Tick tock. Another non-partisan report has been released providing clear evidence that our nation’s finances are a ticking time bomb. The report even provides instructions on which wires Congress needs to cut to diffuse the impending debt crisis. While politicians have become accustomed to simply reacting to the short-term news cycle, this report shows that there are far greater issues just over the horizon that Congress must act on now.
Just recently, Gene Dodaro, the Comptroller General of the United States, testified in front of the Senate Homeland Security and Governmental Affairs Committee to bring attention to our nation’s fiscal condition. “I am worried about the overall fiscal health of the federal government. The federal government is on a long-term unsustainable fiscal path. I call for an action plan by the Congress to deal with fiscal policy changes that are needed to be made.”
In addition to his testimony, Mr. Dodaro brought attention to a report the Government Accountability Office (GAO) released in January. According to the report, the deficit in FY2016 increased to $587 billion, a $148 billion increase from FY2015, spending increased by $166.5, billion due to rises in Social Security, Medicare, Medicaid and interest on the nation’s debt, and the debt held by the public rose from 74% to 77% as a share of Gross Domestic Product (GDP). The report notes that without action, “the federal government’s fiscal path is unsustainable and that the debt-to-GDP ratio would surpass its historical high of 106 percent within 15 to 25 years.”
Luckily, the federal government has an agency that is highlighting our long-term problems and has laid out an action plan with several proposals for Congress to address them.
The first is a reduction in improper payments. According to GAO, improper payments in 2016 were over $166 billion and total over $1.2 trillion since 2003.
Second, GAO suggests addressing the Tax Gap (difference between taxes owed and taxes paid). Annually, the Tax Gap is estimated to be around half a trillion dollars.
Third, the duplication of federal programs and agencies. Since 2011, GAO has released a duplication report that aims to streamline and achieve cost savings in Congress and the Executive Branch. So far, that report will yield over $136 billion in savings due to Congress and the Executive Branch taking action on GAO’s recommendations.
Finally, GAO says that by strengthening internal financial reporting controls, agencies could contribute to a more sustainable fiscal future.
The hearing offered much hope for our country’s financial outlook, but Mr. Dodaro emphasized that most of the savings will have to come from Congress. That means Congress will have to proactively work on these fiscal solutions laid out by GAO in conjunction with entitlement reform, which Mr. Dodaro called “essential.”
The Comptroller General essential gave Congress a road map to diffusing our country’s debt bomb, and, as the GAO report affirms, “the longer action is delayed, the greater and more drastic the changes will have to be.” There is no question about the nation’s dire long-term budget problems, the only question is will Congress act before it explodes?