Official warns of fiscal crisis
Marcela Berrios | Monday, January 29, 2007
The United States’ budget deficit may be approaching the $50 trillion mark, but despite the enormity of the fiscal crisis, citizens can curb the country’s liabilities by assuming responsibility – and reducing their levels of cholesterol, Comptroller General David Walker told students and faculty members in the Jordan Auditorium Friday.
In the first installment of the Mendoza School of Business’ “Ten Years Hence” lecture series, Walker updated students on the condition of the country’s debt and urged them to hold their elected officials accountable for the expenditures and taxation formulas they may implement – because the burden of their decisions will fall on the shoulders of forthcoming generations.
“We don’t face a heart attack immediately but we have been diagnosed with cancer,” Walker said. “We need to start treatment today or we’ll face catastrophic results in the future.”
He called the existing fiscal policy “unacceptable and unsustainable,” and suggested discretionary expenditure controls and all-encompassing taxation regulations to prevent further insolvency.
As head of the bipartisan Government Accountability Office (GAO), Walker audited different government offices and said Social Security, health care and taxation legislature will require fundamental reorganization before the crisis is averted.
“While some would have you believe that the reason we’re running these deficits is because of the war on terrorism and incremental homeland security costs, that’s just not factually accurate,” he said.
While the country accrued more than $450 billion in arrears last year, approximately $100 billion were related to Iraq and Afghanistan, he said.
The rest of the bill belonged to health care and Social Security expenses.
“If there’s one thing that can bankrupt this country, it’s health care,” Walker said.
He said 50 million Americans are uninsured, and while legislators should aim to provide access to health care services to every citizen, eligibility requirements and the scope of the essential services available should be revisited.
“Everybody wants unlimited access to health care, as long as someone else will pay for it,” Walker said. “We’re number one in obesity and people have to get their act together and assume a greater responsibility.”
He suggested the distribution of health care costs among the federal government, the individual and the individual’s employer.
Similarly, he urged energetic individuals to work beyond the minimum retirement age of 62 to alleviate the country’s pension obligations, as well as a federal reexamination of the compensation and taxation formulas pertinent to retired citizens.
These changes, if implemented, would drastically affect the lives of Americans, but Walker said the fiscal crisis demanded drastic measures.
“Tough choices are required,” he said. “We will not be able to grow our way out of this problem.”
In response to the growing problem, Walker and the GAO launched the “Fiscal Wake-Up Tour,” a series of nationwide forums to discuss the federal government’s deficit and the challenges posed by existing fiscal trends.
They’ve already visited several universities, including Ohio State University, University of Chicago, University of Colorado, University of Missouri, University of Nebraska and Duke University, according to the GAO Web site.
Walker said it was important to awaken in young people the desire to serve their country, and he offered the students in Jordan personal advice, telling them to give two years of their lives to public service.
Whether through teaching children, serving in office or volunteering in county hospitals, Walker assigned young adults the responsibility of “making America great again.”
He also favored increasing the transparency and completeness of the President’s budget proposals and tax expenditures to return to America its glory – from an accountant’s perspective.
That would deter uninhibited credit expenditures that “ungenerously grow upon prosperity the burden that [leaders today] ought to bear,” he said.
The taxpayers, he said, have failed to carry the load.
Walker said $365 billion had been lost at the close of 2006 as result of the taxpayers’ failure to meet their obligations, excessive deductions and other tax-related violations.
The GAO’s reform proposals called for an expansion of the tax bases and a simultaneous conservation of rates that will stimulate further economic growth.
Walker also scrutinized the intersection of taxation procedures and health care.
“The single largest tax preference in the code is still health insurance,” he said in reference to the exemption of an employer’s health insurance costs on the employee’s return.
He said this practice further disconnects the taxpayer from bearing the burden of his or her own health care, returning to his argument in favor of increased individual contributions to the relief of America’s deficit.
“We will ultimately rise to the challenge,” Walker said. “We just need to do it sooner rather than later.”