Contents


Introduction from the 1


Comptroller General of 


the United States


Section 1 4


Today’s Fiscal Policy Is Unsustainable 5
 The Long-Term Fiscal When Will the Long-Term Fiscal Challenge Begin to Have Impact? 9


Challenge and How the Health Care Is the Largest and Perhaps Most Difficult Part of the 


Public Perceives It Long-Term Fiscal Challenge 12


For the Public, the Long-Term Fiscal Challenge Is an Issue, but Not


the Issue 14


Section 2


How Can We Change 


the Conversation 


About the Long-Term 


Fiscal Challenge?


16 

Media Presentations on the Long-Term Fiscal Challenge Need to 

“Make the Intangible Tangible” 16 

Formal Education Can Play Various Roles in Helping to Elevate 

Public Understanding 19 

Public Engagement Offers One Approach to Elevating Public 

Understanding of the Long-Term Fiscal Challenge 21 

The Role of Leaders in Changing the Conversation and Addressing 

the Long-Term Fiscal Challenge 26


Leadership Will Be Needed in Many Sectors of Society 26


Budget Process Can Enable Leaders to Make Hard Choices 28


Section 3


The Way Forward: A 


Process Needs to Be 


Put in Place to Address 


the Long-Term Fiscal


Challenge


Appendixes 

Appendix I: Forum Agenda 37


Appendix II: Forum Participants 39


Page i GAO-05-282SP CG Forum 

35 
Contents 

Appendix III: The Nation’s Growing Fiscal Imbalance: “Saving Our 

Future” 45 

Appendix IV: National Saving, the Federal Budget, and the Current 

Account Deficit 55 

Appendix V: The Long-Term Fiscal Challenge = A Long-Term Public 

Opinion Challenge 57 

Appendix VI: Rethinking Public Engagement and Countering Mistrust 73 

Figures Figure 1: Composition of Spending as a Share of GDP under 

Baseline Extended 8 

Figure 2: Discretionary Spending Grows with the Economy and All 

Expiring Tax Provisions Are Extended 9 

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Page ii GAO-05-282SP CG Forum 
Introduction from the Comptroller General of 

the United States 

In my role as lead partner on the audit of the U.S. government’s 

consolidated financial statements and the de-facto Chief Accountability 

Officer of the United States Government, I have become increasingly 

concerned about the state of our nation’s finances. In speeches and 

presentations over the past several years, I have called attention to our 

large and growing long-term fiscal challenge and the risks it poses to our 

nation’s future. 

Simply put, our nation’s fiscal policy is on an unsustainable course. As 

long-term budget simulations by GAO, the Congressional Budget Office 

(CBO), and others show, over the long term we face a large and growing 

structural deficit due primarily to known demographic trends and rising 

health care costs. Continuing on this unsustainable fiscal path will 

gradually erode, if not suddenly damage, our economy, our standard of 

living, and ultimately our national security. Our current path also will 

increasingly constrain our ability to address emerging and unexpected 

budgetary needs. 

Regardless of the assumptions used, all simulations indicate that the 

problem is too big to be solved by economic growth alone or by making 

modest changes to existing spending and tax policies. Nothing less than a 

fundamental reexamination of all major existing spending and tax policies 

and of priorities is needed. This reexamination should also involve a 

national discussion about what Americans want from their government and 

how much they are willing to pay for those things. This discussion will not 

be easy, but it must take place. 

Within the community of those concerned with the long-term fiscal 

challenge, a broad and bipartisan recognition exists that it should be 

addressed sooner rather than later. Within just the last 18 months, there 

have been increased efforts to call attention to the nature and importance 

of the challenge. For example, I spoke about this at the National Press 

Club in September 2003.1

 In December 2003 CBO issued a report detailing 

the results of its long-term budget simulations.

2 In addition, GAO continues 

to issue updates of its long-term budget simulations three times per year. 

1 Truth and Transparency: The Federal Government’s Financial Condition and Fiscal 

Outlook, by the Honorable David M. Walker, Comptroller General of the United States, 

Sept. 17, 2003, at the National Press Club. 

2

 Congressional Budget Office, The Long-Term Budget Outlook (Washington, D.C.: 

December 2003). 

Page 1 GAO-05-282SP CG Forum 
Introduction from the Comptroller General 

of the United States 

Furthermore, organizations ranging across the political spectrum— 

including the Brookings Institution, the Cato Institute, the Center on 

Budget and Policy Priorities, the Committee on Economic Development, 

the Committee for a Responsible Federal Budget, the Concord Coalition, 

and the Heritage Foundation—have taken steps, either individually or with 

others, in a series of efforts to better inform the public of the dangers posed 

by the long-term fiscal challenge and to begin a public discussion that can 

ultimately lead to action. 

As with any major public policy challenge, effective and sustained 

leadership will be critical. But leadership cannot succeed without public 

understanding and support. Research on public opinion, however, shows 

that while the public is aware of the long-term fiscal challenge, it does not 

have a good handle on the size and implications of this challenge. In 

addition, the public consistently ranks our long-term fiscal challenge as low 

priority relative to other issues, such as the current state of the economy. 

