Walker, who was introduced as a “fiscal realist and not an idealist” at a plenary panel: Solving the U.S. Debt Crisis, at CU Boulder’s annual < a href =”http://www.colorado.edu/cwa/schedule.html?year=2011″>Conference of World Affairs, argued that the deficit, if left unchecked, could be catastrophic for the United States. To reach a solution, Walker argued that both parties will have to come together to restore fiscal responsibility to the federal government.

Since stepping down from his government position in 2008, Walker has publicly campaigned to restore fiscal responsibility to the federal government.

“We need to mobilize the center-right and center-left to stop the wing nuts of the far-right and far-left from driving us off a cliff,” said Walker.

Currently, the debt stands at over $14 trillion dollars and is fast approaching the legal limit of $14.294 trillion. Congress must soon act to raise the debt ceiling if they wish to avoid defaulting on loans and the catastrophic economic ramifications that would entail.

However, according to Walker the real issue is not the current debt but the upcoming crisis of unfunded Medicare and entitlement promises, which could raise the federal debt by as much as $40 to $50 trillion.

Shifting demographics and rising health care costs are driving the crisis. By 2030, there will be a ratio of around two working Americans to support every Medicare recipient, he said.

According to Walker, neither Democrats nor Republicans have provided a feasible solution that really addresses all aspects of the looming crisis. “To reach statutory budget controls, everything must be put on the table.”

Walker says that tax reform that increases revenue and spending cuts will lead the way to salvation.

In regards to comprehensive tax reform, Walker says we must simplify the code while increasing revenue by taxing the rich and closing loopholes that disproportionately benefit corporations and wealthier Americans. He also suggested a consumption tax that would allow the government to capture revenue from individuals who wield vast sums of capital but don’t generate taxable income. Walker also suggested raising the income cap on Social Security to boost revenues.

As far as spending concerns, Walker says that we must limit and reform entitlement programs, such as Medicare, while decreasing discretionary spending, especially in the defense sector. By increasing contributions that wealthy recipients of Medicare contribute to their health coverage, Walker says we could maintain coverage for less fortunate seniors, while taking huge cuts out of the deficit. Defense spending also offers a ripe sector to cut spending according to Walker.

“We spend as much on our military as the next 14 countries combined,” said Walker. “We must reassess, what exactly are we trying to accomplish with our military?”

Walker criticized both Obama’s budget proposal, which he said does not adequately address rising Medicare costs, and Sen. Ryan’s budget proposal, which will not increase tax revenue.

With every newborn baby being born with an implicit debt of $200,000, Walker joked “no wonder babies cry when they’re born,”

However, his tone turned serious as he addressed the impact the debt will have on younger generations. “What is happening to young people is morally reprehensible.”

Sen. Jim Bunning (R-Ky.), flanked by Sens. Robert Bennett (R-Utah) and Roger Wicker (R-Miss.) (EPA/ZUMAPRESS.com)

Sen. Jim Bunning’s (R-Ky.) recent one-man stand against legislation extending unemployment benefits offered a high-profile airing of a popular GOP message: Deficit spending, in almost any form, will cause more harm than good to a fragile economy.

Standing in the way of the Republicans’ reasoning, however, has been another formidable group: budget experts. Most are urging additional, though temporary, deficit spending as the surest way to tackle the jobs crisis and prevent the economy from slipping back into recession. It hasn’t helped the GOP’s argument that a good number of them are fiscal conservatives.

[Congress1] Few observers, for example, would accuse David M. Walker of being a liberal spendthrift. Indeed, the former U.S. comptroller general has spent most of the last decade forging a personal crusade against deficit spending. Yet last week — on the same day that Bunning, a Hall of Fame baseball pitcher known more for his curveball than his economic insights, initiated his drive against fiscal imprudence — Walker wrote in Politico that “a focus on jobs now is consistent with addressing our deficit problems ahead.”

