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| June 15, 2005 | The
Newspaper of the NYSSCPA |
Vol.
8, No.11 |
Top CPA Urges Society to ‘Speak Truth to Power’
David Walker Sounds the Deficit Alarm at Annual Dinner
By
Simon Eskow
Continued from the Home
Page
“I think we have a broken business model and nothing less than the future of our children and grandchildren is at stake,” David Walker, Comptroller General of the United States, told members of the New York State Society of CPAs.
Walker said CPAs can use their historic place in society to educate people on the need for serious reform of a nation that is carrying an accumulated debt of $43 trillion.
“It’s important that CPAs get involved,” Walker said. “We have to remember that the ‘P’ stands for ‘public.’ We hold the public’s trust. If anyone speaks truth to power, it’s us.”
Walker, the keynote speaker at the Society’s 108th Annual Election Meeting and Dinner on May 18, said that while financial statements show that the U.S. has run up $7.4 trillion in debt up to 2004, the actual figure for unfunded liabilities and obligations is about $43 trillion, while the net worth of the entire country is around $48.5 trillion. These obligations will grow as demographic changes sends baby-boomers into retirement, and the cost of healthcare rises.
“Our financial condition is worse than advertised,” he said. “You’d flunk in math if you think we’ll grow our way out of this.”
These conditions call for America to take a hard look at tax policy, social policy and entitlements, and re-examine the entire base of the federal government, which includes an increasing number of programs and policies that become inculcated in government spending, and more difficult to dismantle, and placing further onus to begin reforming as soon as possible.
“The sooner we get started the better, because the miracle of compound interest is working against us,” Walker said. “This isn’t widely known; this message has to get out because we can’t solve the problem until a message is sent to say we have to deal with it. The longer we wait, the more difficult it will be.”
Programs running on “automatic” have consumed more and more of government spending over the last 40 years. In 1964, 66 percent of the budget was discretionary spending and the rest for mandatory programs. Discretionary spending in 2004 was 39 percent of the budget, meaning almost 60 percent of our money is spent on mandatory programs. Meanwhile, the government keeps itself running by eroding trusts.
“We spend every dime of Social Security surplus and other trust funds on other operating expenses and replace them with IOUs from the government that have no economic significance,” Walker said. “In the financial statements, you won’t find anything about this.”
Professionals can become involved by writing articles, speaking about deficits in the press and capitalizing on the CPA’s public trust, Walker said.
New President, Board
New President Stephen Langowski echoed some of Walker’s thoughts when he called the NYSSCPA the “thought leaders and the conscience of the profession” in his inaugural speech.
Langowski told the scores of CPAs gathered for the meeting that in the coming year, the NYSSCPA should review its strategic plan, increase cooperation with other organizations and enhance the membership by reaching out to members in industry, women and minorities.
“We have a 95 percent retention rate,” Langowski said. “But our membership can grow.”