This gap in public understanding of the nature and magnitude of the longterm fiscal challenge—and how to bridge it—was the subject of GAO’s 

December 2, 2004, forum on the long-term fiscal challenge. 

The forum sought to move beyond “the usual suspects” to expand the circle 

of concern. The forum sought to create a space within which a rich and 

meaningful dialogue could take place on how to better communicate the 

long-term fiscal challenge to the public. To achieve this kind of dialogue, 

participants were a select group of individuals drawn not only from budget 

and policy experts but also from other key groups both in Washington and 

from “beyond the Beltway.” These included opinion leaders from a variety 

of sectors. (See app. I for the forum’s agenda and app. II for a list of forum 

participants.) All brought a commitment to thinking ahead and an 

eagerness to move beyond defining and measuring “the problem” to 

discussing how to broaden understanding and dialogue so that action will 

be both more immediate and more informed. 

In particular, the forum sought to identify some possible approaches and 

strategies that could help elevate the public’s understanding of the longterm fiscal challenge. Forum discussions focused in particular on the roles 

that media, educators, and leaders elsewhere in society will need to play. 

In so doing, participants expressed their views on the possible causes of 

current gaps in public understanding of the long-term fiscal challenge. 

Participants also made numerous suggestions for what types of approaches 

and actions might be effective in bridging the gaps. This report summarizes 

the ideas and themes surfaced at the forum and the collective discussion of 

Page 2 GAO-05-282SP CG Forum 
Introduction from the Comptroller General 

of the United States 

the forum participants as well as subsequent comments received from 

participants based on a draft of this report. 

Convening this forum is but one small step toward elevating public 

understanding of the challenge and acceptance of the need for change. 

Ultimately it will take the combined efforts of many individuals and groups 

over an extended period of time to successfully address the issues. The 

forum provided a venue for people concerned with the long-term fiscal 

challenge to talk with each other about their common interest in public 

dialogue on the issue. One immediate result of the forum has been that 

groups of participants have gotten together. These collaborations have the 

potential to leverage the efforts of its individual members in order to 

increase the likelihood of action on this important issue. 

I want to thank all the forum participants for taking the time to share their 

knowledge, insights, and perspectives. These will be of value to the 

American people and to their representatives in Congress as they 

communicate with their constituents about the nation’s long-term fiscal 

imbalance and the challenges and opportunities it raises. We at GAO will 

also benefit from these insights as we carry out our mission to help 

Congress examine the fiscal sustainability of today’s government spending 

and tax policies. I am hopeful that the American people will become fully 

engaged in this long-overdue and much needed national debate as a means 

to facilitate serious, timely, and sustained action that can help save the 

future for our country, children, and grandchildren. I look forward to 

working with the forum’s participants on this and other issues of mutual 

interest and concern in the future. 

David M. Walker 

Comptroller General 

of the United States 

Page 3 GAO-05-282SP CG Forum 
Section 1 

The Long-Term Fiscal Challenge and How the 

Public Perceives It 

On December 2, 2004, GAO hosted a forum on the nation’s long-term fiscal 

challenge to discuss 

•	 how to facilitate a national dialogue that recognizes the kinds of choices 

that are necessary and the need for timely action; 

•	 innovative approaches to conveying the nature, timing, and magnitude 

of the fiscal challenge; 

•	 possible changes in accounting and reporting that might help to enhance 

public understanding and promote action; 

•	 changes in the budget process, metrics, or other mechanisms that would 

help facilitate action; and 

•	 the role the media, educators, and others can play in changing the 

conversation. 

In his charge to the group, the Comptroller General noted that describing 

the problem to the public presents numerous challenges. For example, 

estimates of future federal spending and deficits are so large—current longterm federal liabilities, unfunded commitments, and other obligations are 

estimated at more than $43 trillion1

—that the numbers are beyond what 

most people can comprehend or relate to. Translating these numbers into a 

more human scale—such as “burden per capita”—might be helpful in 

communicating the magnitude of the challenge. In addition, how we 

measure the magnitude of the long-term fiscal challenge is complex. For 

example, tax preferences, such as the exclusion of employer-provided 

health benefits from individuals’ income, are usually not discussed 

although in some years their value may equal or exceed that of total 

discretionary spending (e.g., defense, homeland security, transportation, 

judicial system, education, environment etc.). 

1

 This represents the sum of selected fiscal exposures net of certain revenues (e.g., payroll 

taxes, beneficiary premiums) that fund some of these exposures. These fiscal exposures are 

shown on slide 6 of the Comptroller General’s presentation in appendix III. While this list 

provides some perspective on the range and magnitude of exposures facing the federal 

government, it is neither meant to be comprehensive nor to represent a universally agreedupon list. A broader discussion of fiscal exposures can be found in Fiscal Exposures: 

Improving the Budgetary Focus on Long-Term Costs and Uncertainties, GAO-03-213 

(Washington, D. C.: Jan. 24, 2003). 

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The forum and this report address prospects for leaders to connect with 

the public on our long-term fiscal challenge. Simply put, the long-term 

fiscal challenge is that current fiscal policy is unsustainable. As the baby 

boom generation retires, longevity and rising health care costs mean that 

federal spending for retirement and health programs—Social Security, 

Medicare, and Medicaid—will put increasing and ultimately unsustainable 

pressure on the federal budget. The resulting gap between spending and 

revenues will be too large to be eliminated by economic growth alone. 

