Top fiscal watchdog delivers stinging attack on deficit
Friday, January 23, 2004
By Ann McFeatters, Post-Gazette National Bureau
WASHINGTON --The U.S. comptroller general, David Walker, laid out a blistering attack on the nation's growing deficit yesterday, saying it is undermining the future of the nation and putting an all-but-intolerable tax burden on future generations.
"The path we're on is imprudent and unsustainable,'' he said.
Walker, a balding, meticulously dressed man whose background is as a certified public accountant, does not look like a rabble rouser. But that's what he has become.
In a session with reporters, Walker, who also heads the General Accounting Office, the non-partisan watchdog arm of Congress, said he has become convinced that neither the Bush administration nor members of Congress nor the public understand how serious a problem the nation's public debt and rising deficit are becoming.
Entitlement programs such as Medicare have grown out of control, he said, and the base spending of the government must be overhauled.
Some popular programs are not just growing insolvent, but are not going to be sustainable, he said. The new prescription drug coverage for seniors through Medicare will cost $8 trillion for the next 75 years, costing every man, woman and child $25,000, he said. That's in addition to $18 trillion that Medicare will cost over that period.
He also predicted that the benefits being offered in the new drug program, which takes full effect in 2006, will disappoint so many people that Congress will be pressured to make it more extensive and thus even costlier.
Although Walker said that making President Bush's tax cuts permanent, as he demanded in his State of the Union speech Tuesday, would be more expensive than anyone has publicly stated, he insisted that his comments were not intended to be political. He only sought to sound a "wake-up-call,'' he said. "All major tax proposals need to be examined carefully,'' he said.
Asked about Vice President Dick Cheney's remark -- reported by former Treasury Secretary Paul O'Neill, whom Cheney had fired -- that deficits do not matter, Walker said Cheney may believe that deficits don't matter politically, but that the vice president can't possibly believe that they don't matter for the economy.
"Deficits do matter -- especially when they are large, structural and growing,'' Walker said.
The nation now has a total debt of $7 trillion -- $4 trillion of it held by the public or foreign investors -- and is expected to have a record deficit this year of $500 billion.
If foreign investors decide that they don't want to hold U.S. debt anymore, it could be catastrophic, he said.
The Pew Research Center for the People and the Press earlier this month conducted a poll which found that half of those surveyed said the deficit should be a top national priority, up from 40 percent a year ago. Democrats in particular were concerned.
The administration of President Ronald Reagan produced significant deficits, and they didn't hurt his political career. But Walker said the mechanics that eventually reduced the deficits in the 1990s are gone now. And he said that even when surpluses were "projected" in the 1990s, there were still long-term deficits forecast.
Walker said there is "low-hanging fruit" everywhere, meaning that there are dozens of federal programs that could be cut or axed. Dozens of programs created in the 1940s and '50s have never been subject to re-evaluation or reassessment, he said. And there are "billions" of dollars in the defense budget listed as "miscellaneous,'' he said.
When Bush promises to reduce the deficit by half within five years, Walker said, the president's projections are "only as good as the assumptions that underlie them.'' In five years, should Bush be re-elected in November, he will be leaving office, Walker said. "It's absolutely critical to consider where we'll be in 10 years'' with current spending levels, he said.
On the Democratic side, he said, none of the figures cited by those seeking the party's presidential nomination add up. Even those contenders calling for repeal of Bush's tax cuts have ideas about where they want to spend the money, he said.
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