Gov't Financial Condition 'Worse Than Advertised'
Washington (May 20, 2005) - The federal government's current fiscal business model isn't sustainable and major changes need to be made, the Comptroller General told a group of New York CPAs here.
"I believe we have a broken business model and...we're on an unsustainable fiscal path," David M. Walker, head of the U.S. Government Accountability Office, said in an address to the New York State Society of CPAs at the group's annual election and meeting in New York Wednesday.
"Our financial condition is worse than advertised," Walker warned. "You'd flunk math if you think we're going to grow our way out of this."
Walker said Social Security, Medicare and Medicaid currently account for 19 percent of the federal budget. And while the issue of funding Social Security is making media headlines, he noted that Medicare costs account for "eight times more of our fiscal imbalance."
Walker, a former Arthur Andersen partner, urged his fellow CPAs to help educate the public about the government's worsening financial state.
"It's important that CPAs play a part in the public education campaign," he told his fellow CPAs. "'P' stands for public, which means public interest. Our profession is in the trust business."
In his opening remarks, he also advised the group that there are "lessons to be learned from Andersen's decline."
"It takes decades to build a quality reputation, and it can be lost very quickly," said Walker, adding, "particularly when the government overreacts as they did in the Andersen case."
— Melissa Klein Aguilar