Absent significant policy changes, a concern exists that a crisis of some 

kind is likely although no one knows when this point might be reached. 

Public perception of the long-term fiscal challenge differs from these views 

in several key respects. At present the public understands that the longterm fiscal challenge is a problem and needs to be addressed but does not 

see doing this as urgent relative to other national priorities. 

Today’s Fiscal Policy Is 

Unsustainable 

Comptroller General Walker opened the forum with a presentation entitled 

“The Long-Term Fiscal Imbalance.” (The full presentation can be found in 

app. III.) In essence, he said, this forum was about saving our future. 

Changes in the composition of federal spending over the past several 

decades have reduced budgetary flexibility, and our current fiscal path will 

reduce it even further. 

A demographic shift will begin to affect the federal budget in 2008 as the 

first baby boomers are eligible for Social Security benefits. This shift will 

increase as spending for federal health and retirement programs swells. 

Long-term commitments2 for these and other federal programs will drive a 

massive imbalance between spending and revenues that cannot be 

eliminated without tough choices and significant policy changes. 

2

 GAO has used the term fiscal exposure to provide a framework to consider the long-term 

costs and uncertainties of federal commitments and expectations for future federal 

spending. Fiscal exposures result from federal responsibilities, programs, and activities 

that may either obligate the government to future spending or simply create an expectation 

for such spending. 

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In the long term, current fiscal policy is unsustainable, and the sooner we 

change course, the better. GAO3 and the Congressional Budget Office4 

(CBO) agree that addressing the long-term fiscal challenge will require 

fundamental changes. These changes could include changes in policies, 

process, transparency, and enforcement mechanisms. A key question is, 

“How much time remains before action must be taken?” 

In the past several decades, federal budgetary flexibility has decreased. 

This has happened because spending for mandatory programs5

 such as 

Social Security, Medicare, and Medicaid has grown much faster than 

spending for discretionary programs6

 such as defense. In 1964, about twothirds, or 67 percent, of total federal spending was discretionary; in fiscal 

year 2004, this share had shrunk to about 39 percent. 

In fiscal year 2004, the federal budget deficit increased and the long-term 

outlook worsened significantly. The unified deficit was $413 billion, or 

about 3.6 percent of the economy. This deficit includes $151 billion in 

Social Security surpluses, without which the deficit would have been that 

much larger.

7

 Indeed, the on-budget deficit for fiscal year 2004 was 

$568 billion, or 4.9 percent of gross domestic product (GDP). Fiscal year 

2004’s deficit followed upon several years of increasingly negative federal 

fiscal outcomes. 

3

 For the most recent results of GAO’s long-term simulations, see 

http://www.gao.gov/special.pubs/longterm/. 

4

 In December 2003 CBO published a report on the long-term fiscal challenge that included 

the results of its long-term budget simulations. See CBO, The Long-Term Budget Outlook 

(Washington, D.C.: December 2003). 

5

 Mandatory spending is spending for entitlement programs such as Medicare, veterans’ 

pensions, payment of interest on the public debt, and certain other programs. Congress 

controls spending for these programs indirectly, by defining eligibility and by setting benefit 

or payment rules, rather than directly through the annual appropriations process. 

6

 Discretionary spending is spending that is controlled by Congress through the annual 

appropriations process. 

7

 The unified budget, which includes all receipts and outlays from federal and trust funds, is 

comprehensive of the full range of federal activities. Unified budget results are the 

difference between total federal spending and revenue in a given year. In this report, the 

term federal budget deficit refers to the unified deficit unless otherwise stated. On-budget 

totals include all federal receipts and outlays except those for Social Security and the U.S. 

Postal Service. 

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In addition, as the Fiscal Year 2004 Consolidated Financial Statements of 

the U.S. Government show,

8

 in fiscal year 2004 the federal government 

added $13 trillion in new liabilities, unfunded commitments, and other 

obligations, principally due to the new Medicare prescription drug 

program.

9 The federal government’s net liabilities, unfunded commitments, 

and other obligations now amount to more than $43 trillion, or about 

$350,000 for every full-time worker, and these unfunded commitments are 

growing larger every day. 

Looking forward, GAO’s long-term budget simulation “Baseline Extended” 

extrapolates from CBO’s 10-year budget estimates to a longer term view.

10 

As shown in figure 1, deficits do not appear large until 2030. Some might 

conclude from this that there is no need to make changes now, but a shift in 

just two assumptions produces a very different budgetary picture. 

8 GAO’s audit report on the Consolidated Financial Statements of the United States 

Government was issued on December 14, 2004, subsequent to the forum. 

9

 Enacted in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 

(Pub. L. 108-173, 117 Stat. 2066 [Dec. 8, 2003]). 

10 In the “Baseline Extended” simulation, discretionary spending is assumed to grow at the 

rate of inflation for the first 10 years and then at the rate of economic growth for the rest of 

the simulation period. 

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Figure 1: Composition of Spending as a Share of GDP under Baseline Extended 

Percent of GDP 

50 

40 

30 

20 

10 

0 

2003 2015 2030 2040 

Fiscal year 

Revenue 

Net interest 

Social Security 

Medicare and Medicaid 

All other spending 

Source: GAO’s September 2004 analysis. 

