| WASHINGTON -(Dow Jones)- The current federal budget deficit
isn't the result of the war with Iraq and the recession, as maintained by
President George W. Bush, U.S. Comptroller General David M. Walker said
Tuesday.
Walker said the deficit is a result of a structural imbalance between
federal revenues and federal liabilities and a harbinger of deeper
troubles to come. Walker is head of the General Accounting Office and is
the federal government's highest-ranking auditor.
"We have a serious problem," said Walker, speaking at an American
Institute of Certified Public Accountants meeting in Washington.
Bush has said the fiscal 2003 deficit of $374 billion and the nearly
$500 billion deficit projected for 2004 are the direct result of the
recession and the nation's war with Iraq.
Walker said Tuesday, "We haven't been in recession since November
2001." And, the wars with Iraq and Afghanistan plus extra federal funding
for homeland security account for just 25% of the federal budget
deficit.
"Just look at the facts," Walker said.
Speaking to a reporter after his speech, Walker also warned against
those optimistically predicting that a booming economy will solve the
nation's fiscal crisis.
"The hole is too deep to grow your way out of this problem," he
said.
The current federal debt, coupled with the future value of the nation's
projected liabilities to veterans, retirees and other entitlement programs
add to "tens of trillions of dollars," Walker said.
If the value of the nation's federal liabilities for the next 75 years
was calculated, it would amount to $150,000 for "every man, woman and
child," Walker said. "And there's no paying this off with your credit
card."
Walker is known for being outspoken and, while appointed by
then-President Bill Clinton, has taken positions unpopular with both
Democrats and Republicans at various times.
"My job is to speak truth to power," Walker said.
While Wall Street analysts generally agree with Walker's assessment,
and while some investors appear concerned, interest rates so far haven't
been affected.
-By John Godfrey, Dow Jones Newswires; 202-862-6601;
[EMAIL PROTECTED] Dow Jones Newswires
12-16-03 1605ET
Copyright 2003 Dow Jones & Company, Inc. All Rights Reserved.
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