Many leaders from the government and the private and nonprofit sectors have expressed concerns regarding our substantial federal deficits and mounting debt burdens. Despite this, the two major presidential candidates are ignoring the issue while making promises that will make our fiscal outlook worse rather than better.
They also promise not to touch Social Security and Medicare, even though these programs will suffer significant benefit cuts if reforms are not enacted. For example, if reforms are not adopted, Social Security will be required to implement a 21% across-the-board benefit cut in 2033. The candidates should be providing leadership rather than laggardship regarding these vital issues.
While it is understandable that candidates are hesitant to talk about specific spending cuts, tax increases and social insurance reforms. At the same time, on the campaign trail, they must acknowledge that the federal government has lost control of the nation’s finances and that tough choices will be needed to restore fiscal sanity and sustainability. It is also appropriate for them to discuss a “way forward” to achieve the necessary reforms.
Let’s put a few facts on the table. Total federal debt/GDP is at an all-time high and is increasing rapidly. Mandatory spending as a percentage of the budget is at a record high and growing. Annual interest expense has passed spending on defense and Medicare and is our fastest-growing expense. Some major investors in U.S. debt, like China and Japan, are curbing their appetites. In addition, Brazil, Russia, India and China are planning to create a new reserve currency to challenge the dominance of the U.S. dollar. These serve to threaten our collective future.
The candidates need to acknowledge that we are on an imprudent and unsustainable fiscal path, and they should commit to taking steps to defuse our ticking debt bomb.
They should support the need for a statutory Fiscal Sustainability Commission that would engage the American people and make reform recommendations that would reduce debt/GDP to a reasonable and sustainable level and save Social Security.
They should also support the need for a constitutional amendment limiting how much debt as a percentage of the economy the nation can take on. Only a constitutional amendment can bind current and future Congresses and force them to make the tough choices necessary to maintain fiscal sanity over time.
Finally, they should support the need for a Government Transformation (Efficiency) Commission. This commission would recommend which aspects of the federal government should be devolved to the states, eliminated or consolidated, and how modern management principles can be adopted throughout the federal government to make it more efficient and effective.
The time has come to recognize reality. We are mortgaging the future of our country and families at record rates. This is irresponsible, unethical and immoral.
David M. Walker is the chair of the Federal Fiscal Sustainability Foundation board and a former U.S. Comptroller General/InsideSources
