Jan. 13, 2010
BOOK REVIEW: David Walker, Who Reorganized the GAO, Offers Suggestions for Fixing Nation's Fiscal, Political Mess in 'Comeback America'
Reviewed By David M. Kinchen
Huntingtonnews.net Book Critic
We should avoid ungenerously throwing upon posterity the burdens that we ourselves ought to bear -- George Washington
I've read and reviewed many books about fixing America's dysfunctional economy, including excellent ones by Rep. Ron Paul, R-TX ("End The Fed") and Steven Greenhouse ("The Big Squeeze"), but for all round comprehensiveness in a relatively small package, David M. Walker's "Comeback America: Turning the Country Around and Restoring Fiscal Responsibility" (Random House, 240 pages, NO INDEX!, $26.00) is difficult to top.
Walker, president and CEO of the Peter G. Peterson Foundation, was comptroller general of the U.S. from 1998 to 2008 and CEO of the Government Accountability Office (GAO) during the same period. He describes how he led the reorganization of the GAO, which changed its name from its original designation of General Accounting Office during his watch -- in 2004, to be precise -- keeping its well known initials, but redefining its goals. The GAO was founded in 1921 and is a non-partisan part of the legislative branch of the government.
An accountant by profession -- he worked for Arthur Andersen before being tapped by President Bill Clinton to be the nation's seventh comptroller general and before his Chicago-based accounting giant was destroyed in the Enron scandal -- Walker was one of the lone voices crying inside the Beltway wilderness for fiscal responsibility at the start of the Bush 43 administration.
Walker warned Congress and the administration as the federal surplus of the Clinton administration became a giant deficit under George W. Bush. He marvels at the disconnect of how Republicans are viewed as being fiscally responsible -- an attribute he assigns to Bush 41 -- while Democrats are seen as spendthrifts.
Walker says that Clinton was fiscally responsible, but he doubts that President Obama will follow in Bubba's footsteps, based on the performance of his first year in office. More likely than not, with the budget busting health care "reform", Obama seems to be continuing Bush 43's bad habits, aided and abetted by Congress.
At the GAO -- as he describes its reorganization on pages 170 to 179 -- Walker instituted reforms and created what business calls a mission statement. Walker focused on three words to redefine the agency: Accountability, Integrity, Reliability. This reminds me of another brand dating from about the same era as the GAO --the FBI -- which uses Fidelity, Bravery and Integrity as part of its branding.
The reorganization of the GAO wasn't without controversy: " On September 19, 2007," according to Wikipedia, "GAO analysts voted by a margin of two to one (897–445), in a 75% turnout, to establish the first union in GAO's 86-year history. The analysts voted to affiliate with the International Federation of Professional and Technical Engineers (IFPTE), a member union of the AFL-CIO. There are more than 1,800 analysts in the GAO analysts bargaining unit; the local voted to name itself IFPTE Local 1921, in honor of the date of GAO's establishment. On February 14, 2008, the GAO analysts' union approved its first-ever negotiated pay contract with management; of just over 1,200 votes, 98 percent were in favor of the contract."
Walker believes that by 2030 -- if significant reforms to current government programs and policies aren't made -- federal taxes could double from current levels, meaning less money and poorer education for kids--which will hurt families along with our nation's economic strength and position in the world.
Reforms must be made in every sector of the government, including raising the retirement age for Social Security, the so-called "Third Rail" of reform. He proposes raising the eligibility age, which was set at 65 because that's the age Germans used when they established the first social security system in the 19th Century. Walker would also raise the amount of wages and self-employment earnings subject to the Social Security tax to say, $150,000. He would also require supplemental savings accounts, arguing that President Roosevelt in his 1935 Social Security Act legislation never intended the program to be the primary source of retirement income, which it currently is for many retirees.
Walker also wants a total reform of the Pentagon, which has been astonishingly profligate in developing weapons systems of dubious use, with each branch of the service calling for systems unique to their service. We need to reform the pay scale, mandating higher pay for a combat soldier than his out-of-harm's way supporting colleague. In short, a thorough reform of the defense budget is needed in light of our horrific budget deficits.
Health care reform would also, under Walker's eagle-eyed accountant's reform, be subject -- like European systems -- to limits as to what the federal government should spend each year. In other words, no unfunded mandates! What a plan! Maybe we ought to elect an accountant President, instead of all those lawyers who've had the job. (Twenty-six of our 44 Presidents were lawyers, he says, and in the 111th Congress that convened in early 2009, 54 percent of the senators and 36 percent of the House members were lawyers).
