Walker Sounds Alarm on Fiscal Health

Posted September 17, 2003 at 6:12pm

Comptroller General David Walker issued a stern warning Wednesday to Congress and the administration: The country’s fiscal outlook is bad and getting worse and you are doing inexcusably little about it.

But the head of the General Accounting Office wanted to be very clear about something in his speech to the National Press Club.

“I have not come here to criticize the actions of any particular person, proposal or political party on either end of Pennsylvania Avenue,” he said.

That may have been a good disclaimer because unlike about 90 percent of the reports GAO produces as Congress’ investigative arm, this counsel was not solicited.

Walker’s speech Wednesday continued on a much bigger stage what he began when he took the helm at GAO five years ago — provide Congress with professional, objective, fact-based, nonpartisan, nonideological analysis on issues that require a much wider lens than is often employed in two-year election cycles.

And in this speech — extremely rare but not unprecedented for a comptroller general — Walker said, without equivocation, that there is no more important issue than the fiscal health of the nation.

“The federal government’s fiscal 2002 annual financial report says a lot but not enough. The good news is that as of September 30, 2002, we had about $1 trillion in reported assets,” he said.

“The bad news is that we had almost $8 trillion in reported liabilities. According to my math, and I am a CPA, that left us with an approximate $7 trillion accumulated deficit, or a little over $24,000 for every many, woman and child in the United States.”

Worse, Walker said, is “while we are starting off in a financial hole, we don’t really have a very good picture of how deep it is” because the Congressional Budget Office and the Office of Management and Budget’s current measurement and scorekeeping approaches relay an incomplete and misleading picture of the government’s financial condition.

In an interview before the speech, Walker acknowledged that some might ask, “Why me?”

But while pointing out he is “one of many voices” to address an issue he thinks policymakers have all but ignored, Walker said GAO’s independence puts him in a position of credibility, and his 15-year tenure gives him an “opportunity and obligation to look at longer-term issues.”

“If not the comptroller general, then who?” he asked.

“What I am trying to do is issue a wake-up call that we have a serious crisis that demands attention,” he said before the speech. “I believe this is an issue that needs to be discussed and debated” before the presidential primaries and election “in a professional, objective, fact-based and nonpartisan fashion.”

In 1988 then-Comptroller General Charles Bowsher publicly warned Congress and the president about the huge deficits facing the country at the time. Although he did not explicitly say so, however, Bowsher’s remarks were widely viewed as an endorsement for tax increases.

“I’m not an elected official,” Walker said, explaining that he intentionally did not offer a policy prescription.

Rather, he said, his goal was to point to a “disciplined process” to deal with the significant structural problem in the country’s finances.

The issue, he said, is also a personal one. “I am a citizen, taxpayer, father and grandfather … they all lead me to the same conclusion: We must begin to come to grips with the daunting fiscal realities that threaten our nation, children and grandchildren’s future.”

Walker has made the federal government’s fiscal outlook a priority in the first five years of his tenure. He’s also been associated with trying to reform human capital management, which he describes as “trying to help transform what the government does and how it does business.”

What’s the role of the federal government in the 21st century? How should it be organized? How should the government do business? And who should do the government’s business?

Walker wants to help Congress answer these questions. “The threats and challenges facing the United States in its position in the world” and the country’s “stark fiscal realities,” he said, implore Congress to ask them.

Under his direction, GAO has tried to lead by example in government transformation. Three years ago, GAO received authority to restructure the agency, including new flexibilities to offer voluntary early retirement and buyouts. Prior to that, GAO released its first strategic plan. The result was a complete restructuring, closing five of 16 offices and eliminating a layer of management.

He states with pride that his agency has the same number of people it did five years ago, but new efficiencies have doubled the “return on investment,” so that for every dollar spent on GAO, $88 in savings is yielded to taxpayers.

Walker says Congress has noticed GAO’s efforts to be the vanguard of transformation and efficiency.

Directly from the speech Wednesday, Walker went before the House Government Reform subcommittee on civil service and agency organization to testify on addressing duplicative and overlapping government programs.

In fact, the panel has had several hearings this year on civil-service reform (including Defense Department pay-for-performance proposals), and Walker testified as an expert at all of them.

But Walker isn’t yet done with GAO. Bills have been introduced in both chambers that would provide GAO new flexibilities in human capital. (They would also change the agency’s name to the Government Accountability Office, which Walker thinks would better reflect how its role has evolved since it was created in 1921.) The House Government Reform panel has reported it out of committee, and the measure is awaiting action in the Senate. Walker said Wednesday that he was “cautiously optimistic” that the bill would pass.

In all this, Walker has found himself in a rather unusual, almost unprecedented, position: He has requested oversight hearings in both chambers.

“I spoke with Senator [Susan] Collins [R-Maine], who is chairwoman of our oversight committee, and told her that I would like the opportunity to update the committee and hear their comments, questions and concerns,” he said.

He went before the Governmental Affairs panel Tuesday, and the House has tentatively scheduled a full committee hearing on the agency next year.

“It’s a little unusual to ask for an oversight hearing,” Walker said. “We’re in the performance and accountability business. I am proud of what we’ve done.”