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Presentation by The Honorable David M. Walker: Comptroller General of 
the United States: 

"Keeping America Great" 

Speech before the John F. Kennedy Forum-Leadership Symposium: 
JFK School of Government: 
Harvard University: 

March 6, 2006: 

United States Government Accountability Office: 


Thank you, David Gergen, for that kind introduction. It's wonderful to 
be here this evening. GAO has a special relationship with Harvard and 
with the John F. Kennedy School of Government. We're a relatively small 
agency, with just over 3,200 employees. Nonetheless, about 50 of them 
have degrees from Harvard, and another 50 or so GAO employees, 
including me, have received professional certificates from the JFK 
School. Fortunately, these numbers have been increasing at a healthy 
pace in recent years. 

As part of GAO's executive candidate development program, we also 
encourage all our new executives to attend the four-week Senior 
Managers in Government program here at the Kennedy School. We've found 
this has been an excellent way for our new executives to gain exposure 
to various leadership styles, skills, and concepts in order to improve 
their ability to solve problems and manage change. My special thanks to 
the program's director, Pete Zimmerman, who's been a good friend to GAO 
and me. 

Now more than ever, federal departments and agencies need men and women 
who can think critically and creatively. Harvard has delivered on that 
score in the past. 

I have little doubt that Harvard, in general, and the JFK School, in 
particular, will continue to play an important role in shaping what our 
government does and how it does business in the 21st century. However, 
while getting a degree from Harvard or another top school is an 
impressive start, it's not enough. As one of your alums, Theodore 
Roosevelt, pointed out, "it's character that counts" and you have to be 
"in the arena" of life to make a real and lasting difference. 

In 2006, 230 years after our nation declared its independence, the 
United States has much to be proud of and much to be thankful for. 
Today, we are among the world's oldest democracies and we are the sole 
superpower, with unparalleled economic, military, foreign policy, and 
cultural influence. Our overall standard of living remains 
exceptionally high. Compared to most nations, the United States ranks 
well on measures like personal income, public literacy, postsecondary 
education, and home ownership, to name a few. The United States is also 
a beacon of liberty, and Americans enjoy political and personal 
freedoms that are the envy of the world. 

At the same time, I'm also reminded of a saying from the Gospel of 
Luke, a saying that John F. Kennedy, the namesake of this school, 
sometimes quoted: "For of those to whom much is given, much is 
required." Just looking around this wonderful room it's clear how much 
we as Americans have been given. But it's equally clear that what's 
required of us now is action--action that will put our country back on 
a prudent and sustainable course, action that will help us discharge 
our stewardship responsibilities, and action that will help keep 
America great in the 21st century. 

In my view, the greatest threat to America's future isn't hiding in a 
cave somewhere in Afghanistan or Pakistan; it's right here at home, in 
our governments, in our businesses, on our campuses, and in our 
neighborhoods. What I'm talking about is declining values and comity 
combined with continuing ignorance, apathy, and inaction on a range of 
issues that are rapidly reshaping our nation and our world. 

These issues include changing demographics, global economic trends, new 
security threats, and serious challenges in such areas as education, 
energy, health care, and the environment. Several of these challenges 
are unprecedented in their size, scope, complexity, and potential 
impact. Unfortunately, these issues are getting too little attention, 
provoking too little concern, and prompting too little action. No 
disrespect to Yogi Berra, but "déjà vu all over again" just isn't going 
to cut it anymore. 

Today in America, both policymakers and the public need to face the 
facts, take a long-term perspective, and recognize the reality that 
real reform and some shared sacrifice are called for. After all, if we 
believe in the concept of stewardship, when our time on this earth is 
nearing an end, we should be able to look our children and our 
grandchildren in the eye and say we did everything we could to pass on 
an America that's better off and better positioned for the future. 
Unfortunately, we aren't anywhere close to being able to do that today. 

Tonight, I'm going to talk about some of our challenges to give you a 
better sense of where we're headed and why it's so urgent that we 
transform government, and do it very soon. I'm then going to talk about 
the need for real leadership and what each of us can do to help keep 
America great. 

21st Century Challenges: 

What are these known changes and challenges? Let me start with one of 
the most sweeping agents of change, and that's demographics. 
Demographics will decisively shape the American and global landscape in 
the future. 

Our population is aging. At the same time, U.S. workforce growth is 
slowing. This means that just when increasing numbers of baby boomers 
are starting to retire and draw benefits, there will be fewer workers 
paying taxes and contributing to social insurance programs. 
Importantly, retirees are living longer but wanting to retire earlier. 
These developments are going to put huge strains on our pension and 
health care systems. 

