CPAs: Fixing deficit should be government’s top economic priority

BY KEN TYSIAC

CPAs have serious concerns about the U.S. federal budget deficit.

Fifty-four percent of the more than 1,700 AICPA members surveyed Dec. 4 through Dec. 24 said deficit reduction should be the top economic priority for the U.S. government.

Lagging far behind fixing the deficit were other priorities: Creating jobs (23%), tax reform (18%), and ensuring the long-term stability of Social Security and Medicare (5%).

“CPAs in communities large and small and from coast to coast are increasingly troubled by the government’s inability to come to grips with this economic calamity-in-the-making,” AICPA President and CEO Barry Melancon, CPA, CGMA, said in a news release.

Last week, the government passed legislation that helped the U.S. avoid the “fiscal cliff.”

Congress and President Barack Obama now are preparing for what’s expected to be an intense debate over the debt ceiling and spending cuts that would be designed to reduce the deficit.

Melancon said 76% of AICPA survey respondents are sending a clear message to federal policymakers to deal with the debt crisis without delay.

“Fiscal responsibility is essential to our country’s economic sustainability,” Melancon said.

Hiring freezes (55%), reduced capital spending (53%), reduced benefits (52%), and layoffs (52%) were identified by CPAs as the most likely consequences for their clients or company if the government fails to reduce the federal budget deficit.

The gravest effects of failure to fix the budget deficit would be felt by individuals, CPAs said. Almost three-fourths of respondents (73%) said individuals and families would be affected most severely if policymakers cannot reduce the deficit.

Solving the federal deficit problem has been an area of significant focus for the AICPA. In November, the AICPA board of directors passed a resolution describing the need to put the United States on a better economic path and supporting the nonpartisan Campaign to Fix the Debt and Comeback America Initiative.

Earlier last year, the AICPA developed a video, “What’s at Stake,” to inform the public of the danger the federal deficit poses to the financial sustainability of the United States.

“We call on everyone to join together in a public dialogue to make this a national priority,” 2011–12 AICPA Chairman Greg Anton said in the video.

The focus on that effort continues as political leaders gear up for talks about spending cuts.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

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