Government needs to clean closets

Is America ready to build a bridge over the demographic divide?

"To put simply: Our population is aging and living longer. Despite increased immigration, the U.S. work force growth is expected to slow dramatically during the next 50 years," Comptroller General David Walker said. "The problem is that in the coming decades, there aren't going to be enough full-time workers to promote strong economic growth to sustain existing entitlement programs."

Walker, the nation's auditor, has been telling anyone who will listen that our country's financial condition is "worse than advertised."

How bad? "A lot of press coverage focuses on year-to-year deficits numbers," Walker said in a speech at Brown University this month. "But current 10-year budget projections fail to take into account the huge costs associated with the impending retirement of baby boomers ... it's only when we take a long-term view that it becomes clear how serious a challenge we really face."

Too much of the federal government is set on autopilot. Program after program continues spending without consideration about either the merits or cost-effectiveness.

"American families regularly clean out their closets and attics," Walker said. "Surplus items are either sold at yard sales or given to charity. Unfortunately, when it comes to federal programs and policies, our government has never undertaken an equivalent of a spring cleaning."

This is a perfect time to start spring-cleaning. The presidential election cycle is beginning early -- and more exposure on the campaign trail ought to give candidates enough time to address serious issues beyond sound bites. But the candidates need to see this issue as important to voters. It's so much easier for candidates to find a detour around the demographic divide, rather than building a bridge across. We need to keep bringing up the uncomfortable subject.

Congress is only taking baby steps.

Last week, the Concord Coalition, the Center for Budget and Policy Priorities, Center for Economic Development and Committee for a Responsible Federal Budget released a joint statement that called on Congress to tighten its spending discipline by requiring that new proposals be either budget neutral or the money found from savings from existing funds. "Restoring the pay-as-you-go principle would, at a minimum, force Congress to weigh the short-term political attractions of new proposals against the long-term fiscal consequences. Given where deficits now stand and the known fiscal challenges that lie ahead, it is policy-makers' responsibility to do this," the statement said. "They owe future generations no less."

Senate Budget Chairman Kent Conrad, D-N.D., says the most important thing Congress can do now is stop growing the debt. "All the economists tell us the most important thing we have to do is to reverse the debt growing faster than the size of the economy," he said. "I am proud to report this budget does so."

But Conrad's committee budget is losing steam. A Democratic rewrite weakened pay-as-you-go rules, protected middle class tax cuts and generally proposed more spending.

"I don't assert that this is a perfect budget," Conrad said Friday. "If I had a totally free hand, I am certain it would be different. But at the end of the day, the test for us is, can we write a budget for our country? In three of the last five years, there has not been a budget for the United States of America. Let me repeat that. In three of the last five years, there has not been a budget for the United States."

House Budget Committee Chairman John Spratt Jr., D-S.C., would spend $6.5 billion more than the Senate -- although the House projects a larger surplus down the road. He admitted that his budget is not a "grand solution," but at least it moves the country in the right direction toward a balanced budget in five years. The House budget should be voted on this week.

Are Democrats ready to govern and build a bridge over our demographic divide? Clearly, not yet. Neither the Senate nor the House budget is as tough or as realistic as they could be.

But I keep hoping it's more of a "not yet" instead of a failure to see the country's actual fiscal picture.

Walker himself calls fiscal reform a tough sell; persuading elected officials to act now. "If we wait until a crisis hits, we'll have few options, and they'll be far harsher and more disruptive."

The good news is that we are not alone. Other countries are facing the same demographic trends.

The two best examples, Walker said, are Australia and New Zealand because they demonstrate that "it's politically possible to make difficult decisions that require short-term pain in the interest of long-term gain."

We can do this, too. But we need to quickly start building that bridge.