Walker Makes Plea to CFOs

The former U.S. comptroller general asks finance executives to get more involved in America's finances and save the country from a fiscal meltdown.
Sarah JohnsonOctober 17, 2008

David M. Walker, the former U.S. comptroller general, is asking CFOs to help the federal government dig itself out of its $50 trillion deficit. On Thursday, at the CFO Rising West conference in Las Vegas, Walker suggested that the expertise and influence of corporate finance chiefs could prevent the government from one day facing the same type of financial turmoil currently plaguing the private sector.

Finance executives have a “disproportionate responsibility” for bringing their insights to Washington, whose financial system is badly broken and on the verge of falling apart, said Walker. CFOs should make federal officials aware of the tough choices they should be making because “they won’t do it on their own,” he added.

Federal officials could benefit from taking their cue from CFOs, the type of executives known for being proactive and constantly looking for ways to mitigate and manage risk, Walker implied. As it is, “laggard leadership” has contributed to the government’s overleveraged finances, lack of foresight and oversight, and wasteful spending.

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Walker left the U.S. Government Accountability Office earlier this year — after spending nearly a decade with the agency — to work in the private sector and spread the word about the government’s “fiscal cancer.” As CEO of the Peter G. Peterson Foundation, Walker is trying to encourage U.S. citizens to demand that the country modernize its financial systems, pare down its debt, plan better, and move beyond the “status quo.”

It’s no secret that the current U.S. financial system is poorly organized. In fact, year after year, several agencies have not received a clean audit from the GAO. “You’d be hard-pressed to say who is the chief financial officer of the United States, which is part of the problem,” said Walker.

Furthermore, the United States has been running on fumes — borrowed fumes. “We have to rely on others to finance our needs,” lamented Walker, talking about how foreign investors own half of America’s debt. “We’re mortgaging the future of the country and our children and our grandchildren, and we’re not investing in the future.”

Walker predicted that if the United States does not make reforms to Social Security and health-care programs and improve spending habits, then a “meltdown” will occur by 2020. The economy is not going to grow fast enough to overcome the federal financial problems, he said. That would require the unlikely scenario of real GDP growth for several decades at double-digit rates, he asserted.