Fiscal Stewardship and Defense Transformation

This speech was given by the Comptroller General before the United States Naval Academy's National Security Economics Seminar in Annapolis, MD, on March 8, 2007. The truth is our country faces not one but four interrelated deficits. Together, these deficits have serious implications for our future role in the world, our future standard of living, our future domestic tranquility, and even our future national security. The first is the federal budget deficit. Thanks to a combination of out-of-control federal spending, several major tax cuts, and expired budget controls, federal budget deficits have returned with a vengeance. Depending on which accounting method you use, the federal deficit last year ranged from $248 billion to $450 billion. The second deficit is our savings deficit. The savings rate among U.S. consumers has been falling for some time. In 2005, for the first time since 1933, the annual personal savings rate in this country reached negative territory. The savings deficit was even greater in 2006. We've returned to savings levels not seen since the depths of the Great Depression. In fact, America has among the lowest overall savings rates of any major industrialized nation. America's third deficit is our balance-of-payments deficit. America is simply spending more than it's producing. Finally, there's America's leadership deficit, which is probably the most serious and sobering of all. At both ends of Pennsylvania Avenue and on both sides of the political aisle, we need leaders who will face the facts, speak the truth, work together, and make tough choices. We also need leadership from our state capitols and city halls, from businesses, colleges and universities, charities, think tanks, the military, and the media. So far, there have been too few calls for fundamental change and shared sacrifice. Right now, some parts of the defense budget, especially military health care costs, are out of control. This simply isn't sustainable. Defense transformation can help ensure a more positive future. Beyond defense transformation, our nation needs to take steps to return us to a more prudent and sustainable fiscal path. By nature, I'm an optimist and a person of action. I don't believe in simply stating a problem. I also think it's important to state a possible way forward Citizen education and public engagement are also essential. The American people need to become more informed and involved when it comes to the problems facing our country. They also need to become more vocal in demanding change. Younger Americans like you need to speak up because you and your children will ultimately pay the price and bear the burden if today's leaders fail to act.