Beyond demographics, the United States confronts a range of other 
challenges. Globalization is affecting our international 
competitiveness, our trade posture, our capital markets, our jobs, and 
our approach to environmental and public health issues. For example, 
globalization is a key reason public health experts are so concerned 
about the rapid spread of viruses like avian flu. 

With the end of the Cold War, we face new security threats, including 
transnational terrorist networks and rogue states armed with nuclear 

Other challenges come from technology. In recent decades, spectacular 
advances in technology have transformed everything from how we do 
business to how we communicate to how we treat and cure diseases. But 
because of technology, we're also struggling with privacy, security, 
and other concerns. Unfortunately, the United States--which gave the 
world Thomas Edison, the Wright brothers, Jonas Salk, and Bill Gates-- 
now ranks 25th in the world on math and science testing results. 

As I mentioned before, our quality of life in many ways has never been 
better. But America also faces a growing and unhealthy gap between the 
haves and the have-nots. And as some of you may know firsthand, we're 
also facing a range of quality-of-life concerns in our personal lives, 
including underachieving public schools, gridlocked city streets, and 
the stresses of caring for aging parents and growing children all at 
once. At the same time, our nation's health care system is in critical 
condition, plagued by growing gaps in insurance coverage, soaring 
costs, and below-average results on basic measures like medical error 
rates, infant mortality, and life expectancy. 

Our Nation's Four Deficits: 

Perhaps the most urgent challenge we face is our nation's deteriorating 
financial condition and growing fiscal imbalance. The United States now 
confronts four interrelated deficits with serious implications for our 
role in the world, our economic growth, our standard of living, and 
even our national security. 

The first deficit is the federal budget deficit, which in 2005 was 
around $319 billion on a cash basis. This widely reported number is 
somewhat misleading, because without the Social Security surpluses, the 
federal cash-based deficit was actually closer to $500 billion. 
Moreover, on an accrual basis, our fiscal 2005 deficit was $760 
billion, up $144 billion in the last year alone. 

Even more troubling, the federal government's long-term liabilities and 
unfunded commitments for things like Social Security and Medicare 
benefits have risen to more than $46 trillion. That's up from about $20 
trillion just five years ago. The new Medicare prescription drug 
benefit, which may be one of the most poorly designed, inefficiently 
implemented, and fiscally irresponsible government programs of all 
time, has added more than $8 trillion to this sea of red ink. And these 
numbers don't even take into account the bills that are coming from 
rebuilding New Orleans and the Gulf Coast or future costs associated 
with Iraq and Afghanistan. 

In recent years, we've heard calls to relieve Americans of burdens like 
the so-called "death tax," but we need to talk more about the very real 
and growing "birth burden." That's what I call the staggering amount of 
government commitments that every American, including newborns, will 
some day have to pay for. 

As a result, every new birth certificate now comes with a bill of 
$156,000. With a birth burden like this, it's no wonder that newborn 
babies cry! Alternatively, this means that every full-time worker 
carries a de facto debt load of $375,000. For a dual-income family, 
this is like having a $750,000 mortgage without owning a house! 
Unfortunately, these numbers are growing every second of every day 
because of continuing deficits, known demographic trends, and 
compounding interest costs. 

The second deficit is our savings deficit. Too many Americans--from 
individual consumers to elected officials--are spending today as if 
there's no tomorrow. Consequently, America has the lowest overall 
savings rate of any major industrialized nation. 

The annual U.S saving rate as a percentage of disposable personal 
income has been falling for some time. But last year, for the first 
time since 1933, our annual saving rate was in negative territory. 
Think about it. We've returned to saving levels not seen since the 
depths of the Great Depression. Clearly, many Americans, like the 
federal government, are living beyond their means and are deeply in 
debt. This trend is particularly alarming in an aging society such as 
our own. Those Americans who save more will certainly live better in 

The bottom line is, those Americans who fail to plan, save, invest, and 
preserve their savings for retirement are rolling the dice, and given 
the problems with our nation's retirement system, the odds are heavily 
stacked against them. 

So, if we aren't saving at home, who's been underwriting America's 
recent spending spree? The answer is foreign investors. And that brings 
me to America's third deficit--our overall balance-of-payments deficit. 
America is simply spending more than it's producing. In 2005, the U.S. 
trade deficit hit about $726 billion, up more than $100 billion from 
the prior year. 

While our own saving rates have plummeted, savings rates abroad have 
not, and overseas money has been pouring into the United States. Thanks 
to the high savings rates in China, Japan, and elsewhere, it's been 
relatively cheap for Americans to borrow. But there's a catch, and it's 
a big one. Increasingly, we are mortgaging our collective future, and 
some of our leading lenders may not share our long-term national 
interests. Imagine what would happen to interest rates on Treasury 
securities if these foreign investors suddenly decided to buy fewer of 
these securities or, worse yet, started to sell off their U.S. 

