Recently Released GAO Report Highlights Severity of Long-Term Debt Crisis

Thursday, March 4, 2010

Washington, D.C. – Former Senate Budget Committee Chairman Pete V. Domenici (R-NM) and Dr. Alice Rivlin, former Clinton Budget Director, Congressional Budget Office Director and Vice-Chair of the Fed, Co-Chairs of the Bipartisan Policy Center’s Debt Reduction Task Force, issued the following statement regarding the Government Accountability Office’s (GAO) long-term fiscal outlook released this week:

“The GAO’s latest release of its periodic fiscal outlook underscores the increasing seriousness of our nation’s long-term debt crisis. As co-chairs of the Bipartisan Policy Center’s Debt Reduction Task Force, we believe the severity of this crisis calls for quick action on a serious, long-term budget plan.

“The GAO report found that recent events have made the fiscal challenge greater, calling on policymakers to change the long-term fiscal path as soon as possible. The report noted that many of the long-term challenges, including health care cost growth and the aging of the population, have ‘already begun to affect the federal budget—in some cases sooner than previously estimated—and the pressures only grow in the coming decade.’

“The report observes that ‘simulations by GAO, the Office of Management and Budget, CBO and others, which use some different assumptions, all show an unsustainable long-term fiscal path.’ In particular, the GAO report projects ‘that debt held by the public will exceed 100% of GDP by 2019, and that 93 cents of every dollar of federal revenue will be spent on the major entitlement programs and net interest costs by 2020,’ with very little remaining for the defense of the nation and the fundamental responsibilities of government.

“The report concludes that the longer action is delayed, the larger the changes will have to be to stabilize the nation’s fiscal policy.

“Our bipartisan Task Force has begun intensive work on a long-term budget plan to reduce projected federal debt and place our nation on a sustainable fiscal path.”

The Task Force brings together some of the nation’s preeminent budget experts, former cabinet officers and elected officials, as well as representatives of the academic, faith, seniors, business, and labor sectors. The Task Force began a series of meetings in February 2010 to examine a broad range of deficit reduction options followed by intensive deliberations on a long-term budget plan. It will transmit its recommendations for long-term debt reduction to Congress, the Administration and the American people by the end of this year.

The bipartisan task force includes, in addition to Sen. Domenici and Dr. Rivlin, the Reverend A.R. Bernard Sr., Robert Bixby, Gov. James Blanchard, Prof. Sheila Burke, Dr. Leonard Burman, Robert Campbell III, Secretary Henry Cisneros, Secretary Carlos Gutierrez, G. William Hoagland, Gov. Frank Keating, Karen Kerrigan, Maya MacGuineas, Dr. Donald Marron, Ed McElroy, Dr. Joseph Minarik, Mayor Marc Morial, Prof. William Novelli, and Mayor Anthony Williams. The Task Force Project Director is Charles Konigsberg.

The full GAO long-term fiscal outlook is available here.

Eileen McMenamin, Vice President of Communications

(202) 379-1633

emcmenamin@bipartisanpolicy.org
2010-03-04 00:00:00
Senator Domenici and Dr. Rivlin, Co-Chairs of the Bipartisan Policy Center’s Debt Reduction Task Force, React to GAO Fiscal Outlook