In the weeks of mud-slinging, posturing, and empty promises of the recent election campaigns, David Walker's voice sort of got drowned out in the cacophony.
He wasn't running for anything — he's got a job until 2013, so he doesn't have to kowtow to anyone to keep his position — but the message he had for anyone who'd listen was every bit as important as the blathering of the candidates.
“The country's going broke” and “heading toward calamity,” warned Walker, who as head of the Government Accountability Office (GAO) serves as U.S. Comptroller General, with responsibility for auditing the government's finances.
The picture he sees in all those figures is not pretty:
- The U.S. now has debt obligations of $45 trillion, or $150,000 for every man, woman, and child.
- If the country continues on this course, by 2040, when today's newborns are starting families, the government will face spending cuts of 60 percent or raising taxes by 250 percent.
- Last year, spending for entitlement programs (mostly for the new Medicare drug benefit) was increased by $8.1 trillion on a current dollar basis, more than the entire outstanding debt of the U.S. since the beginning of the republic.
“The biggest threat we face in this country is not terrorism, but the government's own fiscal irresponsibility,” says Walker, who has been on a “Fiscal Wakeup Tour” to spread the word that this country is living beyond its means and that “we've got to get serious soon or face very serious adverse consequences” that threaten our long-standing ability of being able to pass on to our children and grandchildren a higher standard of living.
Characterizing himself as a political independent, Walker, who has served under Presidents Reagan, Bush 1 and 2, and was nominated for his present post by a bipartisan panel in the Clinton administration, says the need for meaningful fiscal reform transcends politics.
“We have the ability to mend our ways and head down a more prudent path, but we haven't started doing it.” Leaders have displayed myopia and tunnel vision, he says, and have failed to see and understand the broader picture.
“We need to recognize our large and growing long-term problem and start doing something about it.”
While there has been much yammering by the current administration about the need to reform Social Security, Walker, who has served on Social Security reform commissions, says it's a relatively minor problem in the overall long-range fiscal imbalance.
“Of the nation's projected $45.6 trillion unfunded fiscal gap, Social Security represents only about $4 trillion.” With some changes, he says, Social Security can continue solvent into the future. Medicare, on the other hand, represents a potential $30 trillion unfunded gap and “health care out of control.”
Rising health care costs pose a fiscal challenge not just to the federal budget, but to American business and society as a whole, Walker says. “We have to recognize that ultimately we have to reform the entire health care system.”
Is anyone listening to Walker's warnings?
“People are starting to pay attention,” he says.
But the clock is ticking. And the debt is mounting…