COMMENTARY: Fiscal leadership, not laggardship, needed from candidates

Many leaders from the government and the private and nonprofit sectors have expressed concerns regarding our substantial federal deficits and mounting debt burdens. Despite this, the two major presidential candidates are ignoring the issue while making promises that will make our fiscal outlook worse rather than better.

They also promise not to touch Social Security and Medicare, even though these programs will suffer significant benefit cuts if reforms are not enacted. For example, if reforms are not adopted, Social Security will be required to implement a 21 percent across-the-board benefit cut in 2033. The candidates should be providing leadership rather than laggardship regarding these vital issues.

While it is understandable that candidates are hesitant to talk about specific spending cuts, tax increases and social insurance reforms. At the same time, on the campaign trail, they must acknowledge that the federal government has lost control of the nation’s finances and that tough choices will be needed to restore fiscal sanity and sustainability. It is also appropriate for them to discuss a “way forward” to achieve the necessary reforms.

Let’s put a few facts on the table. Total federal debt/GDP is at an all-time high and is increasing rapidly. Mandatory spending as a percentage of the budget is at a record high and growing. Annual interest expense has passed spending on defense and Medicare and is our fastest-growing expense. Some major investors in U.S. debt, such as China and Japan, are curbing their appetites. In addition, Brazil, Russia, India and China are planning to create a new reserve currency to challenge the dominance of the U.S. dollar. These serve to threaten our collective future.

There are significant philosophical differences regarding the role of the federal government between the two major candidates. One candidate wants to shrink the federal government, minimize federal regulation and hold the line on federal taxation. The other candidate wants to grow the government, increase regulation and increase federal taxation. These are huge differences.

While there are significant differences in their philosophies and the long-term fiscal effect of their proposals, they would increase our fiscal challenge if they were adopted. We are in a huge financial hole that we need to address. The last thing we should do is dig deeper.

Regarding a way forward, the candidates need to acknowledge that we are on an imprudent and unsustainable fiscal path, and they should commit to taking steps to defuse our ticking debt bomb.

They should support the need for a statutory Fiscal Sustainability Commission that would engage the American people and make reform recommendations that would reduce debt/GDP to a reasonable and sustainable level and save Social Security. The commission’s package of recommendations would receive a guaranteed vote in Congress.

They should also support the need for a constitutional amendment limiting how much debt as a percentage of the economy the nation can take on. Only a constitutional amendment can bind current and future Congresses and force them to make the tough choices necessary to maintain fiscal sanity over time.

Finally, they should support the need for a Government Transformation (Efficiency) Commission. This commission would recommend which aspects of the federal government should be devolved to the states, eliminated or consolidated, and how modern management principles can be adopted throughout the federal government to make it more efficient and effective. The commission would report to the president, who would then propose related legislation to Congress.

The time has come to recognize reality. We are mortgaging the future of our country and families at record rates. This is irresponsible, unethical and immoral. Only the president is elected by all the people. In addition, only the president has the “bully pulpit” to address all Americans and pressure Congress to act. The presidential election is less than a month away. The time for leadership versus laggardship is now.

David M. Walker is the chair of the Federal Fiscal Sustainability Foundation board and a former U.S. comptroller general. He wrote this for InsideSources.com.