Spending Is Out of Control

This is an article written by the Comptroller General, which appeared in the IdeasOutside Shot column, in the November 14, 2005, issue of Business Week. The Roman Republic fell for many reasons, but three seem particularly relevant for our times: (1) declining moral and ethical values and political comity at home, (2) over confidence and over extension abroad, and (3) fiscal irresponsibility by the central government. All these are certainly matters of significant concern today. But it is the third area that is the focus of my responsibility and authority as Comptroller General, the nation's top auditor and chief accountability officer. Unfortunately, there is no question that both U.S. government spending and tax cuts are spiraling out of control. Recent increases in federal budget deficits have far out paced the cost of the global war on terrorism and incremental homeland security costs. Although the $319 billion fiscal 2005 deficit was considerably lower than the previous year's, it is still imprudently high--especially given that federal spending is expected to increase dramatically when the baby boomers begin to retire later this decade. Less well known, the federal government's long-term liabilities and net commitments, such as those relating to Social Security and Medicare, have risen from just over $20 trillion in fiscal 2000 to more than $43 trillion in fiscal 2004, in large part because of the passage of the Medicare prescription drug bill in December, 2003. This translates into a burden of more than $150,000 per American and $350,000 per fulltime worker, up from $72,000 and $165,000 in 2000, respectively. Those amounts are growing fast because of continuing deficits, our aging society, slower work force growth, and compounding interest costs.