ifac annual council seminar november 17, 2009 david m. walker president and ceo
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-. IFAC Annual Council Seminar November 17, 2009 David M. Walker President and CEO The Peter G. Peterson Foundation and Former Comptroller General of the United States. Composition of Federal Spending. 1969. 1989. 2009. Social Security. Medicare & Medicaid. Defense. Interest. - PowerPoint PPT PresentationTRANSCRIPT
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IFAC Annual Council Seminar
November 17, 2009
David M. WalkerPresident and CEO
The Peter G. Peterson Foundationand
Former Comptroller General of the United States
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1969 1989 2009
Source: PGPF analysis of Office of Management and Budget data.
Composition of Federal SpendingComposition of Federal Spending
Defense Social Security Medicare & Medicaid
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Interest All Other Spending
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1969 1989 2009
Source: PGPF analysis of Office of Management and Budget data.
Federal Spending for Mandatory and Federal Spending for Mandatory and Discretionary ProgramsDiscretionary Programs
Net Interest Discretionary Mandatory
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Major Fiscal Exposures($ trillions)
2000 2008
Explicit liabilities $6.9 $12.2 Publicly held debt Military & civilian pensions & retiree
health Other
Commitments & contingencies 0.5 1.3 E.g., PBGC, undelivered orders
Implicit exposures 13.0 42.9 Future Social Security benefits 3.8 6.6
Future Medicare Part A benefits 2.7 12.7
Future Medicare Part B benefits 6.5 15.7
Future Medicare Part D benefits -- 7.9
Total $20.4 $56.4Source: PGPF analysis of 2000 and 2008 Financial Report of the United States Government.Note: Estimates for Social Security and Medicare are at present value as of January 1 of each year and all other data are as of September 30. 2009 Social Security and Medicare Trustees’ reports show implicit exposures totaling $45.8 trillion
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$56.4
Trillion
=
BURDEN per
BURDEN per
CAPITA
CAPITA
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Potential Fiscal Outcomes Potential Fiscal Outcomes Under Alternative Simulation Under Alternative Simulation
Revenues and Composition of Spending as a Share of GDPRevenues and Composition of Spending as a Share of GDP
Revenue
Source: GAO Fall 2009 analysis.
Percent of GDP
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Common DenominatorsCommon Denominators
The parallels between our current financial crisis and the federal government’s finances:
–Disconnect between those who benefit and those who pay the price
–Inadequate transparency regarding the nature and magnitude of risks
–Too much leverage, not enough focus on cash flow,and over-reliance on credit ratings
–Failure of normal oversight and risk management mechanisms
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The Way Forward
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