If we assume that all tax cuts remain in effect rather than expire as 

scheduled under current law, and if we further assume that for the first 10 

years discretionary spending grows with the economy rather than at the 

rate of inflation, a dramatically different picture emerges. This simulation 

is called “Discretionary Spending Grows with the Economy and All 

Expiring Tax Provisions are Extended.” (See fig. 2.) Under this alternative 

simulation, by 2040 the government would have only enough money to pay 

interest on the federal debt! 

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Figure 2: Discretionary Spending Grows with the Economy and All Expiring Tax 

Provisions Are Extended 

Percent of GDP 

50 

40 

30 

20 

10 

0 

Revenue 

2003 2015 2030 2040 

Fiscal year 

Net interest


Social Security


Medicare and Medicaid


All other spending


Source: GAO’s September 2004 analysis. 

Economic growth can help improve the long-term fiscal outlook, but it 

cannot solve the long-term fiscal problem. A “status quo” fiscal policy is 

not an option. The sooner we take action, the better. The sooner we act, 

the sooner the miracle of compound interest can work for us rather than 

against us. 

When Will the Long- Participants were generally in agreement that, absent action, a crisis would 

ultimately occur. The only question is when. Some were of the view that Term Fiscal Challenge events in the near term were likely to be catalysts for change; others were 

Begin to Have Impact? less sure when this might happen. 

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Some participants thought that the long-term fiscal challenge would affect 

the budget very soon. For example, one participant suggested that 

spending for long-term federal commitments might begin to affect the 

budget outlook as soon as 2008, the first year in which the oldest members 

of the baby boom generation would first be eligible to receive Social 

Security benefits.

11 By 2008, some factors that will affect the federal 

budget include the following. 

•	 The beginning of a long-term downturn in the Social Security cash 

surplus—the difference between payroll taxes and benefits paid---that 

will continue in the coming years. As a result of this downturn, less and 

less cash will be available from payroll tax receipts to finance other 

activities in the federal budget until eventually outlays exceed receipts.12 

•	 Certain tax reductions will be about to expire, e.g., reduced tax rates on 

dividends and capital gains. 

• The Medicare drug benefit will have been fully implemented. 

Under CBO’s September 2004 baseline estimates, Medicare spending is 

currently estimated to rise by about 30 percent between 2005 and 2007. 

Alternatively, participants suggested that a crisis could be triggered much 

sooner by events in financial markets. One participant expressed the view 

that a loss of investor confidence in the long-term prospects for the U.S. 

economy was more likely to trigger a crisis than any single domestic event. 

Another participant was of the opinion that this could happen soon: 

today’s large trade deficit (current-account deficit

13) meant that the budget 

problem was no longer a long-term problem. Several participants were of 

the view that concern by financial markets would spark change. These 

11 The baby boom generation is defined as those born between 1946 and 1964. The oldest 

baby boomers will turn 62 in 2008, making them eligible to receive a reduced retirement 

benefit from Social Security. Labor force growth will begin to slow as the boomers retire. 

CBO assumes slower economic growth after 2009. 

12 Under the 2004 intermediate estimates of the Social Security Trustees, the cash flow in 

Social Security is projected to be negative beginning in 2018. 

13 The current account balance is defined as the combined balances on trade in goods and 

services, income, and net unilateral current transfers. Technically, the trade surplus/deficit 

is defined as exports less imports of goods and services. The current account deficit of 

recent years is often popularly known as the trade deficit. 

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participants pointed to history: in the 1980s, financial markets’ concern 

about large, persistent federal budget deficits had triggered action on 

deficit reduction. Another participant expressed the view that markets 

were currently beginning to demand action on the long-term fiscal 

challenge and cited the recent fall of the dollar as a possible example. 

Other participants were unsure when or how a crisis might occur. One 

participant commented that the market for long-term bonds does not 

appear to have reacted to the fiscal outlook. Another participant noted that 

while today’s borrowing from abroad is of a magnitude unprecedented in 

the post-World War II era, it represents a set of arrangements that are 

comfortable for all those involved. Capital inflows from abroad—included 

in the current account deficit—make it possible for Americans to consume 

more than we produce and for other countries to sell their goods in the 

United States. This is comfortable both for the United States and for those 

entities and individuals in other nations who buy U.S. goods and securities, 

including Treasury securities that finance the federal budget deficit.14 (See 

app. IV for a discussion of the relationships between the current account 

balance, the federal budget and national saving.) 

Another participant similarly noted that a smaller nation than the U.S. 

could not have so large a current account deficit measured as a share of its 

economy without this leading to a crisis. As a result it was not clear how 

much longer the U.S. would continue to run large current account deficits, 

how this would ultimately change, and with what effects. 

To avoid a crisis, we will need to save more as a nation—as individuals and 

through fiscal policy—participants emphasized. Such higher national 

saving to finance consumption in the future can only be achieved by 

lowering levels of consumption today. Federal budget deficits are a form of 

dissaving, and individuals are not saving enough. Participants noted that 

the effects of federal legislation aimed at increasing personal saving 

through tax incentives had so far been mixed. Today’s culture tends to 

discount the future, participants noted. What was needed was cultural 

change. 

