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David Walker
Political/Philanthropic leader

David Walker

Former Comptroller General of the United States, David Walker is president and CEO of the Peter G. Peterson Foundation.

Chipping away at our structural debt

Q:The overwhelming consensus among economists is that the economy needs another shot of short-term stimulus spending. But as the president and congressional leaders have discovered in trying to pass a new stimulus bill, voters want to start bringing the deficit down now. Is this one of those leadership moments when it is better to accommodate strong constituent beliefs rather than trying to convince them they are wrong?

Leadership is sometimes about doing what is right even though it may not be popular. However, to be able to do so the reasons for the related action must be publicly explained in an understandable manner. In addition, the leaders involved must have enough credibility so that their explanations will be believable and their actions acceptable.

Unfortunately, not enough has been done by responsible government officials to explain the difference between our short-term deficits, which are driven largely by temporary factors, and our longer-term structural deficits, which are driven largely by demographics and health care costs. These longer-term structural deficits represent the true threat to our country's and families' futures. In addition, elected officials currently lack credibility with the public in dealing with our escalating deficits and debt.

Given the current state of affairs, a prudent course now would be to take certain temporary, properly designed and appropriately conditioned steps to help ensure that we do not experience a "double dip" recession and to help reduce unemployment. These steps would, however, be coupled with concrete actions designed to demonstrate that Washington understands and will begin dealing with our structural deficits.

One possible step in connection with addressing our structural deficit could be to enact statutory budget controls that would take effect at appropriate points in time (e.g., PAYGO rules that take effect immediately, spending caps that take effect once we are sure that the economy has stabilized and once unemployment reaches a stated level). Another could be to guarantee by law that any of the President's Fiscal Responsibility and Reform Commission's recommendations that receive 14 votes out of the 18 members will receive an expedited vote in Congress. Still another could be to enact statutory enforcement provisions that will ensure that the recently passed health care law will result in the deficit reduction that has been advertised.

In the final analysis, concrete actions rather than words or processes will be needed to restore the public's faith in government. The time to start is now!

By David Walker

 |  June 25, 2010; 11:47 AM ET
Category:  Presidential leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Mr. Walker has posted something of a 'nothing' analysis. That is, sure we need to address the structural debt issue. But how about providing a concrete example of the sort of trade off required to do this. Like those government officials who have not 'done enough' (noting that Mr. Walker was also a government official), Mr. Walker has elected here to pass the buck to an appointed commission.

What really needs to get out in the open are some of the very hard choices that are going to be needed - choices regarding what might be seen as health rationing and health care cost triage -- both pretty much '3rd rail' issues that need to find the light of day.

Posted by: Barry8 | June 25, 2010 3:05 PM
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