“A huge recession can yield a huge deficit,” Walker, now head of the Peter G. Peterson Foundation, which advocates for balanced budgets, wrote in an op-ed co-authored by Lawrence Mishel, president of the liberal Economic Policy Institute. “Though a concern, most of the recent short-term rise in the deficit is understandable. Furthermore, public spending can help compensate for the fall in private spending, and help stem the pain of substantial job losses.”

Mark Zandi, chief economist at Moody’s Economy.com, agrees. Zandi, an adviser to Sen. John McCain during the Arizona Republican’s 2008 run at the White House, has urged lawmakers in recent weeks “to be aggressive” in tackling the continuing jobs crisis, which has left nearly a fifth of the nation’s working population without a job or underemployed.

“If we have another recession, we will have no policy response,” Zandi told a House panel last week. “We have to err on the side of doing too much.”

The message from the experts is clear: If you think adding $10 billion to the deficit is dangerous to future economic growth, wait ‘til you see what happens when millions of unemployed folks, denied access to a government safety net, slash their consumption (at best) and foreclose on their homes (at worst).

No matter. On the issue of deficit spending to address the hovering downturn, Republican leaders in both chambers are all but united in opposition, as is much of their caucus. Thirty Republicans, for example, voted to block the Democrats’ $15 billion jobs package that passed the upper-chamber last week. More recently, 39 Republicans voted with Bunning against the Democrats’ plan to tap deficit spending to pay for a $10 billion temporary extension of COBRA benefits, funding for doctors who treat Medicare patients, federal highway programs and the filing deadline for unemployment insurance.

“If we can’t find $10 billion to pay for something that we all support, we will never pay for anything on the floor of this U.S. Senate,” Bunning said during his five-day stalling marathon. “We cannot keep adding to the debt.”

At issue is the distinction — many would say a failure to distinguish — between the long-term structural problems at the heart of the nation’s unsustainable spending curve, and the temporary measures the government has put in place in the past two years to address the worst economic downturn since the Great Depression. The Government Accountability Office summarized the long-term budget crisis Tuesday, issuing a report indicating what experts know too well: Federal spending threatens to swamp the nation’s economy, and the entitlement programs — particularly Medicare and Medicaid, which run on autopilot — are the predominant driving force, not recent stimulus measures.

“By 2030,” GAO warned, “there will be little room for ‘all other spending,’ which consists of what many think of as ‘government,’ including national defense, homeland security, investment in highways and mass transit and alternative energy sources.”

Walker and Mishel also stressed the importance of differentiating between short-term emergency spending and statutory obligations. The former, they argue, “and the resulting short-term deficits they cause, should not be confused with the primary deficit challenge facing our nation: structural deficits. These deficits are projected to exist in coming years — even when the country is at peace, even when the economy is growing, even when unemployment falls.”

Ironically for this debate, the legislation causing much greater strain than stimulus bills on the the country’s fiscal health are measures passed under the Bush administration with the blessing of GOP leaders in Congress. The Bush tax cuts, for example — if extended this year, as expected — stand to whisk hundreds of billions of dollars from the federal coffers over the next decade. And the Medicare prescription drug benefit — an unfunded entitlement expansion that Republicans rammed through Congress in 2003 — is estimated to add $550 billion to the debt by 2017.

Bruce Bartlett, a conservative economist and former advisor to Ronald Reagan, George H.W. Bush and Rep. Ron Paul (R-Texas), hasn’t overlooked the hypocrisy coming from GOP leaders who suddenly want to be recognized as champions of fiscal restraint.

“It astonishes me that a party enacting anything like the drug benefit would have the chutzpah to view itself as fiscally responsible in any sense of the term,” Bartlett wrote in Forbes recently. “As far as I am concerned, any Republican who voted for the Medicare drug benefit has no right to criticize anything the Democrats have done in terms of adding to the national debt.”

It hasn’t stopped Bunning. The Kentucky Republican, who voted for the drug benefit, warned Democrats that he plans to play fiscal monitor as the majority party moves ahead this month with its job-creating agenda.