Tax reform is high on the list of radical changes Walker would make. He wants the Alternative Minimum Tax eliminated or applied only to the nation's richest taxpayers, as it was originally intended. The AMT affects middle-class taxpayers now because it never was indexed to inflation when it was created in 1969 and put into place the next year. Walker also suggests adopting a Value Added Tax, widely used in Europe and much of the world (more than 100 nations have adopted this consumption tax, he says). A VAT would encourage saving and discourage conspicuous consumption, Walker adds.
On the political front, Walker's reforms would include term limits -- widely used in state and local governments -- for Congress. He suggests electing members of the House of Representatives to four-year terms, instead of the current two-year ones which mandate 24/7 re-election efforts. He would limit the tenure of representatives and senators to 12-18 years and he even suggests electing Presidents to a single six- or eight-year term.
Walker says that some of these changes might even require a Constitutional Convention, the ultimate "Third Rail," feared by many. The fear is exaggerated, he says, because there would be limits to what would be changed.
To sum up, Walker's "Comeback America" shows how we can return to our founding principles of fiscal responsibility and stewardship for future generations, if only we decide to do so. It won't be done on autopilot -- it will require action by everybody, starting with personal financial responsibility.
The book had many "lightbulb" moments for me, including the section where CPA Walker describes how he prepares his own taxes -- except one year when it was too complicated for him! If even one year is too complicated for an experienced CPA, the tax system should be made as simple as it is in most of the world.
Speaking of other people who don't do their own taxes -- like a congressman Walker challenged to follow his example (the congressman wisely declined to accept the challenge) -- how about IRS Commissioner Douglas Shulman, who told an interviewer on C-SPAN's "Newsmakers" program that aired Sunday, Jan. 10, (link: http://thehill.com/blogs/blog-briefing-room/news/75119-irs-commissioner-doesnt-file-his-own-taxes) that he doesn't prepare his own taxes in part because he believes the tax code is too complex.
Shulman said he uses a tax preparer for his own returns. "I've used one for years. I find it convenient. I find the tax code complex so I use a preparer," Shulman said. Pressed on how he would make the tax code simpler, Shulman responded, "I don't write the tax laws. Congress writes the tax laws so that's a whole different discussion."
Walker's web site: www.comebackamericathebook.com
Publisher's web site: www.randomhouse.com
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BOOK REVIEW: David Walker, Who Reorganized the GAO, Offers Suggestions for Fixing Nation's Fiscal, Political Mess in 'Comeback America'
Reviewed By David M. Kinchen
Huntingtonnews.net Book Critic
We should avoid ungenerously throwing upon posterity the burdens that we ourselves ought to bear -- George Washington
I've read and reviewed many books about fixing America's dysfunctional economy, including excellent ones by Rep. Ron Paul, R-TX ("End The Fed") and Steven Greenhouse ("The Big Squeeze"), but for all round comprehensiveness in a relatively small package, David M. Walker's "Comeback America: Turning the Country Around and Restoring Fiscal Responsibility" (Random House, 240 pages, NO INDEX!, $26.00) is difficult to top.
Walker, president and CEO of the Peter G. Peterson Foundation, was comptroller general of the U.S. from 1998 to 2008 and CEO of the Government Accountability Office (GAO) during the same period. He describes how he led the reorganization of the GAO, which changed its name from its original designation of General Accounting Office during his watch -- in 2004, to be precise -- keeping its well known initials, but redefining its goals. The GAO was founded in 1921 and is a non-partisan part of the legislative branch of the government.
An accountant by profession -- he worked for Arthur Andersen before being tapped by President Bill Clinton to be the nation's seventh comptroller general and before his Chicago-based accounting giant was destroyed in the Enron scandal -- Walker was one of the lone voices crying inside the Beltway wilderness for fiscal responsibility at the start of the Bush 43 administration.
Walker warned Congress and the administration as the federal surplus of the Clinton administration became a giant deficit under George W. Bush. He marvels at the disconnect of how Republicans are viewed as being fiscally responsible -- an attribute he assigns to Bush 41 -- while Democrats are seen as spendthrifts.
Walker says that Clinton was fiscally responsible, but he doubts that President Obama will follow in Bubba's footsteps, based on the performance of his first year in office. More likely than not, with the budget busting health care "reform", Obama seems to be continuing Bush 43's bad habits, aided and abetted by Congress.
At the GAO -- as he describes its reorganization on pages 170 to 179 -- Walker instituted reforms and created what business calls a mission statement. Walker focused on three words to redefine the agency: Accountability, Integrity, Reliability. This reminds me of another brand dating from about the same era as the GAO --the FBI -- which uses Fidelity, Bravery and Integrity as part of its branding.
