No big budget deal before 2012 election, says former comptroller general

Addressing the nation's budget crisis requires a "grand bargain" -- even double the $1.5 trillion Congress aims to save by Thanksgiving -- and such a deal is politically unlikely until after the 2012 elections, former Comptroller General David Walker said on Wednesday.

"We've got to present the American people with some tough choices, regardless of who wins in 2012," after which "everything must be on the table, from Medicare, to the health care law to tax reform, so we can get past the rhetoric and focus on results," he said.

Walker, who spent nine years heading the Government Accountability Office, is currently sounding the alarm on the nation's long-term debt crisis as chief executive officer of the nonprofit Comeback America Initiative. He spoke at the Ronald Reagan Center to the inaugural town hall meeting produced by Government Executive Media Group and attended by federal employees.

An approach like President Obama's new jobs proposal, Walker said, could be helpful as "a short-term step even if it exacerbates the deficit, as long as it's properly designed, paid for and coupled with a real plan with concrete long-term steps for dealing with the deficits that lie ahead," he said. But he called Obama's proposal to pay for his plan through tax hikes "politically unrealistic." And he said the provision for a payroll tax holiday "doesn't make sense," calling instead for more-targeted relief for new employees and employers, but not all recipients.

What's needed, Walker said, is "more certainty in regulations and the tax code" to spur investment from corporations, that "have trillions on their balance sheets and offshore."

With a current budget deficit at $1.3 trillion and $14 trillion in long-term government debt and political gridlock, Walker said he finds it "embarrassing to describe our fiscal and political situation" when traveling abroad. The United States was recently ranked 28th out of 34 developed nations for fiscal responsibility, he said.

"We're in a bad neighborhood, and the problem is not today's debt but what lies ahead," the former comptroller general said. With the gap between revenue and expectations for Medicare and Social Security, health care, education, deteriorating infrastructure and immigration, "the government has grown too fast and promised too much," he said. "The decisions made in the next five years will determine our future, how rapidly we approach the tipping point. If it happens, it will be felt not just in the United States but around the world."

Though his background is in accounting, Walker freely blasted the nation's "broken" political system, saying, "We have deficits in the budget, trade and savings, but the leadership deficit is by far the worst." Too many politicians go for "partisan advantage and short-term focus, they treat the symptoms and not the disease, and they look at issues in isolation," he said.

He faulted Democrats for creating an "imprudent" new entitlement program under the 2010 Affordable Care Act and the Republicans for doing so in the 2003 Medicare prescription drug benefit.

He likened lawmakers to the Wimpy character from the old "Popeye" cartoon, who said, "I will gladly pay you Tuesday for a hamburger today." Of course, Walker said, "Tuesday never comes."

Walker said he is less concerned about partisanship than the ideological divide. "Parties are captive to the wing nuts left and right," he said. Washington is "dominated by career politicians, who may care about issues but have never had a real job, which is not conducive to innovation or tough choices for transformational change."

In his current position at a nonprofit, Walker is free to call for political reform, even constitutional amendments, that he hopes would "restore civility and bring constructive compromise." He'd like to see redistricting reform (he notes that only about 75 congressional districts hold competitive races). He'd like open, integrated primaries for voters of both parties, in which the top two vote-getters would advance to the general election. "That would increase turnout and give more power to the sensible center," he said, calling the United States a "center-right" nation.

He would also recommend campaign finance reform, term limits of 12-18 years, and even state constitutional conventions that, he believes, could be limited under the Constitution to specified topics of reform to avoid "runaway conventions."

Asked what could be done about politicians' attacks on federal workers, Walker said, "I think public service is a high calling, and I have respect for civil servants as capable, dedicated people. But those people didn't pass the laws. It's a copout to say we can [fix the budget] on the backs of federal employees," he added, but "the government has grown too big and there are outdated concepts that need modernization."

Asked about such inside-the-Beltway notions as "current services budgeting," Walker said one reason the public is skeptical about government is that everyday words take on special Washington meanings. "A cut is a reduction in the rate of increase," he said. A "requirement" for the Pentagon is something on its "wish list" that can't be questioned on whether it's affordable or sustainable. And a trust fund? "You can't trust 'em and they're not funded," he said.

Asked whether performance data are useful at agencies, Walker said they "are largely a paperwork exercise" until the government has a "strategic forward-looking, threat-based plan saying 'this is what we want to accomplish and this is how we measure success.' "

Asked about prospects for reorganizing government to remove duplication and achieve efficiencies, Walker said there are 35 agencies that focus on financial literacy. "Who authorized them?" he asked. But not all duplication is inefficient, he added. People need to find out "how much is statutory control and how much is mission creep."

Asked about prospects for reforming Social Security, Walker stressed the need for a "fact-based" discussion, saying the retirement program is neither in crisis nor problem-free. He said when President George W. Bush campaigned to give recipients the option of using portions of Social Security funds for private investment accounts, he was forgetting that "the second word in the program is security, not opportunity." What is needed are supplemental individual savings accounts, he added. "We would have gotten them back in 1999 if not for the blue-dress incident," referring to President Clinton's troubles in the Monica Lewinski affair.

Walker sympathized with agency representatives who complained that Congress' dependence on continuing resolutions makes planning difficult, and he acknowledged well the well-known tendency of agencies to spend money in the final months of the fiscal year to avoid losing it in the subsequent year's appropriation.

In the grand budget deal he hopes is coming, Walker said he would like to see "comprehensive reform, not a balanced approach, but a 3:1 spending-to-revenue ratio." What is needed is more discussion of metrics for deciding what is a tax increase, he said. He forecast more user fees, for example; tax reform that would mean fewer tax deductions and exclusions; and the tapping of new revenues through income-means testing of benefits in Medicare Parts B and D, which are voluntary programs.

Such approaches, Walker said, "would not violate the pledge" against raising taxes that so many politicians have signed.