[hat tip to Tax Prof]
David Walker, former U.S. comptroller general and head of the GAO from 1998 to 2008, is now the CEO of the Peter G. Peterson Foundation. (Peter Peterson founded the Blackstone Group, another one of those investment groups with connections to people in power throughout the government, and served as Secretary of Commerce to Richard Nixon.) Clinton originally appointed Walker to the comptroller general position, which he held throughout the W Bush administration, but he was also a Labor Department assistant secretary under Reagan.
Walker is a bean counter at heart--he worked as a CPA for Coopers & Lybrand and Arthur Andersen before going into government work. He is one of those who harp on fiscal deficits and complain about the U.S. commitment to providing health care to all its citizens. See David Morgan, America the Bankrupt, GAO Head Takes Fiscal Show On The Road To Warn Of Trouble Ahead, AP, Oct. 28, 2006 (reporting on Walker's "fiscal wake-up tour" to talk about the "demographic tsunami to come from baby boomer retirement); Testimony of David M. Walker, President and CEO, Peter G. Peterson Foundation, Before the House Budget Committee (June 24, 2008). And now, in an opinion piece for CNN, David Walker uses the discredited Tax Foundation "tax freedom day" * to argue that Americans should prepare for their tax bills to double over time. See Commentary: Why your taxes could double, CNN.com, Apr. 15, 2009.
This appears at first glance to be a campaign to convince Americans that the so-called "entitlement programs"--Social Security, Medicaid, and Medicare--have to be eliminated or will cost too much. Especially when he refers frequently to the idea that "mandatory spending programs ... are clearly unsustainable," Testimony, at 2, or suggests a need for automatic reconsideration of spending programs, Testimony, at 4, or calls for 75-year projections for federal programs, with separate accounting for social insurance programs. Walker supports: transparency and "inter-generational equity"; the need for "social Security, Medicare, tax and health care reform", use of the "bully pulpit" to "help the American people understand... the consequences of failing to act; a "bi-partisan" approach to solutions; and a commission to address entitlements.
Regretably, that comes across primarily as an entitlement-ending agenda, one that the rabid, anti-welfare right-wing in this country has embraced for decades. Much of the attitude traces back to Reagan, who famously declared that the government was not the solution to the problem, because the government was the problem. It is pushed by the Heritage Foundation, one of the supporters of Walker's "crusade" on fiscal issues.
But let's assume that it is really about increasing transparency so that we make decisions --about "major entitlement, spending and tax proposals"--by looking to the long term rather than to the next election. So how does one consider whether this concern for deficits is worth giving up on universal health care for? First, one has to look at other countries that provide universal health care much more cheaply, and better, than we provide privatized health care. The conclusion there is that we should indeed reform the way we provide health care, and be willing to generate and spend some more tax dollars to do so, in order to ensure that every American has health care. Health insurers shouldn't be dictating medical decisions to doctors, and wealthy people shouldn't be the only ones able to get health care if they don't have health insurance at work. We need single-payer, single-provider health care, and that is worth thinking about.
But what about the rest of it. Doesn't the crusade against deficits based on the problems of "entitlement programs" sound an awful lot like the crusade against welfare just a few years back? There seems to be a good bit of ideology mixed in here. What if we cut military spending--the monstrosity created by four decades of throwing money at the military for anything they wanted--and use the savings on public infrastructure both tangible (roads, airports, rail) and intangible (education)? Or what if we taxed capital gains receipts the same way we tax wage income? Wouldn't that address our future problems without pushing the burden down on hardworking, low and middle-income Americans?
In other words, don't these scaremongering tactics about entitlements miss the point? Right now, Social Security surpluses are adding to, not taking away from, government revenues. Right now, we might predict that there wouldn't be enough money in Social Security to pay for the projected increased benefits in 2040, but we have the possibility of taxing capital gains receipts the same way we tax payrolls, so as to produce a significant increase in revenues to support these well-founded social programs. Right now, we have an opportunity for the first time in decades to cut our enormous military spending by recognizing that we don't have a superpower enemy intent on nuking us, but lots of little enemies capable of suicide-bombing us.
Walker claims that American's tax bill will double over time, due to the federal debt burden, and tries to "put things in perspective" by using a calculation of the federal day as of September 30, 2008 to conclude that "every man, woman and child in the country" will have to pay off that debt with $184,000. Of course, that calculation--besides averaging, again, the high bracket incomes with the low, also fails to consider the fact that debt is paid off over time, and so may be paid off with much higher incomes than those currently enjoyed, thus appearing to be less of a burden than when stated in 2008 dollars. In other words, the campaign appears to be intent on making all Americans resent entitlement spending because, it is claimed, every American's taxes will have to double to pay for it. While he includes tax increases in the list of things that need to be done, he doesn't specify whose taxes need to increase the most. But he makes clear that he thinks we need to cut spending on entitlements.
This campaign appears ill-founded and ill-focused. Yes, let's get Americans better informed, so that they talk more about taxes and spending and understand the long-term consequences of today's decisions. But slanting the playing field with drivel about "average taxes" and "doubling your taxes" is not the way to go about informing Americans. It's scare tactics, nothing more or less.
* re "tax freedom day": averaging total taxes paid and dividing them by the number of tax payers to figure out the "average" day that Americans have paid off "their share" of the tax burden is an exercise in arriving at a totally meaningless statistic. Joe Blow and Bill Gates can't be 'averaged' in any way that is meaningful. Yet, Walker has the gall to use that "indpendent survey" to find that the "average American's total federal state and local tax bill roughly equals his or her entire earnings from January 1 up until right before tax day" to push his anti-entitlements position.