“[T]he principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.”
~ Thomas Jefferson
The INFORM Act (S.1351 / H.R. 2967)
Our country is spending much more money than it collects in taxes and, if we remain on our current path, this gap will grow even larger over the long-term. However, the true size and consequence of this financial burden, which will be inherited by young people, goes unreported in official government analyses. Our leaders need more information about how fiscal policy will impact future generations in order to make better decisions.
The INFORM Act ("Intergenerational Financial Obligations Reform Act") would require the government to disclose a larger set of financial facts, specifically by incorporating "fiscal gap" and "generational accounting" analyses in the federal budgeting and legislative process. The bill was introduced in the United States Senate on July 24, 2013 by Senators Thune (R-S.D.), Kaine (D-Va.), Portman (R-OH) and Coons (D-DE).
The INFORM Act can be a strong, bipartisan step forward toward a generationally balanced and sustainable solution to our growing fiscal imbalance. We need your help to get it passed this year.
Download an overview of the INFORM Act.
Watch to Learn More
Support Our Effort
Endorse the INFORM Act and have your friends do it too!
Contact your member of Congress by calling, emailing and/or tweeting. The bill numbers are S.1351 & H.R. 2967.
Example Tweet: ".@TheirName - please support @TheCanKicksBack's effort to reinstate Generational Accounting. www.TheCanKicksBack.org/informact #INFORMact"
- Write a letter to the editor. You can email email@example.com for any help.
- Share our video on Facebook or via email with your friends, with a link back to this webpage.
What They're Saying
Senators John Thune (R-SD) & Tim Kaine (D-VA), Sponsors of the INFORM Act:
“Young Americans in their 20s and 30s deserve to know what the decisions of today's lawmakers mean for their future. And lawmakers should use every tool at our disposal to make better decisions. We believe this approach will help us improve the fiscal health of the country.” Read their full CNN Op-ed.
“This generation of Americans is very likely to be the first generation in our history as a nation to leave a worse economy and a worse fiscal position than the one they inherited. The INFORM Act is a step in the right direction toward informing Americans of the magnitude of this problem.” See the full list of 12 Nobel Laureates who have endorsed the INFORM Act.
Kent Conrad (D-ND) & Judd Gregg (R-NH), Former Senators and Budget Committee Chairmen:
"We support the bipartisan INFORM Act because it will shed additional light on the full size and the intergenerational consequences of our nation's fiscal imbalance. By showing the significant costs of delay, we believe the INFORM Act can help increase the urgency to address our debt so that we can leave a better country to our kids and grandkids than we had handed to us." Read their full statement (.pdf).
David M. Walker, former head of the Government Accountability Office:
“[T]he real financial burdens being placed on young people and future generations are not adequately disclosed and action to fix this problem is being delayed....In order to make better decisions for tomorrow’s Americans, today’s elected leaders need to have better information—and the integrity to honestly share that information with the rest of us.” Read his full Reuters op-ed.
Frequently Asked Questions
What is Fiscal Gap?
The Fiscal Gap measures the projected difference in total future government spending and revenue, plus our current debt. Whereas the deficit and debt indicates where we are today and where we have been in the past, the Fiscal Gap indicates of where we are headed in the future. This is important to know because any solution to our growing fiscal imbalance that is fiscally sustainable must be able to close the Fiscal Gap over the long-term.
What is Generational Accounting?
Generational Accounting measures the net taxes – the difference between what is paid in taxes to the government and what is collected through transfers (i.e. Medicare and Social Security) over the course of one's lifetime – for each living generation and future generations. Generational Accounting shows the liabilities transferred between generations, assuming the fiscal gap is left to future generations to close. This is important to know because any solution to our growing fiscal imbalance that is generationally equitable must ensure net taxes across generations are equal, or as close to it as possible.
Have these analyses been done before?
In fact, it has. The Bush 41 and Clinton administrations used Generational Accounting in their analyses of the president's budget, before caving to political pressure in the mid-90's. Fiscal Gap analysis is used to this day in the Social Security Trustees Report. Both analyses have been and continue to be utilized by dozens of countries around the world and by respected institutions like the International Monetary Fund.
What does the INFORM Act actually do?
The INFORM Act would require a 75-year and infinite horizon fiscal gap and generational accounting analysis to be used in the federal budgeting and legislative process by:
- The Congressional Budget Office in (i) analyzing budget resolutions and pending legislation, at the request of the House or Senate Budget Committee chairs or ranking members, that would impact revenues or mandatory spending by more than .5% of GDP over 10 years and (ii) its annual long-term budget outlook report;
- The Government Accountability Office in its annual long-term fiscal outlook report;
- The Office of Management and Budget in its report of the president's budget;
- Draft form letter to House/Senate (.docx)
- Read an op-ed in Roll Call by TCKB's Nick Troiano and economist Laurence Kotlikoff.
- Generational Accounting - Frequently Asked Questions (.pdf)
- Example: Most recent Generational Accounting by the International Monetary Fund: “An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?” (.pdf)
- Example: Infinite horizon fiscal gap analysis in the 2013 Social Security Trustees Report (.pdf)
- Op-Ed: Why the government needs to budget over the infinite horizon
- TCKB policy blueprint: "Three Smart Steps to Solvency: Know, Show & Grow." (.pdf)
- Fiscal Times Op-Ed by Larry Kotlikoff: "Deficit Accounting Is a Generational Ponzi Scheme"
- Academic paper: Alan J. Auerbach, Jagadeesh Gokhale, and Laurence J. Kotlikoff, "Generational Accounts: A Meaningful Alternative to Deficit Accounting," in David Bradford, ed., Tax Policy and the Economy, vol. 5 (MIT Press for the NBER, 1991), pp. 55-110.