By Bill Zeeble, KERA News
http://stream.publicbroadcasting.net/production/mp3/kera/local-kera-984171.mp3
Dallas, TX – Former head of the U.S. General Accountability Office, David Walker, is on a crusade to tackle America's fiscal problems. A political Independent, he's held appointments by both Republican and Democratic presidents. Now he runs a non-profit offering solutions to restore the nation's fiscal health. Walker was just in Dallas and talked to KERA's Bill Zeeble about the federal money problems, Congressional Super Committee and other issues.
David Walker, former U.S. Comptroller General: The financial condition of the United States is a lot worse than advertised. The real challenge is not today's deficits - $1.4 trillion or more - not today's debt - $14.6 trillion - it's what lies ahead on our current path. If you end up taking total liabilities and unfunded promises for Medicare, Social Security, a range of commitments and contingencies, we're in a $62 trillion hole and it gets deeper every year without action.
Zeeble: How far does some tremendous fiscal burden go back, how many years?
Walker: We've complicated our situation dramatically in the past 10 years. Ten years ago, meaning at the end of fiscal 2000, we had $5.6 trillion in debt. Now we have $14.6 trillion in debt and we're increasing rapidly.
During the first 10 years of the 21st Century, were probably the most fiscally irresponsible in the history of the United States. After the budget controls expired in 2002, things got totally out of control. It's a bipartisan problem and we need to seek some bipartisan solutions.
Zeeble: What were those budget controls and why did they get out of hand?
Walker: Well they were pay-as-you-go rules that kept Washington from being able to expand government programs and make more promises when they had already over-promised. There were controls that prevented tax cuts if that would exacerbate our fiscal situation. There were discretionary spending caps that also included defense. And those had an impact, there was no doubt about it, but they expired at the end of 2002 and just in the first year alone there were three totally fiscally irresponsible actions taken by the Congress and the President. We need to broaden the tax base to eliminate, consolidate and better target a lot of deductions, exemptions, credits and exclusions. If we do that, we can then lower the top marginal tax rate to no more than 25 percent
Zeeble: So when you say reduce some exemptions, what people don't want touched, for example, is the mortgage exemption, that sort of thing.
Walker: I'll give you three significant exceptions. The first is charitable contributions. Government has grown too big, promised too much. It's going to have to restructure. That means the not-for-profit sector is going to become more important as we move ahead and therefore you ought to get full deduction for legitimate charitable contributions. Secondly, mortgage interest deduction. We don't have to eliminate it but we definitely have to reform it. Right now you get a deduction for up to two homes. One is a need. Two is a want. So eliminate the second. In addition, up to a million dollars per mortgage. What's the basis of a million dollars? It should be the maximum conforming loan, which varies by region of the United States. Because housing has different affordability level, but no where's a million dollars. And the third exemption is pensions and savings. We need to have reasonable incentives for pensions and savings. We need to consolidate a lot of our tax preferences but we need to make sure we have an adequate amount that remain.
Zeeble: And how confident are you those solutions will come out of this Super Committee that's supposed to come up with solutions in November?
Walker: I'm not optimistic that the Super Committee is going to come through with a grand bargain, if you will. They should be able to come up with at least $1.5 trillion in spending reductions over ten years. That's their charge. But realistically, I think the real tough choices, things like comprehensive Social Security reform, comprehensive Medicare Medicaid and Health care reform, comprehensive tax reform, aren't going to come till after the 2012 elections but they need to come soon after that.
David Walker, former U.S. Comptroller. He told Bill Zeeble Congress is far too partisan these days, but says a bipartisan solution is the only way to solve our fiscal problems.
GAO Website
David Walker's Wikipedia Page
'Comeback America Initiative' Homepage