S. 2492: Fiscal Contingency Preparedness Act

This bill, known as the Fiscal Contingency Preparedness Act, aims to ensure that the federal government is prepared to respond to potential fiscal shocks, which are significant financial disruptions that can have broad impacts on the economy and public services. Here is a breakdown of what the bill entails:

Annual Reporting Requirements

The bill mandates an amendment to existing law, which requires the Secretary of the Treasury, in collaboration with the Director of the Office of Management and Budget (OMB), to conduct an examination of the federal government's ability to handle various types of fiscal shocks. This examination includes:

• Assessment of Fiscal Risks: Evaluating the potential fiscal risks and impacts related to responses to fiscal shocks.
• Identification of Events: Identifying specific events that could cause such shocks, including:
• Economic recession or depression
• Domestic energy crisis
• Catastrophic natural disaster
• Health crisis, such as a global pandemic
• Significant armed conflict or event
• Cyber attacks with substantial impact
• Financial crises
• Short-term and Long-term Effects: Determining the projected short-term and long-term fiscal effects on the federal government for each identified event.
• Economic Indicators: Describing significant economic impacts and indicators that help illustrate the fiscal effects of these events.
• Historical Context: Considering historical instances of similar events and how the federal government responded to those events to inform the current examination.

Timing of Report

The examination outlined in the bill must be included in the annual report required by existing laws and is to be structured in a way that best meets the objectives of the examination.

Review Process

Additionally, within one year after the first examination is published, the Comptroller General of the United States is required to:

• Review the methodology and results of the fiscal analysis from the examination.
• Publish a report on the findings of this review on the Government Accountability Office's website.
• Submit this report to the Senate and House Budget Committees for their consideration.

Effective Date

The bill specifies that its provisions will take effect on the later of two scenarios:

• The first date following the enactment of the Act on which the Secretary of the Treasury submits the required report.
• 180 days after the date of enactment of the Act.

Summary

In summary, the Fiscal Contingency Preparedness Act seeks to develop a systematic approach for assessing the government's readiness to respond to significant fiscal disruptions. It establishes reporting and review processes aimed at enhancing understanding of potential fiscal risks and informing better policy decisions.

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