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Archive for Monday, September 25, 2006

America has four deficits

September 25, 2006

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— David Walker wants you to be afraid - very afraid. But it's not for the reasons you might think.

At a time when the White House keeps warning about dreaded foreign terrorists, Walker urges Americans to shudder at our fiscally perilous bottom line.

Medicare and Medicaid, the national health-care programs, now gobble up 19 percent of the federal budget, the U.S. comptroller general points out.

In 1965, Congress had discretion over how to spend 66 percent of the budget. But in 2005, that percentage had dropped to 39 because of ongoing commitments to existing programs.

A drop in the deficit from $413 billion to $318 billion for fiscal year 2005 was touted as reason for optimism, though by other calculations (which arguably are more realistic), things look much worse.

The country's projected long-term liabilities and unfunded obligations soared from an unthinkable $20 trillion to an unimaginable $46 trillion in five years. That makes each household responsible for $411,000 - each person $156,000.

"People talk about the death tax. What about the birth burden?" Walker asked an audience Friday at the National Conference of Editorial Writers convention in Pittsburgh.

It was not exactly a rhetorical question. "This path is unsustainable," Walker said.

He has been saying much the same thing across the country for more than a year, taking a refreshingly unvarnished - if frightening - economic message straight to the public. The "Fiscal Wake-up Tour" of which he is part played Minnesota, Florida and Oregon last year. Stops in 2006 included Omaha, Kansas City, Wilmington, Del., Philadelphia, San Diego and Atlanta.

Walker is no politically motivated Chicken Little working the election cycle. He heads the Government Accountability Office, which researches a vast array of federal operations to apprise Congress of how taxpayer dollars are being spent.

Midway into his 15-year term, Walker sees imprudent choices, misleadingly rosy pictures and irresponsible leadership creating a false sense of security that jeopardizes our financial health and the prosperity of our posterity.

"It's getting worse every second of every minute of every day," he said.

The gravity of his warnings is underscored by agreement from Stuart Butler of the conservative-leaning Heritage Foundation and Isabel Sawhill of the liberal-leaning Brookings Institution, his wake-up tour compatriots.

Actually, many Americans already have awakened to these realities. They've raged about the federal deficit. They've groused about the burden that we're foisting on our grandchildren and their children. They've said that tax cuts are nice - but at what price? They've said that we can't afford a prescription drug plan that's even more expensive than it is confusing.

But members of Congress and the president have been too busy posturing for political gain to listen and act accordingly.

"We have a representative democracy today that is not representative of the American public," Walker said.Walker advocates serious re-evaluation of what the federal government does, and how, if we're to avoid drastic tax increases and program reductions.

Strengthen budget controls, he says, and bring back spending caps. Put more restraints on those earmarked expenditures that legislators slip into spending bills, and consider giving the president some power to scratch line items from those measures.

Start asking fundamental questions about the nation's transportation systems, tax incentives, energy policies, disability services, medical care standards, homeland security funding, defense capabilities, job training, housing supports and other programs.

This isn't a sneak attack by big-government loathers who want to starve it until it withers away. It's a frank and welcome call for self-examination in our collective self-interest.

"This is not about numbers," Walker said. "It's about values, and it's about people."

He put it even more bluntly back in July, speaking to the Sons of the American Revolution in Dallas.

"Today, America has at least four serious deficits," he warned (www.gao.gov/ cghome/d06990cg.pdf).

"The first is our budget deficit. The second is our savings deficit. The third is our balance-of-payments deficit. And the last, and possibly most serious one, is our nation's leadership deficit. The truth is, our nation's leadership gap is a serious and nonpartisan challenge that requires a bipartisan and cross-sectoral solution."

Those in the sensible center must demand that their elected representatives fill that leadership gap, thoughtfully, creatively and effectively. Otherwise, Americans will wake up one day amid financial rubble and wail, "Why didn't anyone see this menace coming?"

- Linda P. Campbell is a columnist and editorial writer for the Fort Worth Star-Telegram.

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