“I’ll be watching them closely,” he said Tuesday, “and checking off the hypocrites one by one.”

“The time has come,” Rep. Spencer Bachus (R-Ala.) said this week, “to stop pretending we can spend our way out of the recession.”

Enter David M. Walker, the former U.S. comptroller general and now head of the Peter G. Peterson Foundation, which advocates for balanced budgets. Walker — teaming up with Lawrence Mishel, president of the liberal Economic Policy Institute — said this week that a temporary bump in federal spending is the solution to longer-term deficit troubles, rather than part of the problem.

“A focus on jobs now is consistent with addressing our deficit problems ahead,” Walker and Mishel wrote in Politico.

The difficulty is that many politicians and news organizations often cast deficit debates as a dichotomy: You either care about them or you don’t.

But this is rarely accurate. The fact that the two of us, who have philosophical differences on the proper role of government, find much to agree on about deficits is a testament to the importance of dropping this useless dichotomy and finally talking about deficits in a reasonable way.

The reasonable way is first to make the distinction between temporary, emergency spending designed to pull the country out of recession and auto-pilot entitlement spending that’s the true root of the nation’s long-term budget troubles.

The unlikely duo of Walker and Mishel is calling for programs that (1) target job creation specifically, (2) would build jobs quickly, and (3) wouldn’t rely on federal funds in the long run. Infrastructure funding, a hiring tax credit for businesses and an extension of unemployment benefits, they write, all meet these criteria.

The “targeted, timely and temporary” diagnosis is hardly a new one, but its reiteration now — a year after passage of the Democrats’ $787 billion stimulus bill — is good evidence that lawmakers didn’t focus enough on those parameters the first time around (as many economists have indicated).

Will lawmakers learn the lessons of the last year? Not probable in an election year when voter anger, more than economic necessity, seems likely to dictate what Congress can do.

Writing in The Washington Post yesterday, Robert Bixby, who heads the Concord Coalition, a budget watchdog group, pointed out that the request “rang a bit hollow coming from lawmakers who have no plan of their own to avoid a fiscal debacle that could be many times more serious than anything the automakers face.”

From Bixby’s op-ed piece:

Pelosi and Reid declared that the American people “deserve to see a plan that is accountable to taxpayers and that is viable for the long-term,” with “significant sacrifices and major changes to [the automakers'] way of doing business.”

These sound conditions should be applied to the federal budget as well. Unfortunately, though, there is no special guardian of future generations to make such demands. That job belongs to our elected leaders. They, too, must demonstrate significant sacrifices and major changes to their way of doing business. After all, they share responsibility for the nation’s future just as the Big Three executives share responsibility for the future of the auto industry.

Bixby makes a good point. This year the federal debt topped $10 trillion — a figure so large that New York City’s storied debt clock could no longer contain it. And the number is almost certain to leap significantly in the next few years.

Deficit spending in 2009 is expected to top $1 trillion, and there’s mumbling that it could approach $2 trillion. Most economists agree that the Keynesian approach of borrowing to pull through a recession is the right one — and President-elect Barack Obama has plenty of plans to do just that. But there’s been less talk of how Washington policymakers plan a return to balanced budgets when the economy gets better. (All that borrowing, remember, is intended to produce millions of jobs.)

It’s not the first time we’ve heard this warning about out-of-control federal spending. In the days after Congress passed its Wall Street bailout, David Walker, former U.S. comptroller general, pointed out the two significant differences between the current economic crisis and that facing the federal budget: One, the budget crisis is many-fold larger; and two, there’s no one big enough to bail out the federal government.

“My question,” Walker said at the time, “is when are they [Congress] going to start dealing with the bigger problem?”

The title of Bixby’s piece is “Congress in a Glass House.” Considering the budget mess the country is in — and considering that Congress has done little to balance its own books, even in the high-flying times of the housing boom — it is certainly apt.