This speech was given by the Comptroller General before the AGA's 54th Annual Professional Development Conference on July 12, 2005. The United States currently faces three deficits with significant economic and other implications for our future. The first is our federal budget deficit, a vast majority of which has nothing to do with the current 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. The 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 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 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. In my view, our country is at a critical crossroads in its history. The choices that key policymakers and other key players make, or fail to make, within the next decade will likely have profound implications for the future of our country, children and grandchildren. Key policymakers need to recognize the realities of our current imprudent and unsustainable fiscal path. They also need to heed the key warning signs relating to our education, energy, environmental health care, infrastructure and other important public policy challenges.

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. Believe it or not, despite the fact that the federal government spends over $2.5 trillion a year, provides hundreds of billions in tax preferences a year and publishes thousands of pages of regulations a year, the United States Government still lacks a government-wide strategic plan as well as a set of key national indicators to help assess the nation's position and progress over time and in relation to other countries. 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. 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. With regard to the business and operations 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. Accountability professionals have a critically important role to play in helping to address the much needed and long overdue review and re-examination of the base of the federal government. This will involve both direct and indirect leadership roles. GAO has and will continue to do its part to "lead by example." GAO has also taken a number of steps to help modernize the accountability profession, both in government and the private sector. At GAO, we can do well by ourselves but we can do much better if we "partner for progress" with other accountability and "good government" organizations and individuals, both domestically and internationally. One of the key challenges that federal government leaders will need to address in the years ahead is to determine what the federal government should do, how the government should do business, who should do the government's business, and how we will pay for it. This transformation will take years and will require concerted and continuing efforts by elected, appointed and career officials, including accountability professionals. 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.