Fiscal Contingency Preparedness Act
Summary
The Fiscal Contingency Preparedness Act requires the Secretary of the Treasury, in coordination with the Director of the Office of Management and Budget, to examine the Federal Government's ability to respond to potential fiscal shocks. This includes assessing the fiscal risks and impacts of responding to events like economic recessions, energy crises, natural disasters, health crises, armed conflicts, cyber attacks, and financial crises. The Act mandates an annual report to Congress and a review by the Government Accountability Office (GAO).
Expected Effects
The Act will likely lead to a more structured and informed approach to preparing for and responding to fiscal shocks. It will require the Treasury and OMB to develop methodologies for assessing risks and impacts. The GAO review will provide an independent assessment of these methodologies and results.
Potential Benefits
- Improved preparedness for various fiscal shocks.
- Enhanced understanding of potential economic impacts.
- More informed decision-making during crises.
- Increased transparency through public reporting.
- Independent oversight by the GAO.
Potential Disadvantages
- Potential for increased administrative burden on the Treasury and OMB.
- Risk of politicization of the risk assessment process.
- Possible delays in responding to crises due to reporting requirements.
- The act itself does not allocate any funding to address the identified risks, it only studies them.
- The effectiveness of the act depends on the quality and objectivity of the analysis conducted by the Treasury and OMB.
Constitutional Alignment
The Act aligns with the Constitution's broad mandate to "provide for the common defence" and "promote the general Welfare." While the Constitution does not explicitly address fiscal shock preparedness, it implies the government's responsibility to ensure economic stability and security. Article I, Section 8 grants Congress the power to lay and collect taxes, borrow money, and regulate commerce, which are all relevant to managing fiscal risks.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).