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Comptroller General Predicts Fiscal Crisis
East Oregonian/Associated Press
Top fiscal watchdog predicts crisis if steps not taken
December 5, 2005

PORTLAND (AP) — U.S. Comptroller General David Walker says he's a realist, not a pessimist, that the reality isn't good and that the numbers don't lie.

The head of the U.S. Government Accountability Office told the Portland City Club Friday that there is a "demographic tidal wave" on the horizon in the form of retiring baby boomers and that the status quo cannot be maintained.

He said Americans spend too much, save too little and that the country can't afford all the entitlements such as Social Security, Medicare and Medicaid that it has promised its citizens.

Walker was appointed to a 15-year term in 1998, cannot be ousted and thus is free to speak his mind.

He is visiting 10 cities in what he called the "fiscal wake-up call tour."

"We have too many people who don't want to face the facts," he said.

"Our nation's financial condition is worse than advertised," Walker said. "We face large and growing structural deficits due primarily to known demographic trends" tied to promises made to retiring baby boomers.

He said rising medical costs are the factor most likely to bankrupt the nation and that the health care system must be gradually reformed.

There is a disconnect, he said, between the unlimited wants of some Medicare recipients and what the nation can pay.

He has said that as things stand the United States would have to cut spending by 60 percent or raise taxes by 2 1/2 times to balance the budget by 2040 and that Iraq is not the problem.

"Our recent annual federal budget deficits have far exceeded the cost associated with the global war against terrorism," Walker noted.

He said the fiscal 2005 budget deficit was down some $100 billion from 2004 but that it was still "imprudently high."

Federal Reserve Chairman Alan Greenspan issued a similar caution this week.

Earlier Friday President Bush painted a rosier picture.

"We have every reason to be optimistic about our economic future," Bush said, adding that "our economic horizon is as bright as it's been in a long time."

Walker said America's unfunded liabilities were $20 trillion at the end of fiscal 2000 and are at $46 trillion today.

He blamed a lack of leaders willing to rise above partisan politics.

"We have way too many people focusing on today, on the next election cycle, not enough people preparing for tomorrow," he contended.

"In the final analysis we're going to have to reform entitlement programs, spending, and look at the revenue side," he said.

He cited what he called the First Rule of Holes: "When you are in a hole, stop digging."

"We are still digging at or near record rates and we haven't hit the demographic tidal wave yet."

Commentary:
Maybe we should cut taxes again. There will never be another tax cut in our history, so I hope everyone enjoyed it while it lasted. Will grow-ups take power again soon?