Walker, Fiscal Ranger

The GAO's Comptroller General Crusaded for Budget Balancing

It could be that no one outside the White House knows more about how the federal government has changed under the Bush administration than David Walker, who retired Mar. 13 as the comptroller general, head of the Government Accountability Office.

 

For nine years, Walker pushed GAO, Congress's independent auditing arm, to use its knowledge and independence as a strong voice on the biggest policy issues of the day. No longer mere bureaucratic accountants, Walker's GAO sued Vice President Dick Cheney for refusing to reveal the members of his energy task force. And he put GAO in the thick of the bitter Pentagon debate over changing course in Iraq.

 

So while Congress seemed to roll over during what can be viewed as a strategic executive power grab, Walker's GAO was an unlikely voice yelling "Stop!" to executive secrecy and preemptive "war on terror" adventures. This is a very different role from what the General Accounting Office used to do, which was to run numbers for Congress's budgets for federal agencies.

 

"He was definitely a more high-profile comptroller general," said Adam Hughes, a fiscal policy director at OMB Watch, a non-government-affiliated watchdog group. "It wasn't about just making sure the books were okay. It was making sure government was working well."

 

As he changed the focus of GAO, Walker set his sights on an more ambitious challenge. He embarked on a "Fiscal Wake-Up Tour," barnstorming the nation's college campuses and rotary clubs. In his speeches, Walker compared the government's fiscal irresponsibility to the Roman Republic before Rome's fall.

 

Walker will now head the Peter G. Peterson Foundation. Ideologically, the foundation will likely take its cues from the Concord Coalition, a fiscally conservative beltway foundation Peterson co-founded and a partner in the wake-up tour. Peterson, a former Nixon Cabinet member, is the billionaire co-founder of the Blackstone Group, the largest private equity firm in the country.

 

Walker says that he and Peterson plan to school Americans about a government that they say has run on borrowed money for the past seven years. This completes Walker's transformation from auditor to advocate. And with his mission and Peterson's money, Walker could, for better or worse, bring America back to the 90's, when talk of balanced budgets dominated political discourse and even policy.

 

In 1998, When President Bill Clinton appointed Walker to a 15-year term as comptroller general, the budget was balanced. Walker said that era of fiscal responsibility went out the window when the congressionally mandated budget controls expired in 2002. "We haven't been making tough choices since," Walker told The Washington Independent. "Now we're at a trillion-dollar hole that the next generation will have to pay. It's not just fiscally irresponsible; it's morally wrong."

 

Walker tried to sound the alarm at GAO about wasteful spending throughout the federal government. He was a particularly harsh critic of the reliance on private contractors and lack of a chain of command in the Pentagon and Department of Homeland Security (see accompanying sidebar for Walker's defining moments). But while GAO could call government on the carpet, it wasn't able to shape policy.
"I've come to the realization that I need to be in the position to advocate specific solutions," Walker said earlier this week, sitting in his almost barren GAO office. "I've pushed the envelope about as far as I could in my current job."

 

What Walker will now be pushing full-time is the notion that the federal government cannot continue to borrow and spend money at its current pace. A combination of budget controls, tax reform, Social Security reform and changes in the health-care system needs to happen. And it needs to happen immediately with baby boomers starting to collect Social Security and Medicare checks.

 

Walker's advocacy has gained a following among the beltway's influential strategic class. Economists at both the liberal leaning Brookings Institution and conservative Heritage Foundation have joined the fiscal wake-up tour. It has also penetrated Congress. The House and Senate budget committee's have modeled legislation on the wake-up tour's idea of a bipartisan commission that would "put all options on the table."

 

Now he has a powerful and perhaps unlikely boss in Peterson, a fiscal conservative and commerce secretary in the Richard M. Nixon administration. Peterson is chairman emeritus at the Council on Foreign Relations, the most influential non-government foreign policy organization in the country. A recent New York Times profile described the 81 year-old billionaire as a man urgently, even desperately, pushing for his ideas to get heard in Washington.

 

The profile also noted that Peterson scored a coup in hiring Walker, and will allow him latitude in determining how best to get the fiscal responsibility message out to the masses.

 

"Walker is going to have a lot of resources to throw at his work," said John Irons, research and policy director at the liberal Economic Policy Institute. Irons sees the parallel between what Walker is embarking on and 1990's politics -- particularly billionaire H. Ross Perot's independent run for the presidency in 1992 and 1996 ."Perot was the first one known for waving some charts in the air and now Walker is waving the power points," Irons said.

 

Walker would consider the comparison a compliment. He has an autographed chart that Perot used during one of his famous half-hour TV infomercials in the 1992 campaign. "Ross Perot put fiscal responsibility on the national agenda," Walker said, "He didn't get elected but it had an impact on the person who did, Bill Clinton."

 

Irons and other liberal economists argue, however, that whatever smart spending occurred in the 1990's, neither Perot nor Clinton addressed the real fiscal crisis- an obscenely expensive and irrational health-care system. "It's not that we have a budget problem with health-care consequences," Irons said. "It's that we have a health-care problem with budgetary consequences."
Walker has scrutinized Medicare and Medicaid expenses, but has not focused attention on a national health-care program covering all ages and incomes.

 

Dean Baker, a co-director at the liberal Center for Economic and Policy Research agrees that Walker is misdiagnosing the symptoms of the problem. "We don't have a demographic program, we have a health-care problem," Baker said. "I think that David Walker's road show has the effect of confusing people on this issue."

 

While Irons and Baker want Walker to focus on the absence of national health care, conservatives bemoan his acceptance- and Peterson's as well- of government-run retirement and health programs. "He could be creating momentum for politicians to do the wrong thing," said Dan Mitchell, a senior fellow at the libertarian Cato Institute. "Politicians love the excuse of raising taxes."

 

Still liberal and conservative economists alike are applauding Walker for holding accountable an administration and Congress that has not considered long-term economic consequences. And as head of the Peterson Foundation, Walker will continue to make his influence felt -- one way or another.
"He could continue to make an impact," said Hughes, of OMB Watch. "You never know -- we may end up asking him for money."

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