Gov't: Accounting method changes deficit

The federal budget deficit for fiscal 2007 would actually have been 69% higher than the White House projected in October if the government had used the same accrual accounting methods used by U.S. corporations, according to a Bush administration financial report issued today. The deficit estimate of $162.8 billion was calculated using cash accounting methods, while the accrual method that corporations use would put the federal government’s net operating costs at $275.5 billion as of Sept. 30. The Government Accountability Office declined to comment on the reliability of the new report due to its “serious material weaknesses,” according to a GAO news release. “If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company’s management and directors needed a major shake-up,” David M. Walker, comptroller general of the United States and head of the GAO, said in the release.