Presentation:
The Honorable David M. Walker
Mr. Walker addressing the Rotary Club of Avon-Canton
Past President Rollie Sterrett introduced the Honorable David M. Walker, a former Comptroller General of the United States, as well as head of the Government Accountability Office (GAO) for over 10 years, working under the Reagan, Bush 41 and Clinton administrations. Characterized by National Press & Cable Business News as "the Paul Revere on the unsustainable fiscal outlook for our country" Mr. Walker is the authority on addressing fiscal challenges that lie ahead for America, and Connecticut, and what we must do about them
Today, Mr. Walker serves as the first Senior Strategic Advisor for the Global Public Sector Practice at PricewaterhouseCoopers. He also serves on the Board of Directors of AARP, and is an inductee in the International Accounting Hall of Fame. (Who knew there was such a place?!) Mr. Walker is a member of the Bridgeport Rotary Club.
What follows is a summary and paraphrasing of Mr. Walker's comments, as well as some answers to questions posed to him by Rotarians present. A Powerpoint of Mr. Walker's presentation is located here:
www.rotaryclubofavon-canton.info/documents/DavidWalker-to-AvonRotaryClub-July29-2016.pptx
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Mr. Walker opened his comments with: "The financial condition and outlook for the United States, Connecticut and Connecticut's cities pose serious challenges, but they can be solved." He went on to say that our bigger problem is our "leadership deficit", and that is challenge #1. He characterized his belief that what matters most is not the size of the debt or the deficit but debt as a percentage of the Gross Domestic Product (GDP), in other words, our ability to pay.
He opined that the three biggest financial mistakes our country has made in recent decades occurred in 2003 and included: 1) tax cuts we could not afford, 2) the invasion of Iraq and 3) passage of the Medicare Prescription Drug Mandate, in particular because Medicare was already insolvent before that legislation passed.
He continued, indicating that our goal ought to be to reduce debt as a percentage of the economy to </= 60% by 2035 (Debt/GDP). Currently our state ranks 47th in the nation by this standard and has a 69% Debt/GDP ratio. Despite frequent characterization of our state as "wealthy" we cannot govern our way out of the problem. Instead we need to grow the GDP. As things stand, "we've lost our way."
Nationally 68 - 70% of Americans believe the country is headed in the wrong direction. Closer to home, 49% of Nutmeggers say they would leave Connecticut if they could.
A Rotarian himself, Mr. Walker characterized Rotary's 4-way test as a good framework with which to seek solutions, and went on to use the tenets of the 4-way-test to describe the habits and qualities of the type of leaders required to achieve those solutions. These are nicely portrayed in the linked Powerpoint: www.rotaryclubofavon-canton.info/documents/DavidWalker-to-AvonRotaryClub-July29-2016.pptx
In 2012, Mr. Walker traveled over 2000 miles through 27 states talking to people everywhere. 97% agreed the country has serious problems. 92% agreed on 6 principles which would correct our course, 92% agreed on the desired goals and 85% agreed we must decrease our spending to match our revenue. The desirable benchmark is to decrease spending 3x for every new expenditure agreed to.
Mr. Walker believes our leaders are fundamentally flawed, products of a system which relies on central planning without engaging ordinary people. We suffer from too much partisanship and a great ideological divide. Leaders should be out front, speaking directly to the people whereas today's politicians speak to each other and to interest groups.
Connecticut today is in last place, having reached this situation after 25 - 30 years of poor leadership. We are the 2nd most regulated state, and among the most business unfriendly states, by reputation. Our welfare benefits are overly generous and costly. Our welfare and pension benefits are unfunded and we overpay state employees by 40%. We are among the top states in interest paid on debt.
In response to questions, Mr. Walker added that the quality and effectiveness of our leadership is hampered, and its irresponsibility enabled, by the lack of term limits, no law forbidding convicted felons from serving in government, no statute allowing recall of politicians, no mandatory property tax caps and no statute providing for a citizen's right to legislative initiatives or referendums.
He continued that we must pursue solutions that are fact-based, non-partisan and non-ideological. We must "make the first three words of the Constitution come alive: We The People....." "We cannot get the job done with the same people leading us as we have now."
Connecticut state retirees unfunded health care obligations are 22.6 billion dollars and our unfunded pension obligations are 25.3 billion dollars. Our cities are decaying. This situation can no longer continue nor can it be ignored. The sad truth is, this state has long been run by politicians controlled by government union labor leaders which have had a stranglehold on the Democratic leadership in our legislature.
In closing Mr. Walker listed the 6 principles that 92% of Americans he previously interviewed agreed are key. These were:
1. We must be pro-growth.
2. Our measures must be socially equitable. The safety net must exist, but without disincentives for work.
3. Our measures must be culturally acceptable. There must be a known limit on taxation.
4. The four-letter word "Math" must be as true in politics as it is in real life.
5. Our measures must be politically feasible. In the House we need a majority and in the Senate, 60%.
6. Our measures must attract meaningful bipartisan support. If they are passed without bipartisan support, they will be divisive and unsustainable.
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