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Former GAO chief: federal debt and commitments amount to a $56-trillion hole

That adds up to almost a half million dollars for every household in the country, he says

Address to the American Accounting Association by David M. Walker, president of the Peter G. Peterson Foundation and formerly U.S. Comptroller General and head of the Government Accountability Office

Monday, August 3, 8:30-9:45 a.m.

Are the numbers coming out of Washington these days on government deficits and debt as scary as they seem? Yes, and then some, according to a man singularly equipped to know.

During his 10 years as Comptroller General of the United States and head of the Government Accountability Office, from 1998 to 2008, David M. Walker served as the federal government's chief auditor. Today, as president of a foundation, he can speak out without inhibition on what he sees happening to the country.

And what he sees alarms him. The government's financial condition, Walker says, is appreciably worse than advertised, as imprudent and irresponsible policies threaten to mortgage the country's future while reducing the relative level of sound investments in that future. Even the nation's triple A credit rating, which it has enjoyed for almost a century, is in jeopardy, Walker believes.

In his view, the nation's current debt of $11 trillion, alarming though it may be, barely hints at the seriousness of the nation's financial dilemma. Add on promised Social Security and Medicare benefits plus a range of other commitments and contingencies, and the federal government is in a $56 trillion hole, he says. That amounts to $184,000 for every person living in the U.S. and almost a half million dollars for every household.

The latest cause for alarm is health care reform. In Walker's view, proposals to date have not begun to grapple with the question of what level of coverage is affordable and sustainable. And nothing has been proposed to eliminate such anomalies of the current system as the granting of federal tax subsidies for employer-funded health insurance but not for but not for insurance paid for by individuals As he put it recently, "We subsidize CEOs' gold-plated health-care packages, while many hard-working low-income families without employer-based health care are on their own."

Is there a way out? Walker sees grounds for hope in a recent national survey which revealed that two thirds of Americans consider the nation's deficit and debt to be a major threat to the country's future, as compared to only 24 percent who see global warming in that light. The survey also showed broad support for an action-oriented national commission that would engage the public and make a series of recommendations on which Congress would be required to vote.

The speech will be a highlight of the Annual Meeting of the 93-year-old American Accounting Association, which, with over 8,000 members, is a worldwide organization devoted to excellence in accounting education, research, and practice. Some 3,000 accounting scholars and practitioners, a record number, are expected to attend the meeting August 1-5 in New York City.


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