AGA Today
Reporter's Notebook: Stirring Deficit Fears
By DEBORAH SOLOMON
May 3, 2006
WILMINGTON, Del. -- In a shiny, new
conference hall on this city's fledgling riverfront, a group of mostly
elderly residents have gathered to hear some ominous news about the
nation's fiscal situation.
Delaware Sen. Tom Carper, a Democrat, is
explaining the "theory of holes" to the group. "When you find yourself
in a hole, stop digging," Sen. Carper says, adding that the federal
government has worked its way into a fiscal crevasse from which it may
never surface.
His message was part of a shock-and-awe
campaign aimed at educating the public about the fiscal crisis facing
the U.S. In convention centers, town halls and community colleges across
the nation, the "fiscal wake-up tour," sponsored by Concord Coalition, a
bipartisan group of deficit phobes, is attempting to stir the citizenry
from complacency about the budgetary strains that threaten the U.S.
economy.
While the economy is currently strong,
some deficit hawks are trying to sound alarm bells on Main Street with
information about the nation's $318 billion -- and growing -- budget
deficit and, even more worrisome, spending trends in the future, issues
which aren't at the top of anyone's worry list outside Washington.
Driving home the message is David M.
Walker, the nation's comptroller general and head of the congressional
Government Accountability Office, who flips through a PowerPoint
presentation filled with startling statistics, such as the federal
government's heavy debt load and looming obligations.
"Remember $375,000," says Mr. Walker.
That's the amount he says every full-time worker in this country bears
to cover the cost of long-term liabilities and unfunded entitlement
programs, like Social Security, Medicare and Medicaid, which now exceed
$46 trillion.
With the first set of Baby Boomers set
to turn 65 in just five years -- and begin collecting benefits -- those
obligations are on pace to swamp the budget, leaving little or no money
to pay for discretionary programs, such as defense and public education,
he says.
Still, even as the U.S. racks up a
deficit, federal spending has not slowed. To pay for the deficit
spending, the government has borrowed money and is paying billions of
dollars in interest on those loans. In fiscal 2005, the year ended Sept.
30, interest on the government's $4.6 trillion debt cost $184 billion --
more than the U.S. spent on education -- and is "the fastest growing"
expense, says Robert Bixby, executive director of the Concord Coalition.
The spending, mounting debt load and
coming expenses are going to result in a "day of reckoning," says Isabel
Sawhill of the Brookings Institution, adding it could "possibly trigger
a financial crisis."
One audience member stands to ask, "What
can we do?" The answers vary from writing congressmen to telling friends
and neighbors about the looming fiscal mess.
But the main efforts, the panelists
agreed, will have to come from Washington.
"We have a leadership deficit," says Mr.
Walker, whose term as head of the Government Accountability Office runs
for 15 years, which insulates him from political backlash.
While the panelists didn't all agree on
the proper remedies, their suggestions include rescinding recent tax
cuts, requiring that revenue sources be identified before any new
spending is approved and possibly raising taxes on things such as
energy.
But can any of this actually get done in
partisan Washington, one audience member asks.
Mr. Walker tells the group that it's
worth remembering "the first three words in the U.S. Constitution: We
the people." Those who are unhappy with the way things are going in
Washington, he says, should remember that when deciding who "to elect or
not re-elect."
The presentation finishes with a photo
of a smiling baby girl, who happens to be a panelist's granddaughter.
"She didn't cause this," says Joseph J. Minarik, senior vice president
of the Committee for Economic Development and a former Clinton
administration budget official. But unless the fiscal situation is
reformed, he says, she's the one who's going to bear the costs.