Living for today, not building for tomorrow.
Just as Congress was racing to kick $150 billion in fiscal stimulus money out the door last month-pushing the projected 2008 deficit to a record $410 billion-President Bush unveiled a $3.1 trillion budget, saying that thanks to "spending discipline in Washington, we are on a path to balance the budget by 2012."
Bush's claim strained credulity, for his tax and spending programs stand little chance of surviving the scrutiny of Congress. More important, they do not seriously address the fiscal calamity just over this budget's horizon.
The scope of the problem was succinctly described by Robert J. Samuelson of Newsweek, who wrote in January: "Our children face a future of rising taxes, squeezed-and perhaps falling-public services and aging-perhaps deteriorating-public infrastructure (roads, sewers, transit systems). Today's young workers and children are about to be engulfed by a massive income transfer from young to old that will perversely make it harder for them to afford their own children."
We are in this pickle thanks to the coming surge in federal spending on Medicare, Medicaid and Social Security as baby boomers retire. By 2040, not so far away, these programs, plus other government expenses, could cost twice as much as will be collected under current levels of taxation.
Put another way, revenues now amount to about 18 percent of gross domestic product; enough, going forward, to defray less than half of what government would be spending 30 years from now if the big entitlement programs are not reined in. Comptroller General David M. Walker puts the "fiscal exposures" the nation faces at $53 trillion over the long term, with more than half attributed to Medicare. New tax revenues, or spending cuts, will be needed to cover much of these liabilities-now growing by roughly $2 trillion a year.
The new budget illustrates the bind many agencies will be in as these trends accelerate. To achieve the illusion of balance in 2013, Bush assumes that spending by nine major federal agencies will decline by 5 percent to 27 percent. The biggest and doubtless most unrealistic cut is the one forecast for the Defense Department, which would receive $549 billion in 2013, $102 billion less than the $651 billion requested for 2009. Despite the country's infrastructure crisis, the Transportation Department's budget would shrink from $71 billion next year to $51 billion in 2013. The Commerce Department would lose more than a quarter of its budget. Subtract another 10 percent to 15 percent to account for inflation, and the nine agencies (others, too) would lose a lot of purchasing power.
Viewing the alarming fiscal trends as a threat to our prosperity and security, Walker has been working to raise their visibility. A "fiscal wake-up tour" has taken him and his "fiscal truth squad" of like-minded nonprofit leaders on a 33-city barnstorming tour during the past 30 months.
Last year, Walker and his message were featured on CBS News' 60 Minutes and on The Colbert Report. Now, he's starring in I.O.U.S.A., one of the few documentaries that was chosen to preview at the Sundance Film Festival in January ("a stat-studded geekfest," said Variety, bible of the film industry, in a favorable review).
Presidential candidates have paid little attention so far. They have been promising more, not less. But Walker remains hopeful that the general election campaigns will address the issue, he said during a Government Executive Leadership Breakfast in January.
He has proposed an independent commission to tackle the crisis. It would include a few congressional leaders and (more credible) outside experts to recommend tax and spending policies that Congress would then be forced to vote up or down without amendment.
Intervention of this kind is needed to overcome our political leaders' intractable case of myopic self-preservation. Pressure to act, absent inside government, must come from the outside. On Feb. 15, Walker announced that he himself would step outside to become president of the new Peter G. Peterson Foundation, which intends to spend some $1 billion over the next several years to educate the nation about what Walker described as "the fiscal, entitlement, health care, energy, education and other major sustainability challenges facing the United States."