One participant cited recent television coverage of holiday shoppers 

breaking down the door of a major retail store early on the morning after 

14 Between 1993 and 2004, the estimated share of publicly held debt held by international 

investors more than doubled from 19 percent to over 40 percent. 

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Thanksgiving as an example of today’s focus on consumption. This 

participant added that those shoppers were probably not thinking about 

the impact of today’s consumption on their future well-being and the wellbeing of future generations. Participants generally agreed that people 

needed to recognize how choices made today inform the future. This is 

true of policy choices as well. 

Health Care Is the 

Largest and Perhaps 

Most Difficult Part of 

the Long-Term Fiscal 

Challenge 

Participants generally agreed with the Comptroller General’s description of 

the nature, magnitude, and timing of the problem. They shared his sense of 

urgency about the need to take action soon rather than wait until a crisis 

occurred. They emphasized several observations on the nature and 

significance of long-term fiscal challenge. 

Health care is a bigger problem than Social Security. Participants 

acknowledged the need for Social Security reform but emphasized that 

Social Security is a relatively small part of the long-term fiscal challenge 

when compared to spending on health care. One participant noted that the 

estimated Social Security shortfall is about one-third the estimated cost of 

recent tax cuts if made permanent. Several participants observed that few 

members of the public are aware of this. Rather, the general public 

impression is that solving Social Security would solve most of the longterm fiscal challenge, and this is not correct. Indeed, one forum participant 

stated that it was only by attending this forum that he had learned that 

health care spending was a much more important, and potentially far more 

difficult, component of the long-term fiscal challenge than Social Security. 

Participants expressed the view that in characterizing the long-term fiscal 

outlook, several key distinctions needed to be made between Social 

Security and the largest federal health programs, Medicare and Medicaid. 

Participants observed that the public was largely unaware that health 

spending accounted for a much larger share of the long-term fiscal problem 

than did Social Security. 

In addition, many approaches to reforming Social Security have been 

articulated and were well known. For example, approaches included 

raising the retirement age, changing the indexation of initial benefits from a 

wage-based index to an inflation-based index, modifying the tax base, and 

so on. Many specific proposed solutions had been under discussion for 

some years. In contrast, many participants expressed the view that 

approaches to slowing the growth of health care spending remain elusive. 

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Changes to federal health care programs cannot be made in 

isolation: Addressing federal health spending will ultimately 

require restructuring the overall health care system. The long-term 

fiscal challenge cannot be successfully addressed without addressing its 

largest component: federal health spending—i.e., for Medicare and 

Medicaid. Participants expressed the view that federal health spending 

trends could not be viewed in isolation from the health care system as a 

whole. One participant explained that Medicare and Medicaid cannot grow 

over the long term at a slower rate than cost in the rest of the health care 

system without resulting in a two-tier health care system or squeezing 

providers who then in turn might seek to recoup costs from other payers 

elsewhere in the health care system. Rather, in order to address the longterm fiscal challenge, it will be necessary to find approaches that deal with 

health care cost growth in the overall health care system. Participants 

agreed that this would be very difficult but essential. The linkages between 

the long-term fiscal challenge, federal health care programs, and the health 

care system are not well understood. Educating the public on these 

linkages is of critical importance. 

Participants noted that many sectors of the economy and different levels of 

government are involved in health care. Cost growth in employer-provided 

health insurance is raising costs for employers and individuals. Rising 

health care costs are squeezing the ability of businesses to offer higher 

salaries that would enable employees to save, one participant said. Such 

costs are also having significant competitiveness, employment, and 

revenue implications. In addition to affecting federal spending, Medicaid is 

a major driver of state spending. “Few things will be harder than 

restructuring the health care system,” said one participant, but without this 

restructuring the long-term fiscal challenge cannot be solved. 

Participants noted that solutions to health care cost inflation were likely to 

occur through an incremental process. One participant expressed the view 

that changing health care involved profound ethical, philosophical, and 

moral issues. Mr. Walker observed that an earlier Comptroller General 

Forum on Health Care had called attention to many of the issues raised by 

participants.

15 The purpose of that forum had been to find ways to elevate 

the nation’s understanding of health care cost, access, and quality 

15 GAO, Health Care: Unsustainable Trends Necessitate Comprehensive and Fundamental 

Reforms to Control Spending and Improve Value, GAO-04-793SP (Washington, D. C.: May 

2004). 

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challenges. Participants had noted the need for structural changes in the 

health care system and the likelihood that these changes would be done on 

an incremental basis over a considerable period of time. At the same time, 

we should start now. 

Mr. Walker also noted that the Medicare Prescription Drug, Improvement, 

and Modernization Act of 2003 had established a Citizens’ Health Care 

Working Group. The group will lead a nationwide public debate on ways to 

improve the health care system to provide every American with the ability 

to obtain quality and affordable health care coverage. This group is 

required to hold public hearings over a 2-year time frame in preparation for 

making recommendations to the President and the Congress. As 

Comptroller General, Mr. Walker will appoint 14 of the 15 members of the 

Task Force, including the Chair. 

