U.S. Fiscal Challenges and Tax Reform

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July 26 (Bloomberg) -- Former U.S. Comptroller General David Walker discusses tax reform and U.S. Fiscal challenges with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

Telling the truth about the nation's fiscal challenges.

Why not?

What, in your opinion, are those challenges?

It's the way that they keep score.

The furthest they look out is 10 years.

The real challenges that we face are a country are beyond that 10 year time due to known demographic trends and rising healthcare costs.

When you look at what is on and off the balance sheet, the challenge is about $73 trillion and growing about $7 million per minute.

We are mortgaging our future which is as fickle -- unethical and immoral.

Is that what a generational accounting analysis is?

Doesn't give a more accurate picture of what's coming down the road?

Yes.

It says, don't just look at one year or 10 years, look long- term.

Understand that the implications of our present path and what it would be on tax burdens for younger people and future generations and/or dramatic amtrak tony and reductions in the social insurance safety net going forward.

It is designed to try to help present the truth, the whole truth, nothing but the truth and try to accelerate action so that we can get the power of compounding working for us rather than against us.

You have come out in support of the inform act, the intergenerational obligations and form act that would increase transparency and accountability in the federal budget system.

How would it change the way the budget process is conducted?

It would require the office of management and budget and the congressional budget office to look at the longer-term implications of the current audit path and to translate those into what the effect of tax burden would be or the effected significant reduction in government spending and the social safety net programs over time.

You would be able to translate each huge trillions of dollars of numbers in the something that is more realistic for people to be able to understand.

David, how does comprehensive tax reform factor into all of this?

Market, there is no question we need comprehensive tax reform to make the system simpler, fairer, and generate more revenues.

There's lots of ways to do it.

We need more people paying something under a more progressive tax system.

We need to recognize the united states is not an island.

It's part of a global economy.

We need to be more competitive in that regard.

It recognizes that 90% of individuals ought to be able to prepare their own tax return or else it's not simple enough.

In order to get more revenues out of tax reform, you're going to have to couple it with social insurance, and another round of healthcare, and other spending reforms because otherwise you will never get agreement and the congress.

David, speaking of congress, with the partisan splits that continue to go on, do you have any hope that this will come to pass?

Some agreement can be reached?

The most we can hope for is part of either a budget deal or the debt ceiling deal that they would agree on a target for getting debt to gdp down to a certain level, let's say 60% within 15 years and they might agree on a revenue target, a spending reduction target to get there.

They would give instructions to the committee to try to hit that over the next year or so.

I would like to see that.

I don't think it will happen.

Therefore, we're probably going to to have to focus on process reforms like no budget, no pay, and a government transformation

This text has been automatically generated. It may not be 100% accurate.

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