Analysis / Opinion
By David M. Walker | Tuesday, January 8, 2019
Twenty years ago, I was fortunate to become U.S. comptroller general. At that time, the federal government was in surplus and yet, having previously served as one of two public trustees for Social Security and Medicare, I knew that the federal government faced rising deficits and debt/GDP levels in the future due to known demographic trends and rising health care costs.
Three fiscally irresponsible actions happened in 2003. First, the federal government passed a second round of tax cuts that were debt financed. Second, the United States invaded Iraq and charged it to the national credit card. Finally, the federal government expanded Medicare to include prescription drugs adding over $8 trillion in new unfunded obligations to that program.
As a result of the above actions, I began a multi-year effort, in partnership with others, to raise the level of attention placed on fiscal issues. Those efforts paid off and deficits declined until the financial crisis occurred in late fiscal 2008 after I had left my position as comptroller general.
It is now clear that neither major political party is fiscally responsible. The Republicans focus primarily on tax cuts, the Democrats focus primarily on spending increases and neither party focuses on the “bottom line” and longer-term. For example, in the past year, legislative changes on both the tax and spending side of the ledger resulted in more than doubling the deficit for fiscal 2019.
Total debt subject to the debt ceiling limit is about $22 trillion today and growing versus $5.7 trillion at the end of fiscal 2000 and declining. Trillion-dollar annual deficits are projected to return in fiscal 2020. Shockingly, the Congressional Budge Office (CBO) projects the federal government will spend more on interest than national defense within five years and total interest costs will reach almost $1 trillion within 10 years. And what do we get for interest? Nothing.
It has become clear that most federal elected officials cannot be relied upon to voluntarily put our finances in order. Therefore, the time has come to enact a fiscal responsibility constitutional amendment that will force our federal elected officials to make tough choices regarding mandatory spending, tax preferences and other key structural challenges sooner rather than later.
Our nation’s Founders knew that federal elected officials might become so myopic and self-focused that the states would need to assert their power to protect “We the People.” Specifically, Article V of the U.S. Constitution provides a means for two-thirds of the states to call for a constitutional convention to consider one or more amendments to the U.S. Constitution.
I am one of many former senior-level federal public officials supporting an effort to call for a convention of states to focus solely on a needed fiscal responsibility amendment. This effort is being spearheaded by the Center for State-led National Debt solutions. Twenty-eight of the needed 34 states have already passed related resolutions. You can find out more about which states have passed the resolution and which ones remain at www.csnds.org.
Some fear that a state-led constitutional convention might spin out of control. This can be prevented by restricting the resolution to a single issue and by imposing civil and potentially criminal penalties on any delegates that go beyond the mandate for the convention. Furthermore, 38 states would be required to ratify any proposed constitutional amendment for it to become effective. These are adequate protections to prevent a “runaway” convention from making dramatic and unacceptable changes to the greatest governing document in the history of mankind — the U.S. Constitution.
The 17th Amendment (direct election of U.S. senators) demonstrated that Congress is likely to use the traditional approach to achieve a constitutional amendment if the threat of a state-led convention appears imminent.
Under that approach, two-thirds of the Senate and House pass a proposed amendment that must be ratified by three-quarters of the states. All 27 of our current amendments have followed this course and this approach is fine. However, we need to continue to fight for a state-led convention to make sure that the job gets done.
The longer we wait to put our nation’s finances in order the greater the degree of changes that will be needed and the less transition time that will be available to phase in those changes. In addition, the longer we wait to act the greater the risk of the greatest fiscal crisis in history. Such a crisis would adversely affect every American to differing degrees and would be felt around the world. Let’s work together to defuse our ticking debt bomb sooner versus later.
• David M. Walker is a former U.S. comptroller general.