Finally, there's our fourth deficit, and it's probably the most 
sobering deficit of all. What I'm talking about is America's leadership 

Not enough key policymakers are concerned about America's growing 
fiscal imbalance and the other long-term challenges that I've 
mentioned. As a result, there have been pitifully few calls for making 
tough choices or fundamental reform. 

At both ends of Pennsylvania Avenue, on both sides of the political 
aisle, and at all levels of government, there have been too few 
champions who have the courage to speak the truth, to make tough 
choices, and to bring about real, fundamental, and lasting change. 
Instead, the government's continuing lack of fiscal discipline and 
business-as-usual attitude have made our long-term situation even 
worse. The government's recent spending sprees and tax cuts are nothing 
less than a body blow to overall fiscal responsibility. Candidly, "tax 
and spend" policies aren't advisable, but enacting tax cuts and 
spending hikes at the same time isn't a good idea either. The truth is, 
if our nation took a fiscal fitness test today, it would flunk! 

Unfortunately, Wall Street and the business community are not being as 
vocal on this issue as they have in the past. Stated differently, they 
are largely "missing in action." Both government and the private sector 
tend to suffer from the dual afflictions of myopia and tunnel vision. 
At the same time, the private sector really does have a dog in this 
fiscal fight, because if government keeps on as it has, companies are 
going to pay a price, such as rising tax burdens, higher interest 
rates, and/or the impacts of slower economic growth. 

What we've got going are the elements of a perfect storm, a potent mix 
of ignorance, apathy, and inaction at all levels and in many sectors of 
American society. If we continue on our present course, a fiscal crisis 
is not a matter of if but when. 

Transforming Government: 

If our nation is to be prepared for the challenges and changes that are 
coming, government transformation is essential. The challenges I've 
discussed aren't partisan issues, and the solutions won't be either. 

In my view, the first order of business is to restore fiscal 
discipline. We've got to stop digging our fiscal hole deeper. Right 
now, we need to set realistic spending caps and re-impose pay-as-you-go 
rules on both the spending and the tax sides of the ledger. We also 
need to implement some triggers to alert policymakers to excessive 
spending and facilitate the long-overdue and much-needed reform of 
mandatory spending programs and tax expenditures. Members of Congress 
should also have more explicit information on the long-term costs of 
spending and tax bills--before they vote on them. The new Medicare 
prescription drug benefit has become the poster child for needed 
changes in this area. 

More broadly, I'd urge both appointed and career officials at every 
federal agency and program to give careful thought to their missions 
and operations in light of current trends and future realities. 

The problem is that way too much of government today remains on 
autopilot and is based on social, economic, national security, and 
other conditions that existed when Harry Truman, Dwight Eisenhower, and 
John F. Kennedy were in the White House. 

As a nation, we need to ask what is the proper role of the federal 
government in the 21st century? How should it be organized? Should 
contractors or federal employees or some combination of the two provide 
government services? How much will it cost, and how will we pay for it? 

Nothing less than a top-to-bottom review of federal programs and 
policies is needed to determine if they are meeting their objectives. 
This will 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 

Entitlement reform is particularly essential. We need to restructure 
Social Security, Medicare, and Medicaid and make these programs solvent 
and sustainable for future generations. We also need to reengineer the 
base of other federal spending and tax policies. 

To help in this effort, GAO has published an unprecedented report that 
asks a series of probing questions about current mandatory and 
discretionary spending programs and tax policies. For example, how can 
we better allocate resources across the armed services to address 
current and future credible security threats? Should we reconsider some 
long-standing tax incentives, such as the health care exclusion? Is it 
time for the federal government to update its organizational model and 
job classification and compensation systems, both of which date to the 

Our report is called "21st Century Challenges: Reexamining the Base of 
the Federal Government," and you can find it free on our Web site at 

I should stress that while GAO doesn't make public policy decisions, 
decades of experience and expertise put GAO in a unique position to 
help stimulate and inform discussion and debate on a broad range of 
issues as a key input into the policymaking process. 

I'm also hopeful that GAO's work will encourage the development of a 
set of key national indicators. These are quantitative and outcome- 
based measures that policymakers can use to better assess the United 
States' progress over time and relative to other nations on benchmark 
issues like public safety, health care, housing, education, the 
economy, and the environment. For years now, foreign governments and 
even some U.S. states and localities have been using indicators to 
successfully prioritize and target public resources. It's time for the 
U.S. government to do so. 

