U.S. is courting fiscal meltdown, panel says
Paul O'Neill had a simple, forceful message for his Pittsburgh audience facing a presidential primary in less than a month.
"Hold our leaders to account," said the former U.S. Treasury Secretary (2001-02) and former Alcoa Inc. chairman (1987 to 2000).
O'Neill was part of a panel that passionately spoke Tuesday night in Oakland about the spiraling U.S. budget deficits, driven by runaway Medicare, Medicaid and Social Security spending.
The discussion, titled "America's Looming Fiscal Crisis: An Election-Year Wake-Up Call," was interrupted several times by applause from the more than 200 attending the event, sponsored by the University of Pittsburgh Honors College.
The total liabilities of the U.S. government stood at $20.4 trillion in 2000, said David Walker, comptroller general of the U.S. Government Accountability Office from 1998 until resigning two weeks ago. Now, it's $52.7 trillion.
"And we have yet to really hit the retirement of the baby boomers," Walker said. "We must re-engineer what the federal government is doing and get back to basics -- which is called the Constitution," he said to rousing applause.
The government spent about $20,000 for every American household in 2000, adjusted for inflation. Today, that figure is $25,517 per household, said Brian Riedl, senior policy analyst at the Heritage Foundation, a conservative think tank.
"And it's going to grow a lot more over the coming decades," Riedl said. Under current fiscal policy, every federal tax dollar by 2049 will go toward paying Social Security, Medicare and Medicaid -- nothing for defense, roads or anything else, he said.
"This is not about numbers. It's a moral issue," about overburdening future generations with debt, said Robert Bixby, executive director of the Concord Coalition, a nonpartisan organization dedicated to fiscal responsibility that co-sponsored last night's discussion.
Economist Alice Rivlin, former director of the Office of Management and Budget, warned that Social Security, Medicare and Medicaid costs are growing faster than the U.S. economy, which is unsustainable.
"We have made promises, mostly to older people, that we're not going to be able to keep," said Rivlin, a senior fellow at the Brookings Institution.