Outspoken -- He Told Them So
This time last year, David Walker -- who quit his job as U.S. comptroller in March 2008 to sound the alarm about rising national debt -- was being called "Chicken Little." Now, not so much. Last week, the White House said that this year's federal budget deficit will approach $1.6 trillion, the highest on record, and that his spending programs over the next 10 years could require $9 trillion in borrowing -- for a total national debt that is likely to exceed the U.S. gross domestic product for the first time since World War II. Walker, whose 2008 documentary about the dangers of rising debt, "I.O.U.S.A.," is being updated and distributed free in January, spoke with Washington Post business reporter Frank Ahrens about a nation awash in a sea of red ink. Excerpts:
We've got a national debt. We've always had a national debt. Two hundred-some years later, we're still here. So what?
Good question. At the beginning of the republic in 1789, we had total debt of $75 million that was 40 percent of the economy. But we got something for that debt. We won our independence, and by the federal government assuming all the debt of the states, we were able to gain agreement on the Constitution of the United States. Today, when you consider both debt held by the public and debt held by the trust funds, we are rapidly approaching total debt of 85 percent of our economy -- over double what it was to win our independence. The question is, what have we gotten for it? And we ain't seen nothing yet, because it's scheduled to get much worse unless we end up making some dramatic and fundamental reforms.
It's critically important that we reimpose statutory budget controls tougher than the ones that we had in the 1990s, which helped to take us from large and growing deficits to large and growing surpluses. We need to do that as soon as we turn the corner on the economy. We also need to reform Social Security to make it solvent, sustainable, secure and more savings-oriented. It's really not that difficult. We need to reduce health-care costs. You can't do that by expanding coverage. By definition, expanding coverage will increase health-care costs, not decrease health-care costs.
With statutory reforms, you're talking about tough laws that require balanced budgets, right?
I'm talking about caps on discretionary spending increases, pay-as-you-go rules on both new proposed spending programs and tax actions, in addition to mandatory reconsideration triggers for both spending programs and tax preferences. Furthermore, to mandate that one has to consider the longer-term cost and consequences of major legislative proposals before they're enacted into law. For example, not just what the cost is over 10 years, but what are they likely to do beyond 10 years? Because all too frequently people will play games with the scorekeeping to be able to enact things into law that we might be able to afford in the short term but there's no way we can sustain over time. . . . We can't wait till we get a crisis with the federal government's finances. Because if we do, it will start with a D, not an R.
What does that mean?
Depression, not recession, okay? We must take steps to avoid a crisis. Now, we can do it, and frankly, President Obama has said things publicly that leads one to believe that he wants to do it. He said when he was taking office that he didn't want to kick the can down the road anymore. He talked about making tough choices. And within the last month he acknowledged in an interview that it may take a special commission to put elected officials in a position where they can make those tough choices.