Transforming government won't happen overnight. Elected, appointed, and 
career officials will need to work together for a sustained period of 
time--perhaps a generation or longer. Public officials will need to 
reach across institutional and political lines. The federal government 
will need to partner with businesses, professional organizations, 
nonprofit groups, and other levels of government to develop new 
solutions to old problems. 

GAO: Leading by Example: 

We at GAO are determined to lead by example in the overall 
transformation effort. In recent years, we've undertaken a number of 
internal changes to enhance our performance, ensure our accountability, 
and help better position us for the future. By working together to 
create a strategic plan, realign our organizational structure, adopt a 
set of core values, and employ a balanced scorecard approach, we've 
made dramatic progress in just a few years. We've focused on achieving 
results while obtaining feedback from our congressional clients, our 
people, and partnerships with other entities both inside and outside of 
government. By doing so, we've managed to double our outcomes on many 
of the key performance results we've set for ourselves. 

No person and no organization will ever be perfect, so we're committed 
to a policy of continuous improvement. We're also committed to sharing 
our lessons learned and helping others to see their way forward. Our 
hope is that other agencies will be able to tailor many of GAO's 
efforts to meet their own needs. We also seek to learn from others both 
domestically and internationally. 

Leading Change to Mitigate Risk: 

Many of you in this room are our country's future leaders, and that 
brings me to my final point tonight. Today, it's clear that to deal 
with America's current and emerging challenges, we need effective 
leaders in all sectors of society and at all levels of government. That 
means elected, appointed, and career civil servants who are capable, 
caring, and committed. Leadership also needs to come from the private 
and nonprofit sectors and the media. In the final analysis, leaders in 
government and elsewhere need to have four key attributes: courage, 
integrity, creativity, and stewardship. 

Specifically, we need leaders who have the courage to state the facts, 
to speak the truth, and to do the right thing, even when it isn't 
popular. We need leaders who understand that our nation's fiscal 
challenge is not just about numbers, it's also about values. 

We need leaders who have the integrity to lead by example and to 
practice what they preach. Those in positions of power and trust must 
understand that the law represents the floor of acceptable behavior, 
and those individuals should strive to meet higher moral and ethical 
standards. We need leaders who are able to innovate and develop new 
solutions to old problems and who can help show others the way forward. 
Finally, we need leaders who take their stewardship responsibilities 
seriously. These individuals understand that their job is not just to 
leave things better off when they leave than when they came, but also 
to leave things better positioned for the future. 

When it comes to our growing fiscal imbalances and other challenges, 
effective leadership is essential. After all, history shows that 
dramatic and fundamental change typically results from either a crisis 
or real leadership. Personally, I prefer real leadership. However, the 
truth is that today, meaningful change is more likely to come from the 
combined efforts of many individuals, otherwise known as "we the 

Candidly, it is the American people who need to start speaking up and 
making their views known. After all, why should any elected official 
stick his or her neck out on a difficult issue that no one seems to 
care about? Younger Americans especially need to become active in this 
discussion because, like many of you here tonight, you and your 
children will bear the heaviest burden if today's leaders fail to act. 

Despite my sobering message here tonight, I don't want you to go away 
thinking that things are hopeless. That's far from true. I'm an 
optimist by nature and I'm also a student of history, so I know that 
the United States has risen to address significant challenges in the 
past. Today, we still have a real window of opportunity to turn things 
around. For many of the challenges I've discussed, a few meaningful 
reforms phased in over time will make a huge difference. And by acting 
sooner rather than later, we can minimize the need for drastic measures 
down the road and give everyone more time to adjust to the changes. 

More of us need to insist on the facts, accept the need for meaningful 
change and shared sacrifice, and fulfill our stewardship obligation to 
our country, our children, and our grandchildren. If "we the people" 
remain silent, our government will remain on autopilot, our burdens 
will mount, and our fiscal fuse will only get shorter. 

In closing, as President Kennedy said in his 1961 State of the Union 
address, "To state the facts frankly is not to despair the future nor 
indict the past. The prudent heir takes careful inventory of his 
legacies and gives a faithful accounting to those to whom he owes an 
obligation of trust…We do have no greater asset than the willingness of 
a free and determined people, through its elected officials, to face 
all problems frankly." 

The time has come for all of us to take these words to heart, 
especially when it comes to our nation's growing fiscal imbalance. For 
as Teddy Roosevelt said, "Fighting for the right [cause] is the noblest 
sport the world affords." Let's work together for a better future and 
to help keep America great. 

On the Web: 

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Paul Anderson, Managing Director, Public Affairs,, 
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