Our Deficit and Debt Dirty Bomb

By David M. Walker
|  Tuesday, Mar 10, 2009  |  Updated 7:45 AM EDT
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Blame Them For Your Empty Wallet

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By well over two to one, Americans rate our growing deficit and debt as a greater threat than global warming.

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Global warming, declines in education and manufacturing, a rogue nation developing a nuclear weapon — these are all very real, well-known threats to the future of the United States and its citizens. So it tells you something when voters rate another threat to our future as even more serious: our growing budget deficits and debts.

New public opinion research conducted by Peter Hart and Bill McInturff shows that 66 percent of registered voters surveyed see our deficit and debt as a “very big threat to our country and its future,” compared with 58 percent who say the same about an unfriendly nation developing nuclear weapon capabilities; 57 percent and 52 percent saying the same about declines in manufacturing and American schools, respectively; and 24 percent saying the same about global climate change.

By well over two to one, Americans rate our growing deficit and debt as a greater threat than global warming. Indeed, the former may do us in before the latter. 

As usual, the electorate is way ahead of Washington policymakers who don’t yet realize that we cannot spend and borrow our way to prosperity, no matter how well-intentioned the proposals. The omni­bus spending bill making its way through Congress includes $410 billion in discretionary spending for fiscal 2009 — an 8.3 percent increase over fiscal 2008, with thousands of earmarks. That can hardly be called fiscally responsible.

President Barack Obama’s first budget blueprint contains many commendable provisions but also contains too much new spending and debt. His pledge to cut the deficit over the course of his first term is encouraging, and he is right to target health care as our toughest fiscal challenge. But spending more money to expand access to health care without first pausing to gain control of costs or lower our already huge, unfunded obligations could negate any near-term reductions in the deficit. 

Comprehensive health care reform should save money, not cost money. The government already has overpromised on this issue. 

As more baby boomers retire, the nation’s unfunded commitments in Medicare and Social Security benefits — which now make up approximately $43 trillion of our $56.4 trillion federal financial burden — continue to grow at a rate of up to $3 trillion per year. As deficits and wage gaps widen and inefficiencies mount, our tax code becomes increasingly imbalanced and unsustainable. As our country grows more dependent on foreign lenders, we give them more leverage over our foreign policy and give up more control of our own destiny.

Our economy and our families are also at risk of incurring much higher interest rates, inflation levels and tax burdens once the economy begins to turn around.

Voters rank the need to address our budget challenges as a top priority for the Obama administration, second only to the pre-eminent need to get the economy back on track and get Americans back to work and far higher in importance than passing health care reform. When it comes to choosing from the menu of most commonly discussed policy solutions, the picture gets blurry. Not surprisingly, voters are more likely to favor proposals that won’t affect them personally or for which the trade-offs are not as clear.

But Washington doesn’t have to remain a laggard in taking steps toward solving these problems. The survey shows broad support among the American people for a bipartisan, beyond-the-Beltway solution in the form of an action-oriented commission that would engage the public and make a series of recommendations on which Congress would be required to vote. Obama has indicated he is open to keeping all options, including a commission, on the table. Hopefully he’ll act on this one.

The federal government is a huge ship that takes time to turn. We need to begin putting a process in place now so that lawmakers will be able to make the tough but necessary budget, Social Security, health care, tax and other reforms necessary once we get past our immediate crisis and our economy begins to grow again. The risks of not doing so are large and growing.

David M. Walker is president and CEO of the Peter G. Peterson Foundation and was the comptroller general of the United States from 1998 to 2008.

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