This speech was given by the Comptroller General before the CII Annual Conference audience in Grapevine, Texas on July 20, 2005. The United States currently faces three deficits with significant economic and other implications for our future. These are our federal budget deficit, our balance of payments deficit, and our savings deficit. A vast majority of our current federal budget deficit has nothing to do with the global war against terrorism and incremental homeland security costs. More important than any current and short-term deficits, we face large and growing structural deficits in the future due primarily to known demographic trends, rising health care costs and relatively low federal revenues as a percentage of the economy. Our second deficit is our nation's balance-of-payments deficit, of which our record trade deficit is a sub-set. The third is our overall savings deficit. The United States has the lowest savings rate of any major industrialized country which means, among others things, that we have to increasingly rely on foreign players to finance our budget deficits and excess domestic consumption. These three deficits represent a much greater long-term threat to the United States than any country or terrorist group. They also present enormous leadership challenges. Failure to act decisively and in a timely manner to address this "triple threat" may represent the greatest risk to our collective future with significant domestic and international implications. As at the founding of our nation, we need more leaders today who have the vision to see the way forward, the courage to challenge the status quo, and the willingness to take on the many vested interests necessary in order to help create a more positive future for our country and all Americans. We need more leaders in government, the private sector and the not-for profit sector who will rise to the challenge in order to help ensure that our best days are ahead of us rather than behind us. Today I would like to focus my remarks on the federal government's current leadership needs. Importantly, these needs are not partisan in nature, they are not confined to one branch of government, and they involve elected, appointed and career positions, including military and civilian personnel.

Much of the federal government's current policies, programs, functions and activities are based on conditions that existed in the United States and the world in the 1950s and 1960s. As a result, many federal entitlement programs, discretionary and mandatory spending practices, tax policies and government operations are outdated, duplicative, ineffective, unaffordable and/or unsustainable. As a result, the "status quo" is unacceptable and we need to review and rationalize the base of the federal government in order to create a more positive future. Without a plan and key outcome-based indicators, we cannot effectively prioritize and target federal policies and programs, nor can we assess their effectiveness. In addition, in the absence of such outcome-based indicators, many assume that the only way to increase related results is through additional spending or tax preferences. This assumption is both simplistic and wrong. The United States Government is arguably the largest, most complex and most important entity on the face of the earth. As a result, we must have top-flight elected, appointed and career civil service leaders to address the many complex and controversial challenges that we face, while capitalizing on related opportunities. If we don't, we are all in trouble. However, a number of actions will be necessary in order to help make sure that this need is effectively addressed in the challenging years that lie ahead. This includes recognizing the many positive things that government does, some of which relate to so-called "greater good" activities that the private sector either cannot, will not, or should not address. It also involves showing appropriate respect for and appreciation of those individuals who have dedicated their careers to public service. Leadership in government spans elected, appointed and career positions. It involves persons with formal position power as well as individuals who have significant informal influence. With regard to the business and operations side of government, leadership is fundamentally different than management. Management is focused mostly on today and is designed to help improve quality, economy and efficiency. Leadership is focused more on the future and involves dealing with uncertainty while helping to improve organizational positioning, visibility and effectiveness. Leaders will not be effective or reach their full potential unless they earn and maintain the trust of those they seek to lead. In my view, leaders can facilitate and expedite needed organizational transformations in government by focusing on five key elements - strategic planning, organizational alignment, performance measurement, employee empowerment and effective communications. In conclusion, we live in the greatest country on earth and have the greatest republic in the history of all mankind. We have much to be proud of and much to be thankful for. Clearly, we have achieved a great deal since the founding of our republic and we have overcome many great threats and challenges. After all, in America, anything is possible in time with capable, caring, and courageous leadership and the support of the people.