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Hearing of House Subcommittee on Government Management, Finance, and Accountability - the Financial Report of the U.S. Government for Fiscal Year 2004

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Location: Washington, DC


HEARING OF HOUSE SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, FINANCE, AND ACCOUNTABILITY - THE FINANCIAL REPORT OF THE U.S. GOVERNMENT FOR FISCAL YEAR 2004

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Ms. Foxx. Yes. Mr. Walker, I appreciate very much what the chairman was just saying. Not having had the privilege to have heard you before, I wonder if you are saying you wouldn't characterize it as a crisis. That seems to be what the popular press picks up in a lot of cases is that it is no crisis, therefore we don't need to deal with it. The chairman is indicating that you have tried in times past to indicate to people that there is a real problem.

Do you have any other suggestions? Or you may want to tell me this later if you have already said it in the meeting. How do you get people's attention. If you don't want to call it a crisis, then how do you get people's attention that if nothing is done it soon will become a crisis?

Again, I don't need you to go into great detail, but it is obvious you have given it some thought.

Mr. Walker. The first thing is before you can solve a problem there has to be broad-based consensus that there is a problem that needs to be solved, and there also has to be at least majority agreement that--I mean on both sides of the aisle, a majority of total members and of the population hopefully--that believe that it is prudent to act sooner rather than later.

I would be happy to provide you and your office my testimony before the House Budget Committee--I will give you one today. It lays out a number of reasons why it is prudent that we act sooner rather than later.

The biggest reason is you can look at it micro or macro. On a micro level, the sooner you act the less dramatic the changes have to be, the more time you have to phase it in, because time is currently working against us. The problem is getting bigger every day because of known demographic trends.

From a macro standpoint, this is a small downpayment on the work that has to be done. It is $3.7 trillion out of $43 trillion. We need to start solving some of these long-range imbalances. With Social Security you have the potential to exceed the expectation of all generations of Americans, that sounds like to me it could be a win.

I think part of the problem is there has been too much focus on individual elements of a possible proposal like, for example, individual accounts. I mean, individual accounts may or may not be part of a comprehensive solution to Social Security, but even if they are, they are only going to be a piece of a package and other things have to happen in order to assure the solvency and sustainability of the system.

I have been very concerned because there is no doubt in my mind I believe that a clear and compelling case can be made that it is prudent to act now. At the same point in time, we are not off on a very good foot because it is too partisan, it is too ideological, and it is too focused on individual elements of a potential reform package rather than reaching the first objective. The first objective is to obtain agreement that we have a problem. It is a large and growing problem. We need to solve it, and it is prudent to solve it sooner rather than later. Once we are there, then we can talk about how best to go about that, what are the possible elements and related tradeoffs, what are the pros and cons.

I honestly believe, based on my experience as a trustee, and being on two Social Security Reform Commissions in the past, having been involved in national town hall meetings around the country on these issues in the past, that the American people are a lot smarter than many give them credit. I give them a lot of credit. I am sure you all do, too. They are very smart. You give them the facts. You speak the truth. They will empower you to act.

Mr. Platts. And that education process, what the problem is today is a critically important first step, because I describe it as a problem that we need to address. If we don't, it will be a crisis for when we reach that 2018 or 2042, whatever year in the future it will become a crisis if we don't address the problem we have today.

Mr. Walker. That is true, and part of the problem is that many times Government historically has not addressed issues until a crisis is upon us, which is fundamentally imprudent given these known demographic trends and our long-range imbalances.

Let me give you an example real quickly and I will move out of this. In 1983, when the Greenspan Commission was created, we were within weeks of not sending out the checks on time. Now, believe me, that would be a crisis. There would be a big signal.

Mr. Platts. You wouldn't want to be in our District offices when that happens.

Ms. Foxx. Right.

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