Former Comptroller Discusses Candidates And Debt
ANDREA SEABROOK, host:
Whoever's elected will have more than bad guys to worry about. He'll have a massive national debt, an annual budget deficit of nearly half-a-trillion dollar. For the candidates, that is just one issue of many, but for David Walker, it's the issue.
David Walker is the former comptroller general of United States. He's basically the country's auditor-in-chief, and now he's running the Peterson Foundation and crusading to make fiscal responsibility a priority in the presidential race.
David Walker and I talked about where the candidates stand on this, but first for the record:
Mr. DAVID WALKER (Former Comptroller General, United States): I have not endorsed either candidate. I'm staying neutral on the presidential race. I have spoken with leading economic policy advisors for both candidates, and I expect to stay in touch with both campaigns.
SEABROOK: Okay, I do know that the founder of your organization, Peter Peterson, he has endorsed John McCain.
Mr. WALKER: Pete Peterson endorsed John McCain about two years ago, before he even knew he was going to have the money to set up a foundation. That's his personal views. It's totally separate and distinct from the foundation, which is staunchly non-partisan and non-ideological.
SEABROOK: Okay, let's go through some numbers here. How much is the United States in the hole?
Mr. WALKER: The United States is in the hole $53 trillion as of last September.
SEABROOK: What do you mean by $53 trillion? I thought the national debt right now was somewhere upwards of $9 trillion.
Mr. WALKER: We've got about $11 trillion in liabilities, including debt held by the public, as well as a number of other liabilities. We have a $7 trillion unfunded obligation for Social Security, a $34 trillion unfunded obligation for Medicare, of which about $8 trillion relates to the new prescription drug benefit, which was supposed to save money, according to some, and a trillion dollars in miscellaneous. The total of all of that is $53 trillion, and how much money does the United States have to fund this? Zip.
SEABROOK: Now both candidates, John McCain and Barack Obama, have laid out some of their budget proposals on their Web sites. They're not terribly specific. McCain says he will have a balanced budget by 2013, largely by cutting spending. What do you think of that?
Mr. WALKER: Well, it's one thing to have a balanced budget by 2013, and it's one thing to say you're going to do it by cutting spending, but you need to get into specifics. I think what's more important is we're way beyond balancing the budget. We're in a $53-trillion hole that gets deeper $2 trillion to $3 trillion a year, even with a balanced budget. So those that say they merely want to balance the budget, it's not enough.
SEABROOK: Well, how does someone like you hear it when McCain says no new taxes?
Mr. WALKER: I think most of the gap is going to have to be made up through restructuring Medicare, health care and Social Security, as well as constraining spending, but in my personal view, we're going to need more revenues, as well.
SEABROOK: Let's turn to Obama now. He says he'll reinstate pay-as-you-go rules in budgeting in the Congress. He also says he'll stop the Iraq War and use that money to pay down deficits anyway. What do you think of that?
Mr. WALKER: Well, I think there are a lot of misconceptions out in America right now. You can eliminate all earmarks, you can eliminate all of the Bush tax cuts, and you can pull out of Iraq in January of 2009, and that only solves about 15 percent of our $53-trillion problem. We're going to need to do a lot more dramatic things than that.
SEABROOK: Which plan's better, Obama's or McCain's?
Mr. WALKER: I don't think either one of them have a plan yet that comes close to putting us on a more prudent fiscal path. In the case of Senator Obama, he's talking about a lot of additional spending. In the case of Senator McCain, he's talking about additional tax cuts.
Neither one of them plans to add up right now, but it's still fairly early, and I'm hoping that fiscal responsibility and intergenerational equity will become a major issue in the general-election campaign.
SEABROOK: David Walker is president and CEO of the Peter G. Peterson Foundation, a non-partisan think tank based in New York. Thanks very much, Mr. Walker.
Mr. WALKER: Happy to be with you. Take care.
SEABROOK: The Peter Peterson Foundation helped fund a new documentary film about the nation's debt. It's called "I.O.U.S.A." and it hits theaters later this month.
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