For the Public, the 

Long-Term Fiscal 

Challenge Is an Issue, 

but Not the Issue 

Nancy Belden, President of the American Association for Public Opinion 

Research, presented baseline information on what the public knows about 

the long-term fiscal challenge and how it perceives it. There are two 

drivers for change—political will and public will, Ms. Belden said. Polling 

data is important because it can provide information on public will. Her 

presentation summarized the results of several polls conducted by various 

polling organizations within the past few years. (See app. V for 

Ms. Belden’s presentation.) 

In general, polling data suggests that the public is “worried but not that 

worried” about deficits, Ms. Belden said. Although aware of the long-term 

fiscal challenge and concerned about it, the public rates the federal budget 

deficit as of lower priority relative to other issues. In addition, a majority of 

those polled supported additional spending for highly valued programs 

over balancing the budget. 

The public’s attitude toward federal budget deficits in general is complex. 

About two-thirds of those polled would prefer balancing the budget to 

cutting taxes, and about half of those polled expect today’s deficits to 

worsen in years to come. At the same time, the deficit is seen as far less 

prominent than many other issues. These higher-ranked issues include the 

economy, terrorism, jobs, education, and Iraq. In particular, over half of 

those polled indicated concern about the future of the economy. Only 4 

percent, however, listed the deficit as their biggest concern. 

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When presented with choices and trade-offs, the public’s attitude is one of 

“wanting to have its cake and eat it too,” Ms. Belden said. On the one hand, 

more than two-thirds of those polled supported postponing future tax cuts 

if doing so would prevent further worsening of the deficit. Similarly, about 

two-thirds of those polled chose balancing the budget over further tax 

reductions. On the other hand, when presented with a need for new 

government spending, e.g., for national security, about half of the public 

thought tax cuts that have been enacted but not yet phased in should be left 

in place. When asked to choose between balancing the budget and 

additional spending on education, health care, and economic development, 

more than half chose the additional spending. From the polling data, it is 

unclear whether the public sees federal budget deficits as related to the 

economy. 

Because the public holds conflicting attitudes with respect to balancing the 

budget, and with respect to tax and spending policy, the federal budget 

deficit is “an issue that cries out for leadership,” Ms. Belden said. Leaders 

need to define for the public the urgency and implications of the long-term 

fiscal challenge and the cost and implications of inaction. They will need 

both to develop solutions and persuade the public of the need to enact 

them. 

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A major theme of the forum was a need for collaborative leadership to 

change the conversation about our long-term fiscal challenge. 

Forum participants explored possible ways to elevate public understanding 

of the long-term fiscal challenge. Budget experts, media, educators, 

foundations, and other nonprofit or “good government groups” and others 

seeking to promote more active and thoughtful engagement by the public 

would all have roles to play in changing the conversation, but none could 

substitute for leadership from elected officials and the deliberation 

process. Leadership would be key, and leaders would need to reach 

consensus on the types of fiscal policy changes to address the long-term 

fiscal challenge. However, public understanding of our challenge and 

support for the need to take actions to address it are likely to be necessary 

as a precondition for elected officials and other policymakers to act. 

Budget process reform was seen as one potential tool to support 

agreements reached and implement needed changes but not as a way to 

create a consensus on the need for action. 

Media Presentations on 

the Long-Term Fiscal 

Challenge Need to 

“Make the Intangible 

Tangible” 

Representatives of national and local media, both print and nonprint, 

discussed the role of the press with forum participants. Media participants 

were asked to comment on why the long-term fiscal challenge generally 

does not get coverage and what kinds of reactions they get when it does. 

The main reason cited to explain limited or lack of coverage was that, as 

one writer put it, “deficits are boring.” Too often, jargon and technical 

terminology are used in talking about federal budget deficits. This both 

confuses and intimidates readers. In addition, reducing the deficit is often 

presented as an end in itself, apparently unrelated to anything in ordinary 

people’s lives. 

When articles on federal budget deficits did get published, media 

representatives said that many readers did show interest. Reader reactions 

ranged from very positive to expressions of confusion and requests for 

more information. These reactions suggested that a wide range of readers 

needed more information about the long-term fiscal challenge. For 

example, those requesting clarification and more information included 

journalists and elected officials at all levels of government—federal, state, 

and local. One media participant noted that educating local leaders on the 

issues might be particularly important, for these were our future national 

leaders. 

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Some media representatives suggested that there may be a sense in some 

editorial circles that deficits are especially “boring” for younger people, 

who increasingly tend to get their news from nonprint sources, such as 

Internet “blogs”—Web logs, or diaries—and television. Journalists and 

opinion writers may feel pressure to choose different material more likely 

to attract younger readers, who are crucial to the future of their 

publications. 

Media representatives and other forum participants suggested that these 

nonprint media should be explored as ways to get the message to younger 

people, who will be most affected if the long-term fiscal challenge is not 

effectively addressed. Television programs that satirize current events and 

public television were also cited as venues for reaching out to younger 

people who do not regularly read print media. 

Forum participants offered many specific suggestions for how to talk about 

the long-term fiscal challenge in media presentations. The main message of 

these suggestions was that presentations need to resonate with ordinary 

people; otherwise, nothing will change. 

Media and other forum participants suggested that presentations should 

encompass the following. 

