This week on Facing the Future, former Comptroller General of the United States and CEO of the Government Accountability Office (GAO) David Walker discussed his efforts to sound the alarm on the dangers of rising debt and unsustainable government commitments.
“First, I think it’s important for people to understand that the Congress only has one express and enumerated annual responsibility under the Constitution of the United States, and that is to pass all the appropriations bills by the beginning of the fiscal year,” Walker said. “The last time they did it was 1996. They’ve only done it four times since 1950. I call that an F-.”
Summing up the overall federal budget dynamic Walker said, “We’re spending, higher than the post-World War II average and going up as a percentage of the economy. We’re taxing less than the post-World War II average, and basically holding fairly stable. So the gap is growing between current and projected spending and revenues. In addition to that, 75% of the budget is now on autopilot, meaning we’ve written a blank check for social insurance programs, and other items. Interest is our second largest and fastest growing expense, for which we get nothing. And so, the bottom line is we’re out of control. You can’t grow your way out, you can’t tax your way out, you can’t cut your way out. You’re going to have to do all three of those things, and the sooner we do it, the better.”
He added, “What is going on right now is irresponsible, unethical and immoral. It must stop. This is about the future of our country, the future of our families and future generations of Americans. That’s why I’m in the fight.”
Walker noted that “we don’t have an immediate crisis,” but he warned, “we will have a crisis if we don’t end up changing course.”
“It would be a crisis of confidence in the ability of the U.S. to put its finances in order,” Walker said. “It would result in a failed debt auction, a significant increase in interest rates, a significant reduction in the economy, much worse than a recession. It would result in us losing significant international standing. It would result in significant domestic tranquility problems throughout the country. It’s something that we should never, ever want to happen. The people have to put pressure on Congress to act. They have to make the risk of doing nothing, greater than the political risk of doing something before we have a crisis. The answer is with the first three words in the Constitution. We, the people.”
Walker believes that a fiscal commission should be created by statute. “If you think Congress is going to address all the tough issues on social insurance, defense, and other discretionary spending, and taxes through the regular order on a piecemeal basis, you’re nuts,” Walker said. “That’s never going to happen and therefore, we need a special process.”
In addition to a commission, Walker is pushing for a fiscal responsibility amendment to the U.S. Constitution to be approved at a Constitutional Convention called by the states as described in Article V of the Constitution.
“The only thing that can bind current and future Congresses is a Constitutional amendment,” he said. “There’s two ways to get one. The old-fashioned way, two-thirds of the House, two-thirds of the Senate pass an identical proposal, goes to the states, three-quarters have to ratify it. I’ve been told by the leadership of Congress there’s no way that’s going to happen. So you’ve got to go to Plan B. The founders recognized that Congress may be so out of touch or out of control, or they could have a conflict on things like controlling spending, term limits, campaign finance, that the states needed to have an equal right to be able to propose amendments through a limited convention.”
As for the nature of the amendment itself, Walker said, “There’s three approaches. One approach is how the states do it, which is an annual balanced budget amendment. That does not make sense at the federal level. There’s no bipartisan support for that. The second is trying to achieve balance over a business cycle. That approach is used by some countries, including Switzerland and it has intellectual merit. But the third approach is what I prefer, which is a debt-to-GDP limit. Let’s set a credit card limit so that you can’t have debt-to-GDP over a specific number.
Hear more on Facing the Future. Concord Coalition Senior Advisor Bob Bixby hosts the program each week on WKXL in Concord N.H., and it is also available via podcast. Join us as The Concord Coalition team discusses issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.
