David Walker’s move from GAO to the Peter G. Peterson Foundation

I’m as fiscally conservative as they come. So, I’d usually support someone who has warned us that

at both ends of Pennsylvania Avenue and on both sides of the political aisle, there are too few leaders who face the facts.

That someone is David Walker, who retired on Wednesday from the GAO. But something raised a flag as I read about Walker’s departure in David S. Broder’s March 16 Washington Post column, “New Task for a Budget Straight-Talker.” Broder quotes Walker as saying that he is leaving to lead the Peter G. Peterson Foundation which will emphasize advocacy in the business community and among the young, because others already have done

a lot of the basic research and analysis [and] the people are ahead of the politicians…but they don’t know what we need to do.

I looked up the website for the foundation. This portion of the mission statement caught my interest:

Unsustainable entitlement benefits. As 78 million baby boomers retire, America’s unfunded entitlement promises (i.e., Medicare and Social Security) exceed three times the annual GDP of the country.

I’m not an economist, but the first thing that strikes me is that the foundation is conflating Medicare and Social Security. In the February 15 New York Time’s account of the foundation’s formation, “Tax Break Helps a Crusader for Deficit Discipline,” author Landon Thomas Jr. completely omits Medicare in this description:

On Friday, Mr. Peterson will unveil the Peter G. Peterson Foundation and announce his plan to allocate his newfound billions to projects that will increase public awareness of fiscal imbalances, Social Security deficits and nuclear proliferation.

Also, it’s interesting that Mr. Peterson favors the tax breaks for hedge funds, at least according to Landon:

And while he supports increased taxes on the wealthy (along with broad-based benefit reductions), he remains firm in his defense of the special provision for private equity partnerships despite the view of many on Wall Street, including the billionaire investor Warren Buffett, that the rate is too low.

“This is a fairness argument,” said Mr. Peterson, who says that increasing the 15 percent rate for so-called carried interest, compared with ordinary tax rates of roughly double that, would force private equity companies overseas. “There are so many other partnerships, why pick on this high-growth sector?”

According to Landon, Peterson is considering using his considerable wealth to organize

a youthful equivalent to the powerful lobbying group for senior citizens, AARP. Another is working with HBO on a documentary film adaptation of his book “Running on Empty,” in the hope that the American public wakes up to the dangers of deficits and entitlement spending as it did to global warming after Al Gore’s film “An Inconvenient Truth.”

So, here are my questions:
  • Are the figures cited in the mission statement true?
  • If true, how much can be apportioned to each program?
  • Are Medicare costs rising more quickly than inflation?
  • How does the rate of increase compare with private health insurance?
  • How much of the increase is caused by the prescription drug benefit?
  • How much could growth be curbed by allowing negotiated prices currently banned?
  • How much of public v.s. private insurance costs go to administration v.s payments for health care?
  • Does this point to a problem that arguably could be addressed, at least in part, by single payer health care, ironically (for Mr. Peterson) creating a new “entitlement?”
  • When did the language shift from benefit to entitlement?
I’ve written Robert Greenstein (email) , Executive Director of the Center on Budget and Policy Priorities, asking for his sense of things. If I hear back, I’ll share his answers with you. I’m of a mind that there needs to be a reasoned, fact-filled response to the p.r. the foundation will soon be disseminating to business, but especially youth, on possible solutions. You’ve hear the word “class warfare.” It seems to me that Mr. Peterson is about to invoke “age warfare” to promote his aims.

The foundation’s only contact at this point is a NYC publicist, Robert Lawson of Rubenstein Communications (email), but I’ll contact hime, too, and see if he will put me in touch with Mr. Walker.

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2 Responses to “David Walker’s move from GAO to the Peter G. Peterson Foundation”

  1. Rational Rabbit Says:

    Why do you go to all the trouble to write a blog and then make it hard to read?If you want people to read this, then make it readable. Dark backgrounds do not go well with dark text (since you obviously hadn’t noticed)You should also be aware that there are a multitude of monitors and settings out there in the real world.

  2. Rational Rabbit Says:

    Did you change the color or is it a blogger.com thing?Looks much better now!

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