•	 Start with values and emotion. Values and emotion—not 

abstractions—should be the starting point in explaining the long-term 

fiscal challenge. People can only hear messages that fit with their 

values. If not grounded in people’s values, discussions of the long-term 

fiscal challenge will not resonate with the public. 

Participants agreed that a key moral context is the impact federal 

budget deficits will have on future generations. Another key moral 

context is integrity. Some participants called for greater integrity, e.g., 

transparency, in the federal budget process. Others noted that 

addressing the long-term fiscal challenge would require sacrifice. 

Numbers alone were not useful because they do not evoke an emotional 

response, one media representative said. In discussing the long-term 

fiscal challenge, some participants urged a need for more passion, i.e., 

“fire and brimstone rhetoric.” 

•	 Make “the intangible tangible.” Similes and metaphors—not big 

numbers—can help people understand the long-term fiscal challenge. 

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Talking about the federal budget using the very big numbers required— 

millions, billions, and trillions—simply does not compute for most 

readers, one writer said. Instead, one participant suggested that 

increasing spending in ways that worsen the long-term fiscal challenge, 

e.g., the Medicare drug benefit, could be compared to buying a plasma 

TV for every household in America on credit. Analogies like this could 

help make the consequences of the long-term fiscal challenge vivid and 

immediate. 

•	 Link to “pocketbook” issues. The federal budget deficit needs to be 

linked to more concrete policy concerns. For example, one writer 

emphasized the need to explain how budget deficits are a drag on the 

economy. Others urged making linkages to the value of the U.S. dollar, 

to interest rates, to Americans’ ability to buy imported goods. Another 

suggested approach would be to explain how the long-term fiscal 

challenge poses risks to future economic growth and the standard of 

living for Americans. One participant reminded the forum that, as 

Nancy Belden’s presentation illustrated, the economy is the issue people 

care about most. Getting people to understand that the long-term fiscal 

challenge will eventually harm the economy would be one definition of 

progress. 

Another participant characterized the long-term fiscal challenge as a 

national security issue and suggested a “strategic fiscal reserve” was 

needed to create greater budgetary flexibility to deal with future 

unforeseen threats. 

•	 Use simple language. Economic terms should be avoided. “Fairness” 

was a better word to use than “equity.” Participants suggested that one 

role for experts such as those present at the forum could be to devise 

new ways to make the long-term fiscal challenge more transparent. 

When (or if) the crisis came, these experts would be ready to explain it 

to the public. Corporate scandals such as those concerning Enron and 

WorldCom were cited as one example of a situation in which experts 

had played this kind of role. 

•	 Link to the ongoing squeeze on federal spending. Presentations 

need to emphasize the way federal budget deficits will squeeze the 

ability to fund government programs people care about, such as 

education and programs for children and families. Within 10 years the 

entitlement squeeze will dramatically shrink the funds available for 

other goals, one participant said. Even now, federal agencies’ budgets 

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and programs people care about such as education are being squeezed 

in ways people did not expect. 

Media representatives told forum participants that the role of the press is to 

“speak truth to power” but cautioned that the press cannot lead on the 

issue alone. Leadership will also be needed in other sectors of society— 

from politicians, nonelected officials, and the business community, for 

example. Several participants noted that in the 1990s, political leadership 

had played a key role in triggering and sustaining deficit reduction actions. 

For example, both Paul Tsongas, who competed with Bill Clinton for the 

presidential nomination of the Democratic Party in 1992, and Ross Perot, 

who ran in the 1992 presidential election as an independent, made large 

and persistent deficits a signature issue. The press has an obligation to 

take on the long-term fiscal challenge, but as one media representative put 

it, “the press needs an echo.” 

Formal Education Can 

Play Various Roles in 

Helping to Elevate 

Public Understanding 

Dan Palazzolo, Associate Professor of Political Science, University of 

Richmond, and Muriel Siebert, President, Muriel Siebert & Co., discussed 

some potential roles formal education at the high school and college levels 

could play based on their respective work in education. At the college and 

university level, educators needed to lead by preparing young people to 

understand the long-term fiscal challenge and how it will affect them, and 

by preparing young people to take leadership roles. At the high school 

level, financial literacy education can help prepare young adults to 

understand the long-term fiscal challenge and the impact it can have on 

their need to plan, save, and invest for their future. Identifying “lessons 

learned” from past leadership on major national issues is another way 

educators can play a part in changing the conversation about the long-term 

fiscal challenge. 

Colleges and universities can help educate both the general public 

and the nation’s future leaders on the long-term fiscal challenge. 

Dan Palazzolo, Associate Professor of Political Sciences at the University 

of Richmond, presented his perspective on the potential for colleges and 

universities in elevating public awareness of the long-term fiscal challenge. 

Colleges and universities offer 

•	 key stakeholders. Colleges and universities are where many key 

stakeholders—young people—are to be found. They will be most 

affected by the long-term fiscal challenge, and the discussion needs to 

be brought to them. 

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•	 intellectual capital and flexibility. Colleges and universities are 

places where new thinking emerges, even if the institutions themselves 

may be fragmented and knowledge “stovepiped.” Moreover, colleges 

and universities can play different roles in the conversation about the 

long-term fiscal challenge. For example, they can provide venues for 

forums and conferences; they can host discussions. 

