Posted on 09/18/2003 3:45:51 PM PDT by CMClay
GAO Warns of Dangerous Deficit
NewsMax.com WiresWASHINGTON -- The head of Congress' investigative arm warned Wednesday that the United States faces "large and growing structural deficits," which, if not soon addressed, could lead to "a dangerous budgetary and economic spiral that would ultimately hurt every American."
Thursday, Sept 18, 2003
"Our nation has a major long-term fiscal challenge that is not going away, and requires serious and sustained attention," David Walker, U.S. comptroller general and head of the General Accounting Office, said Wednesday at a luncheon at Washington's National Press Club.
This challenge -- more than $7 trillion in accumulated deficit -- is one the United States "cannot simply grow (its) way out of."
"Tough choices will have to be made," he later added.
The first part of the problem, Walker said, lies with the federal government's measuring standards, which he says lead to "an incomplete and misleading picture of the federal government's current financial condition and future fiscal outlook."
Current U.S. government liability figures exclude significant commitments that, while perhaps not technically liabilities from an accounting perspective, are worth tens of trillions of dollars, Walker said. Government securities characterized as "trust funds" -- such those for Medicare and Social Security -- and healthcare discounts for veterans offered by the Department of Veterans Affairs are two such liabilities. Meanwhile, he said, the government's accounting also do not include assets that can be expensive to dispose of, such as nuclear-related defense assets.
"Importantly, while we are starting off in a financial hole, we really don't have a good idea how deep it is," he said.
At more than $24,000 for every man, woman and child in the United States, Walker points out, these "large and growing structural deficits (are) due primarily to known demographic trends and rising healthcare costs.
'Less Than 10 Years'
"In less than 10 years, due primarily to the retirement of my generation, the baby boom generation, the United States will be hit by a demographic tidal wave that is never expected to recede," Walker said. "This is unprecedented in the history of our nation."
The first part of the solution, Walker argues, is not making the problem worse. "The time has come for a fiscal Hippocratic oath: Do no harm."
After that, he said, budgetary projections need to be conducted over longer time spans than the current 10-year outlook to more accurately assess the potential costs of each program; federal departments and agencies need to be better monitored to make sure they are "making a difference for the American people and are they meeting the needs of society"; and the United States needs to develop a set of key national indicators to assess the country's position and progress.
Most importantly, Walker said, policymakers need to conduct baseline reviews of the country's tax policies and major discretionary and mandatory spending programs -- spending that is allocated in an annual budget and long-term spending obligations.
"Contrary to the assertions of some, the base of government spending, policies, programs and operations is not okay. As a result, the federal government needs to look beyond incrementalism and start making some tough choices in setting priorities and linking resources to results."
Walker also calls for a major public-education campaign as the basis of these changes, since members of Congress cannot make such politically unpopular moves as cutting programs such as Medicare and Social Security without public understanding and support.
"Unless and until (the public campaign) happens, then I don't believe it's likely that we're going to make the kind of progress that we need to make within the time frames that we should make it," Walker told United Press International Friday.
These steps need to be undertaken soon, Walker told the audience Wednesday, because early action -- and the miracles of compounding interest -- "will also help us to avoid the potential for a dangerous budgetary and economic spiral that would ultimately hurt every American."
Won't make much difference.
Time to cut all government salaries 15%.
You might be on to something here.
Time to bring home our troops.
Nope, don't think so. Selfishness & cowardice aren't good tactics against global terrorism.
You might want to mention cutting governmental entitlement programs if you want to make some real fiscal progress.
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