TOPICS
TOPICS
GAO chief reprises warning of unsustainable deficits
Humming the same tune he's been singing in a tour of the nation, Government Accountability Office chief David Walker warned senators Tuesday that the federal budget is spiraling out of control and that little time remains to steer it to safer ground. Driven by a combination of soaring healthcare costs and the demographic swell of baby boomers on the cusp of retirement, Walker told the Senate Budget Committee that "the federal budget is on an imprudent and unsustainable path" and that "the passage of time only serves to worsen this situation."
Congress and the next president, he said, have about five years to get a firm grip on the problem or burden taxpayers with huge tax hikes and beneficiaries of federal programs with steep cuts in aid. As of the start of this year, Walker said, the nation's debt was $9 trillion -- up from $5.8 trillion in 2001.
But the structural debt at the current rate of growth and spending in federal entitlements is $53 trillion, assuming that "future promised and funded Social Security and Medicare benefits, veterans health care, and a range of other commitments and contingencies" are fulfilled. He said: "One way to think about it is this: Imagine we decided to put aside and invest today enough to cover these promises tomorrow. It would take approximately $455,000 per American household -- or $175,000 for every man, woman and child in the United States."
Although the cost of the wars in Iraq and Afghanistan, along with tax cuts that have cut into revenues, are contributing to the rise of indebtedness, Walker acknowledged, the chief culprit is healthcare spending for the poor, elderly and veterans. "If there is one thing that could bankrupt America," Walker said, "it's rising healthcare costs. We can't afford to keep writing a blank check for health care." Year after year for the past 40 years, he went on, the cost of health care has outstripped inflation by 2 percentage points a year.
Walker praised Senate Budget Chairman Kent Conrad, D-N.D., and ranking member Judd Gregg, R-N.H., for their proposal to create a bipartisan task force on entitlements, composed of congressional and administration members, to come up with a plan to address the matter.
"I intend to bring this to a markup this year," Conrad said. "We have got to do something, or this will bedevil the next administration unless we face up to it."
Calling the runaway growth in healthcare spending the equivalent of a "fiscal meltdown," Gregg said the task force would provide a "fair and open and bipartisan procedure, its recommendations would require an up-or-down vote on the floor, and all entitlements and taxes would be on the table.... We need to pass on to our children a viable nation that they can afford." Walker also warned the committee that the creditor nations in Asia and Europe that are financing the United States' debt, may not be so eager to do so as the debt mounts. At the least, he said, they will start charging higher interest rates that will make it more difficult to achieve robust economic growth and compete in world markets.
COMMENTS
- “Although the cost of the wars in Iraq and Afghanistan, along with tax cuts that have cut into revenues, are contributing to the rise of indebtedness, … the chief culprit is healthcare spending for the poor, elderly and veterans.” I would beg to differ. Even as we approach that critical baby-boomer hump in Social Security entitlements, such an increase was not seen over the past 6 years. The time period and the MASSIVE increase of national indebtedness is directly attributable to this Administration’s failed fiscal policies. As for the rising costs of social security entitlements and healthcare, as with any other insurance program, the total cost of the programs needs to be assessed across the entire population entitled to receive them; whether they wish to opt out or not. By making the middle and lower income pay a larger percentage of their limited income into the pool, and the well-off pay a smaller percentage, the system presents an unfair burden on already limited budgets. In accordance with the current fiscal policy and economic stimulus package, the higher income population, like the nation as a whole, directly benefit from the spending habits of the middle to lower income brackets. Why, therefore, should they not contribute proportionally to ensure that tax and spending base stays healthy? Even a thoroughly analyzed, calculated flat tax could cover those costs. Just do it. Tip off Posted February 6, 2008 12:25 PM
- The GAO Chief's warning concerning the cost of healthcare is only one of many that have been given to our elected leaders over past decades. No politician seems to be willing to talk in public about the actions that must eventually be taken to address the disgraceful state of healthcare in our country for fear of offending powerful special interests groups (Medical, Insurance, Pharmacutical). We spend far more on healthcare than any other developed country (per capita and as a percentage of GDP)and yet have 47 million citizens without health insurance and the leading cause of bankrupcy in the US is health related expenses. Healthcare should be a service guranteed to every US citizen not a highly profitable industry. Until we establish a single payer healthcare system that is focused on prevention, taking the profit out of illness and eliminating the costs associated with maximizing drug usage, health insurance, billing and maximizing rembursements, we will continue to see our national debt baloon while the health of citizens of this country does not improve. G. DUVALL Posted January 30, 2008 11:54 AM
- Whatever the cause, it is a fact that the debt is $9,000,000,000,000.00 and that is double what it was a few years ago. And telling folks to go ahead and die because we ain't paying is pretty harsh. It is easy to spout an idealogical simplification or shrug "Oh, well," but that does not correct the problem. So far, our collective decision has been to ignore it. How many zeros on the back of the number before ignoring the problem brings a catastrophe? The fact is politicians from the executive recommend and from the legislative vote huge deficits every year. They lament and veto what they don't like, approve what they do like and always, always end up with more than we actually have. And the rate of this excess is redoubling. However much tax revenue the "economic growth" fueled by this process creates, it is also creating an accelerating debt. The GSA and Congress are no better -- they've correctly identified a problem but have no clue what to do about it. I hear unproductive ideological rambling, I hear fatalistic dismissal, and I hear a lot of Eeyore-like groaning -- but I hear only partial solution proposals combined with lots of fussing as to why they won't work. How about this: balance the budget every year, all the time. No ideology, no excuses, no spending what you don't have, and no killing people by being stingy -- if you need the taxes, collect the taxes. Discipline. I don't believe any other method will work, and if you think you have a clever, convoluted scheme that will, you'd better have proof because liberal, conservative, libertarian, communist, left, socialist, or right ideology doesn't mean squat if you can't zero out that debt! Richard Wright Posted January 30, 2008 11:30 AM