The reorganization of the GAO wasn't without controversy: " On September 19, 2007," according to Wikipedia, "GAO analysts voted by a margin of two to one (897–445), in a 75% turnout, to establish the first union in GAO's 86-year history. The analysts voted to affiliate with the International Federation of Professional and Technical Engineers (IFPTE), a member union of the AFL-CIO. There are more than 1,800 analysts in the GAO analysts bargaining unit; the local voted to name itself IFPTE Local 1921, in honor of the date of GAO's establishment. On February 14, 2008, the GAO analysts' union approved its first-ever negotiated pay contract with management; of just over 1,200 votes, 98 percent were in favor of the contract."
Walker believes that by 2030 -- if significant reforms to current government programs and policies aren't made -- federal taxes could double from current levels, meaning less money and poorer education for kids--which will hurt families along with our nation's economic strength and position in the world.
Reforms must be made in every sector of the government, including raising the retirement age for Social Security, the so-called "Third Rail" of reform. He proposes raising the eligibility age, which was set at 65 because that's the age Germans used when they established the first social security system in the 19th Century. Walker would also raise the amount of wages and self-employment earnings subject to the Social Security tax to say, $150,000. He would also require supplemental savings accounts, arguing that President Roosevelt in his 1935 Social Security Act legislation never intended the program to be the primary source of retirement income, which it currently is for many retirees.
Walker also wants a total reform of the Pentagon, which has been astonishingly profligate in developing weapons systems of dubious use, with each branch of the service calling for systems unique to their service. We need to reform the pay scale, mandating higher pay for a combat soldier than his out-of-harm's way supporting colleague. In short, a thorough reform of the defense budget is needed in light of our horrific budget deficits.
Health care reform would also, under Walker's eagle-eyed accountant's reform, be subject -- like European systems -- to limits as to what the federal government should spend each year. In other words, no unfunded mandates! What a plan! Maybe we ought to elect an accountant President, instead of all those lawyers who've had the job. (Twenty-six of our 44 Presidents were lawyers, he says, and in the 111th Congress that convened in early 2009, 54 percent of the senators and 36 percent of the House members were lawyers).
Tax reform is high on the list of radical changes Walker would make. He wants the Alternative Minimum Tax eliminated or applied only to the nation's richest taxpayers, as it was originally intended. The AMT affects middle-class taxpayers now because it never was indexed to inflation when it was created in 1969 and put into place the next year. Walker also suggests adopting a Value Added Tax, widely used in Europe and much of the world (more than 100 nations have adopted this consumption tax, he says). A VAT would encourage saving and discourage conspicuous consumption, Walker adds.
On the political front, Walker's reforms would include term limits -- widely used in state and local governments -- for Congress. He suggests electing members of the House of Representatives to four-year terms, instead of the current two-year ones which mandate 24/7 re-election efforts. He would limit the tenure of representatives and senators to 12-18 years and he even suggests electing Presidents to a single six- or eight-year term.
Walker says that some of these changes might even require a Constitutional Convention, the ultimate "Third Rail," feared by many. The fear is exaggerated, he says, because there would be limits to what would be changed.
To sum up, Walker's "Comeback America" shows how we can return to our founding principles of fiscal responsibility and stewardship for future generations, if only we decide to do so. It won't be done on autopilot -- it will require action by everybody, starting with personal financial responsibility.
The book had many "lightbulb" moments for me, including the section where CPA Walker describes how he prepares his own taxes -- except one year when it was too complicated for him! If even one year is too complicated for an experienced CPA, the tax system should be made as simple as it is in most of the world.
Speaking of other people who don't do their own taxes -- like a congressman Walker challenged to follow his example (the congressman wisely declined to accept the challenge) -- how about IRS Commissioner Douglas Shulman, who told an interviewer on C-SPAN's "Newsmakers" program that aired Sunday, Jan. 10, (link: http://thehill.com/blogs/blog-briefing-room/news/75119-irs-commissioner-doesnt-file-his-own-taxes) that he doesn't prepare his own taxes in part because he believes the tax code is too complex.
Shulman said he uses a tax preparer for his own returns. "I've used one for years. I find it convenient. I find the tax code complex so I use a preparer," Shulman said. Pressed on how he would make the tax code simpler, Shulman responded, "I don't write the tax laws. Congress writes the tax laws so that's a whole different discussion."
Walker's web site: www.comebackamericathebook.com
Publisher's web site: www.randomhouse.com
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