILLS
2 

•HR 5129 IH 

1 SEC. 2. PREPARATION OF NET PRESENT VALUE CALCULA2 TION OF MAJOR LIABILITIES AND COMMIT3 MENTS OF THE FEDERAL GOVERNMENT. 

4 (a) IN GENERAL.—Section 331(e) of title 31, United 

5 States Code, is amended by adding at the end the fol6 lowing: 

7 ‘‘(3) NET PRESENT VALUE CALCULATION AND

8 OTHER CALCULATIONS.— 

9 ‘‘(A) MATTERS COVERED.—The financial 

10 statement shall include a calculation under poli11 cies in effect during the fiscal year covered by 

12 the statement of the net present value of the 

13 overall liabilities and commitments of the 

14 United States Government. The calculation 

15 shall include— 

16 ‘‘(i) the outstanding debt held by the 

17 public; 

18 ‘‘(ii) calculations of the net present 

19 value of commitments and receipts of the 

20 Federal Old-Age and Survivors Insurance 

21 (OASI) Trust Fund, the Federal Disability 

22 Insurance (DI) Trust Fund, the Federal 

23 Hospital Insurance (HI) Trust Fund, and 

24 the Federal Supplementary Medical Insur25 ance (SMI) Trust Fund using the most re26 cent available long-term, intermediate proVerDate Aug 31 2005 22:31 Apr 13, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5129.IH H5129

wwhite on PROD1PC65 with BILLS
3 

•HR 5129 IH 

1 jections by the Trustees of such Trust 

2 Funds of revenues, expenditures, and dis3 count factors, as represented in such an4 nual reports; 

5 ‘‘(iii) calculations of the net present 

6 value of commitments and receipts of the 

7 Railroad Retirement and Black Lung (part 

8 C) programs; 

9 ‘‘(iv) calculations of the net present 

10 value of commitments and receipts of the 

11 Federal retirement and health insurance 

12 systems, both civil and military. 

13 ‘‘(B) TIME HORIZON.—(i) For each cal14 culation under subparagraph (A), calculations 

15 shall be provided for— 

16 ‘‘(I) a 75-year horizon; and 

17 ‘‘(II) an indefinite time horizon. 

18 ‘‘(ii) For the 75-year horizon under clause 

19 (i)(I), each calculation shall take each year’s 

20 projected expenditures minus revenues, divide 

21 this difference by the projected discount factor 

22 for that year, and add the resulting 75 annual 

23 discounted flows to obtain the program’s net 

24 present value imbalance. The long-term dis25 count and growth rates used in these calculaVerDate Aug 31 2005 22:31 Apr 13, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5129.IH H5129

wwhite on PROD1PC65 with BILLS
4 

•HR 5129 IH 

1 tions shall be discussed in the financial state2 ment and shall be consistent with those used by 

3 the Department of Treasury and other Govern4 ment agencies with regard to other long-term fi5 nancial calculations. For purposes of the cal6 culations in clauses (ii), (iii), and (iv) of sub7 paragraph (A), revenues shall include payroll 

8 taxes as allocated by law to the respective Trust 

9 Funds (currently the case for OASI, DI, and 

10 HI), participant premiums and State transfer 

11 income (for SMI), general revenue receipts from 

12 the taxation of benefits, as currently allocated 

13 by law to the OASI, DI, and HI Trust Funds, 

14 and funding for the Federal retirement and 

15 health insurance systems, both civil and mili16 tary. For purposes of this calculation, revenues 

17 shall not include interest income on Trust Fund 

18 and transfers of general revenue to SMI, Social 

19 Security, or Medicare. 

20 ‘‘(iii) For the indefinite time horizon under 

21 clause (i)(II), the calculations shall follow the 

22 procedures provided in clause (ii), but shall be 

23 based on extended projections for a number of 

24 years sufficiently beyond 75 years that would 

25 result in the present value sum increasing by 


wwhite on PROD1PC65 with BILLS
5 

•HR 5129 IH 

1 less than 0.05 percent if an additional year 

2 were added to the projection. 

3 ‘‘(C) GENERATIONAL IMBALANCE CAL4 CULATION.—The financial statement shall in5 clude a program-by-program calculation under 

6 policies in effect during the fiscal year covered 

7 by the statement of the net present value of 

8 benefits and projected benefits to current par9 ticipants of the programs described in clauses 

10 (ii), (iii), and (iv) of subparagraph (A), includ11 ing the present value of projected benefits to 

12 current participants, less the present value of 

13 projected contributions and earmarked taxes 

14 paid by, or on behalf of, current participants 

15 less the current trust fund balances. 

16 ‘‘(D) FISCAL IMBALANCE CALCULATION.— 

17 The financial statement shall include a pro18 gram-by-program calculation under policies in 

19 effect during the fiscal year covered by the 

20 statement of the net present value of benefits 

21 and projected benefits to current and future 

22 participants of the programs described in 

23 clauses (ii), (iii), and (iv) of subparagraph (A), 

24 including the present value of projected benefits 

25 to current and future participants over the inVerDate Aug 31 2005 22:31 Apr 13, 2006 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5129.IH H5129

wwhite on PROD1PC65 with BILLS
6 

•HR 5129 IH 

1 definite horizon, less the present value of pro2 jected contributions and earmarked taxes paid 

3 by, or on behalf of, current and future partici4 pants over the indefinite horizon, less the cur5 rent trust fund balances. 

6 ‘‘(E) PRESENTATION OF PUBLIC DEBT.— 

7 The financial statement shall include the total 

8 amount of outstanding public debt (included in 

9 the statement pursuant to subparagraph 

10 (A)(i)), plus the total amount of fiscal imbal11 ance calculations (included in the statement 

12 pursuant to subparagraph (D)), set forth sepa13 rately by amount of debt per person, per 

14 fulltime worker, and per household. 

15 ‘‘(F) METHODS USED.—The financial 

16 statement shall include the assumptions and de17 tails of the methods used in making the calcula18 tions required under subparagraph (A). It shall 

19 separately identify and provide a detailed de20 scription of the methods and assumptions used 

21 in making projections of tax revenues, pre22 miums, other receipts from all sources, includ23 ing inter-fund transfers and interest income on 

24 securities held in trust funds, benefit outlays 

25 distinguished by the type of benefit, and adminVerDate Aug 31 2005 22:31 Apr 13, 2006 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5129.IH H5129

wwhite on PROD1PC65 with BILLS
7 

•HR 5129 IH 

1 istrative expenses. The financial statement shall 

2 also provide details regarding demographic as3 sumptions (such as fertility, mortality, immigra4 tion, and labor-force participation rates), de5 pendency ratios, and economic assumptions 

6 (such as trust fund interest rates, discount 

7 rates, revenue and benefit growth rates, health8 care expenditure growth rates, productivity 

9 growth rates, and inflation rates). The informa10 tion should include a description of all other in11 termediate steps and variables used and pro12 jected in making the calculations.’’. 

13 (b) EFFECTIVE DATE.—The information required 

14 under paragraph (3) of section 331(e) of title 31, United 

15 States Code, as added by subsection (a), shall be included 

16 in the first financial statement required under that section 

17 after the date of the enactment of this Act. 

Æ 


wwhite on PROD1PC65 with BILLS