WASHINGTON –Sens. Mark R. Warner (D-VA) and Todd Young (R-IN) Tuesday introduced the Fiscal Contingency Preparedness Act, bipartisan legislation to require the Department of Treasury to conduct annual “stress tests” on the federal government’s finances.
Representatives Ben Cline (R-VA) and Jared Golden (D-ME) introduced companion legislation in the House last week.
This legislation would require Treasury to examine the U.S. government’s financial ability to respond to potentially catastrophic events – like an economic recession or a significant natural disaster – and put forth a report on the short- and long-term fiscal risks and impacts associated with such a response, Warner’s office stated in a release.
“The past decade has taught us the importance of bracing for the unexpected – whether that be a world-wide pandemic, a devastating weather event, or a cyberattack on major infrastructure,” said Warner. “This legislation will allow the government to take a hard look at our nation’s financial resilience in the face of various crises, disasters, and other extraordinary events, and provide Congress with critical context needed to make important financial and policy decisions.”
“The United States has faced several threats to the stability of our economy and financial systems in recent years, including the 9-11 attacks, the 2008 financial crisis, and the COVID-19 pandemic. Our bill will require yearly reviews of America’s fiscal strength to ensure policymakers can properly respond to future emergencies and make informed policy decisions,” said Young.
Specifically, the Fiscal Contingency Preparedness Act would require that the Secretary of the Treasury work with the Director of the Office of Management and Budget (OMB) to complete these annual assessments, which would be subject to audit by the Government Accountability Office (GAO). This bill would assess distinct shocks to the fiscal health of the economy, including events like an economic recession or depression, a domestic energy crisis, a natural disaster, a health crisis (such as a global pandemic), a significant armed conflict or event, a significant cyber attack, or a financial crisis.
A copy of the bill text can be found here.