Unsustainable Brew

Costly fixes for the economy and health care won't work without difficult trade-offs.

Sustainability, that six-syllable mouthful of a word, is breaking out of its corner in environmental parlance and into the big-time discourse on the nation's fiscal and economic future.

Environmentalists say the nation's dependence on oil and gas is unsustainable in the face of dwindling reserves. Fiscal policy experts say the United States also could be in danger of running out of money.

One such expert is David M. Walker, former U.S. comptroller general and now president and chief executive officer of the Peter G. Peterson Foundation, a New York-based nonprofit devoted to addressing key economic challenges. Long before government was disbursing nearly $800 billion to stimulate the economy, or contemplating hundreds of millions in new spending for health care, Walker was warning that the nation could not afford commitments already made, in particular to the elderly through Social Security and Medicare. As Walker has noted, the longer politicians wait to address the problem, the more drastic the remedies will be-higher taxes, larger cuts in benefits and other programs, not to mention more debt, more interest payments, more likelihood of damaging inflation.

Walker has been a regular presenter at events Government Executive has sponsored because his message seems directly relevant to the work federal officials are charged with doing. It has long seemed probable that rising deficits would force Congress to cut the programs these officials manage. And indeed, a portent of tougher times came when the Office of Management and Budget directed most agencies to submit two budgets for 2011, one assuming no increase in spending and the other a 5 percent reduction.

Last fall, the sustainability message began to gain traction. Deficits and debt never were much of a subject for the media-too abstract, too long-term-but all of a sudden those issues are finding their way onto the front page.

The New York Times on Nov. 23, 2009, led the day's news with a story headlined "Federal Government Faces Balloon in Debt Payments: At $700 Billion a Year, Cost Will Top Budgets for 2 Wars, Education and Energy." The story noted the record $1.4 trillion deficit in fiscal 2009, and the prospect of much more debt, climbing interest rates and financing costs in the years to come.

Walker has long advocated a special commission or process designed to give Congress more backbone in making the hard choices to right the ship. This idea also has gained support in Congress, with Senate Budget Committee Chairman Kent Conrad, D-N.D., and ranking Republican Judd Gregg, R-N.H., backing such a panel, and the White House in talks about how it might work.

The Peterson Foundation and the Chicago-based John D. and Catherine T. MacArthur Foundation, which focuses on improving public policy, have put a lot of money toward raising the visibility of the debt/deficit issue. In the next few weeks, a joint panel of the National Academy of Public Administration and the National Academy of Sciences will unveil a MacArthur-funded study of the federal budget morass. MacArthur has committed funds to NAPA to create a Web site to engage citizens in discussions about how to solve the problem.

The deficit concerns among members of Congress and the public coincided with the climax of this year's debate about recasting the nation's health care system. Bills emerging from the House and Senate entailed huge spending increases, as well as promises to cover future costs. But if legislation is passed by narrow partisan majorities, the new health care scheme could prove financially fragile. As in the past, Congress might well decide to retain new benefits while deferring offsetting spending reductions or tax increases. Such an outcome would hasten the nation's spiral into insurmountable debt.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
JOIN THE DISCUSSION
Close [ x ] More from GovExec
X CLOSE Don't show again

Like us on Facebook