Leadership Quote by Jim Costa

Jim Costa points to a gap between the deficit we talk about and the deficit we actually have when measured with rigorous accounting. The annual budget typically relies on cash accounting and political assumptions that smooth over costs, pushing them into the future or classifying them off budget. The government’s comprehensive financial report, by contrast, uses accrual concepts that recognize obligations when they are incurred, not just when cash leaves the Treasury. Once you include long-term commitments like veterans benefits, federal pensions, and the rising costs of Medicare and Social Security, the picture grows darker. What looks like a manageable shortfall under the budget’s rules becomes a larger structural deficit under honest, comprehensive accounting.

Costa, a centrist Democrat with a record of fiscal hawkishness, is calling out bipartisan habits that make deficits appear smaller. Timing shifts, rosy economic baselines, temporary pay-fors that expire, and emergency supplementals for wars or disasters can all reduce the headline number without lowering the underlying gap between what government promises and what it sustainably funds. The unified budget may even benefit from trust fund flows that mask true costs, while the government’s financial report exposes the net operating cost and long-term fiscal gap.

The point is not simply technical. Understating the deficit encourages policy complacency. Lawmakers can avoid trade-offs today while the burden compounds as interest costs rise and demographics strain entitlements. Honest budgeting would mean aligning with accrual principles, fully funding recurring programs, scoring realistic policy extensions, and publishing long-horizon projections alongside the annual budget. It would also mean accepting near-term political pain in exchange for long-term stability.

Costa’s warning is ultimately about transparency. If voters and legislators see the larger, more accurate deficit, priorities can be set with clear eyes. Only then can debates over taxes, spending, and entitlement reform move beyond accounting maneuvers to the hard choices a sustainable fiscal path requires.