After hearing the “Fiscal Wake-Up Tour’s” message yesterday, Jack Hill said that the country’s fiscal crisis is “worse than I thought.”

Hill, an accountant with the state, says he’s been following federal spending issues for 15 years. The message Hill received is exactly the message the “Fiscal Wake Up Tour” wanted to send.

The tour, led by the U.S. Comptroller General and a collection of representatives from left to right-leaning think tanks, arrived in Nashville Monday. U.S. Rep. Jim Cooper (D-Nashville) joined them to host a morning discussion about the nation’s looming fiscal crisis.

“It’s not happy news, but it’s news we need to hear because I think it’s a pretty good approximation of the truth,” Cooper said.

David Walker, the comptroller general and head of the Government Accountability Office, said the federal government’s fiscal crisis is not in the short term but in the long term.

“It’s getting worse every second, every minute, every day,” Walker said.

The panel members represented institutions from different political perspectives, and therefore proposed different solutions on issues like taxes and entitlement reform to try and get the federal government out of ‘the red.’

One member came from the liberal Brookings Institution, one from the conservative Heritage Foundation and one from the moderate Concord Coalition.

But Robert L. Bixby of the Concord Coalition said the entire “Fiscal Wake Up Tour” agrees that the current fiscal posture of the federal government is “unsustainable,” there are no “free lunch solutions” to rectifying the situation and bipartisan political cooperation and public understanding is vital.

“This is really a moral issue,” Bixby said. “It’s about what kind of life do we want (future generations) to have.”

Observers of the federal budget received relatively good news last week when the Bush administration announced the government would have a $205 billion deficit this fiscal year, down from $248 billion last year.

That’s the good news, but the long term reveals larger problems, tour members said. Those problems included the following:


• During fiscal year 2006, the federal budget spent $227 billion on interest payments on the federal debt, which is more than it spent in both Iraq and Afghanistan;


• While the federal deficit was at $248 billion in fiscal year 2006, that does not include the billions borrowed from excess social security dollars.

Without those funds, the deficit would have been about $430 billion;


• Since 1966, federal spending on Medicare and Medicaid has risen from 1 percent of the federal budget to 19 percent in 2006. During that same time period, defense spending has gone from 43 percent to 20 percent.

To fix the problem, panel members said social security reform must be addressed, but perhaps first and foremost the United States’ health care costs were overwhelming — particularly Medicare — and needed to be reined in.

“The problem in my view is that the entire health care system is broken,” said Isabel Sawhill, a senior fellow at the Brookings Institution.

Walker proposed reforming the health care system through “universal access to basic and essential coverage,” a national health care budget and greater personal responsibility among individuals for their own health.

Besides health care, the “Fiscal Wake Up Tour” also pushed tax reform.

Taxes have been at the forefront of the budget deficit debate as supplysiders have praised President Bush’s tax cuts for ultimately raising government revenues but critics have said they’ve caused the deficit hole to deepen.

The Brookings Institution’s Sawhill said the federal tax system needs to be reformed since it’s “too complicated” and has loopholes and deductions that make it “unfair.”

“There has been a great deal of discussion about the fact that if you reduce income tax rates, that will lead to more economic growth and that will lead to additional revenues,” Sawhill said. “But that argument misses the fact that the tax system is very, very inefficient in the way it’s structured.”

Stuart Butler of the Heritage Foundation said tax increases by themselves are not the way to cover federal government spending, particularly on health care.

Butler said raising taxes to keep up with entitlements would cause a person born today in the 10 percent tax bracket to pay 26 percent by middle age. The top tax bracket, 35 percent, would pay 90 percent under the same circumstances.

“If we raise more revenue and send it to Washington, do you think that Washington is going to use that to cut the deficit or do you think it’s going to use it to increase the spending?” Butler asked. “If you think they’re going to use it to cut the deficit, you’re probably the kind of person who thinks professional wrestling is real.”

Nashville was the 22nd city visited on the “Fiscal Wake Up Tour.” CP