The Need for Leadership and Stewardship:

21st Century Challenges and Opportunities: The Getzen Lecture in Government Accountability

GAO-06-1040CG: Published: Feb 8, 2006. Publicly Released: Feb 8, 2006.

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This is a Comptroller General speech before the School of Public and International Affairs at the University of Georgia on February 8, 2006. Discussions about accountability in government all too often focus on infuriating cases of waste, fraud, abuse, and mismanagement. We should have zero tolerance for waste, fraud, abuse, and mismanagement even though it will never be zero in an entity the size of the U.S. government. But candidly, we could eliminate every dollar of waste, fraud, abuse, and mismanagement in government and we'd still face serious accountability challenges. For example, where's the accountability for spending increases and tax cuts that are unaffordable and unsustainable over time? Where's the accountability for spending programs and tax policies that can't show they're delivering real results? Where's the accountability for federal activities that are rooted in the past and no longer meet current, let alone future, needs? Where's the accountability for thousands of earmarks, or congressional pet projects, at a time of huge budget deficits? Finally, where's the accountability for public officials who do what is arguably legal rather than what is ethically and morally right? Is it really any wonder that our federal accountability challenges have gone from millions to billions to trillions of dollars? At the same time, it's all too easy to lose sight of the biggest accountability problem in government today. And that's the continuing unwillingness of policymakers to face the facts, to take a long-term perspective, to prepare our country and its citizens for the challenges that lie ahead, and to start addressing a range of large, known, and growing problems. Despite increased immigration, U.S. workforce growth is expected to slow dramatically during the next 50 years. Like most industrialized nations, the United States will have fewer full-time workers paying taxes and contributing to federal social insurance programs. At the same time, growing numbers of retirees will be claiming their Social Security, Medicare, and Medicaid benefits. Many of these retirees will live far longer than their parents and grandparents. Perhaps the most urgent challenge is our nation's worsening financial condition and growing long-term fiscal imbalance. Largely because of the aging of the baby boomers and rising health care costs, America faces decades of red ink. Despite what some say, deficits do matter--especially if they're large and structural in nature. As a CPA and the federal official who signs off on the audit of the government's consolidated financial statements, I'm here to tell you that our nation's financial condition is worse than advertised. Frankly, the government's business model is broken and it's time we fixed it. Despite strong economic growth, in fiscal year 2004, the federal unified budget deficit reached a record $412 billion. The unified deficit dropped to $319 billion in 2005, but even that number is imprudently high given that that federal spending will begin to rise dramatically when the baby boomers begin to retire later this decade. Many of you would probably be surprised to learn that the global war on terrorism and incremental homeland security expenses accounted for only about $100 billion of our annual deficits in 2004 and 2005. And while the unified budget deficit fell more than $90 billion from 2004 to 2005, the accrual-based deficit increased $144 billion from $616 billion to $760 billion during that same period. Clearly, a crunch is coming, and eventually every federal program and service will take a hit. If we continue as we have, higher interest rates and inflation are inevitable. It is only a matter of when and how high. The time to start doing something is now.

As a first step in addressing our mounting fiscal challenges, we need to follow the rule of holes. What do I mean by the rule of holes? It's simple: Before you can get yourself out of hole, you first need to stop digging! Every federal agency and every federal program must revisit and, when appropriate, revise its missions and operations in light of 21st century changes and challenges. At the same time, government continues to expand, with new federal programs and initiatives added every year. Washington rarely seems to question the wisdom of existing federal commitments. Ronald Reagan once said that "the nearest thing to eternal life we'll ever see on this earth is a government program." Nothing less than a top-to-bottom review of federal activities is needed to determine whether they are meeting their objectives and achieving real results. This review would also help free up resources for other needs. Congress and the President need to decide which policies and programs remain priorities, which should be overhauled, and which have simply outlived their usefulness. To help in this effort, GAO recently published an unprecedented and groundbreaking report that asks a series of probing, sometimes provocative, questions about both mandatory and discretionary spending and tax policy. Transforming government isn't something that will happen overnight. Elected, appointed, and career officials will need to work together closely for a sustained period of time--perhaps a generation or longer. Public officials will need to reach across institutional lines and partner with other government agencies, businesses, professional organizations, and nonprofit groups. And politicians will need to focus more on what's right for our country rather than what's right for their party. It's going to take patience, persistence, perseverance, and even pain before we prevail in transforming government. But prevail we must.

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