Even if the nation pays off the national debt sometime in the next decade, other immense federal obligations will reach far into the future.
When President Clinton fantasizes about eliminating the debt by 2013, taxpayers should keep in mind that he doesn't mean all federal debt would be wiped out. In fact, talk about paying off the national debt verges on fraud.
There are trillions of dollars of federal obligations not accounted for in either the total outstanding marketable, interest-bearing public national debt or in the additional non-marketable, interest-bearing debt. Corporations would be required to disclose such contingent liabilities in their financial statements. The federal government should be held to a similar standard.
As of Jan. 31, the marketable portion of the national debt totaled $3.2 trillion. Almost all of this debt is issued in the form of Treasury securities, except for a small fraction from the Federal Financing Bank.
The non-marketable portion totals another $2.5 trillion, including such commitments as U.S. Savings Bonds.
Together, these two total $5.7 trillion.
But other obligations not contained in that total include actuarial and contingent liabilities that are just as real as the debt owed on Treasuries. These off-budget liabilities include more than $8 trillion of Social Security and another $8 trillion of Medicare.
They include more than $1.5 trillion in federal pensions, including the severely underfunded military retirement system and the civil service retirement system. They include retirement systems for the foreign service, public health service and the Central Intelligence Agency.
Goldfinger could not have devised a more lethal time bomb to jeopardize the retirement security of federal workers and fiscal health of taxpayers than these largely unfunded systems.
In all, these "hidden" obligations total some $18 trillion, according to the National Taxpayers Union of Alexandria, Va.
They are just as real as the public debt, unless the federal government reneges on its commitments.
Perhaps the biggest problem is that these are unseen debts. They are mostly out of sight and mostly out of mind. Because they are shrouded, Congress and the administration can more easily raise commitments without immediately having to shoulder the burden of either paying for them or accounting for them in the federal budget.
Corporations have to account for their contingent and actuarial liabilities in their public financial statements to aid shareholders. Without including these obligations, the federal government presents a misleading picture of its fiscal health.
