Problems with Medicare trump those of Social Security, says comptroller general

Social Security is not in crisis, but the federal government does face large, unfunded commitments in the coming years, Comptroller General David M. Walker said Wednesday.

Walker, who heads the Government Accountability Office, said the real crisis facing America now is rising health care costs, which are expected to balloon in coming years as the baby boom generation retires. The deficit expected for Medicare, the government health care program for the elderly, is eight times that for Social Security, Walker said, and "a lot more difficult to solve." As a result, he urged policymakers to reform both programs, rein in discretionary spending and consider raising taxes.

The government should begin to tackle the health care situation by reducing fraud and abuse in the Medicare and Medicaid programs, which by some estimates amount to 15 percent of their total annual cost, Walker said. Other potential solutions, he added, could involve requiring doctors to follow best practices in providing care, better managing the health care needs of individuals who have serious medical conditions and taxing the value of health care benefits provided by employers to individuals.

The comptroller general spoke at a National Press Club briefing for senior government leaders sponsored by Government Executive.

Walker criticized as vague the Social Security proposal put forth by President Bush, which would allow younger workers to put aside a small portion of their incomes in private accounts. According to the GAO chief, private accounts only can be a part of a larger solution that will ultimately include a reduction in benefits, tax increases, or both.

President Bush's 2006 budget proposal, released earlier this week, represents "a very small step and a very modest down payment" in meeting the government's fiscal challenge, Walker said. The comptroller general praised the administration's effort, however, to begin a baseline review of federal programs based on evaluations of performance. The Bush budget would eliminate or reduce funding for 150 programs that the administration says have not lived up to expectations.

In the next few weeks, Walker said GAO will issue a report detailing challenges facing the government in the 21st century. The report will argue that much government spending is based on economic and social conditions that existed in the 1950s and 1960s and should now be re-examined. For example, he said, the definition of "disability" used by the military has not been updated since 1945, an era when much of the workforce performed blue-collar jobs.

Walker urged civil servants, and especially senior executives, to be a part of the solution by assisting with a review of the programs that they oversee and by spreading the word about the government's long-term fiscal health. "We need to do more to deal with public will," he said. "We need to engage them in a broader public dialogue about the role of government in the future and what they are willing to pay for."