•	 neutrality. Colleges and universities are perceived as neutral by the 

communities around them. This perception further heightens the value 

of these institutions as appropriate places to host discussions that can 

help elevate public understanding of the long-term fiscal challenge. 

Professor Palazzolo noted that the Exercise in Hard Choices created by 

the Committee for a Responsible Federal Budget had been hosted by 

colleges and universities.1 

Professor Palazzolo discussed the role of colleges and universities in 

preparing future leaders to lead. A course he is currently developing will 

analyze the period beginning in 1987 in which leaders made numerous 

efforts over a period of time that were ultimately successful in reducing 

large, persistent deficits. To answer the question of whether and how 

today’s leaders can take on long-term issues, the course will look at how 

leaders have communicated about these issues in the past. 

A key premise of the course is that leadership and change are a process, 

and we can learn by looking at how the process worked. Deficit reduction 

in the 1980s and 1990s was achieved by increments, Professor Palazzolo 

noted. It is important to look at how policymakers focused on solving 

problems—at the incremental process—rather than seek a single big 

answer. 

Financial literacy education can help prepare young people to 

understand the long-term fiscal challenge. One role for formal 

education is to teach young people personal financial literacy: people 

cannot understand the nation’s finances if they do not understand their 

own. Muriel Siebert, a financial expert and the first woman to hold a seat 

on the New York Stock Exchange, described how she had persuaded city 

educational officials to add a course in financial literacy to the required 

high school curriculum. Ms. Siebert emphasized the link between basic 

1 The Exercise in Hard Choices is discussed in the next section of this report as one example 

of a “public engagement” approach. 

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financial literacy and the long-term fiscal challenge. People need to 

understand the concept of a household deficit before they can understand 

the federal budget deficit. 

To better prepare young people to manage their money once they became 

adults, the course, devised by Ms. Siebert’s organization, covers such basic 

aspects of financial literacy as income tax returns, trade-offs between 

owning and leasing a car, credit, bankruptcy, and what taxes pay for. It also 

includes coverage of the trade-offs between spending today versus saving 

for tomorrow. 

Today’s high school students have a stake in how the long-term fiscal 

challenge is addressed. If the long-term fiscal challenge is not effectively 

addressed, they are likely to end up paying the bill. As was noted in the 

forum discussion on public engagement, high school students have the 

capacity to understand and discuss the kinds of choices that will need to be 

made in the federal budget. 

Mr. Walker noted that an earlier Comptroller General Forum on financial 

literacy had focused on the link between financial literacy education and 

the long-term fiscal challenge.2 He called forum participants’ attention to 

an ongoing major national initiative by the American Institute of Certified 

Public Accountants (AICPA) on financial literacy education. 

Public Engagement 

Offers One Approach 

to Elevating Public 

Understanding of the 

Long-Term Fiscal 

Challenge 

Participants described various types of strategies for involving the public in 

the debate and how these had been or might be used in the future to 

increase public understanding of the long-term fiscal challenge. 

Participants also explored how “public engagement” approaches might be 

extended to new venues, e.g., television. 

Participants generally saw value in public engagement strategies but 

expressed various views on how public engagement might be useful and 

how useful it might be. For example, some participants thought public 

engagement could best be used as a tool for better understanding public 

opinion. Other participants saw the values-based dialogue approach used 

in one form of public engagement as a possible tool to help leaders reach 

consensus on solutions to the long-term fiscal challenge. 

2

 GAO, Highlights of a GAO Forum: The Federal Government’s Role in Improving 

Financial Literacy, GAO-05-93SP (Washington, D. C.: Nov. 15, 2004). 

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What Is “Public 

Engagement”? 

Public engagement is an approach to elevating the public’s understanding 

of an issue through a community or group event, e.g., a town hall meeting. 

It typically focuses on hearing the voices of people usually left out of 

decision making and seeks to involve them in a dialogue. The aim of public 

engagement is to build a common understanding of an issue and the need 

for change and to help people deliberate trade-offs embodied in proposed 

policy changes. In contrast to public relations, public engagement does not 

seek to “sell” a solution but rather help a community or group of people 

work through difficult issues and find areas of agreement. In some forms, 

public engagement seeks to use the results of its public deliberations to 

inform policy choices. 

Yankelovich-Wooden model of public engagement seeks to create a 

values-based dialogue about issues. Daniel Yankelovich, Chairman of 

Public Agenda and Chairman of Viewpoint Learning Inc., and Ruth 

Wooden, President of Public Agenda, described a new model of public 

engagement they have developed. (See app. VI for their presentation.) 

The Yankelovich-Wooden model seeks to counter public mistrust through 

dialogue. As was the case in several other periods of American history— 

for example, the Great Depression and the 1970s—leaders and the public 

have very different perceptions of governance. Conversation is difficult 

across this chasm of mistrust, and consensus on needed changes is difficult 

if not impossible to achieve. 

Mr. Yankelovich explained that a values-based dialogue can build a 

stewardship bridge across the political spectrum and between leaders and 

the public. Stewardship can be understood as the moral obligation people 

have to leave things in better shape for those who come after. A dialogue 

based on the shared value of stewardship can get past the mistrust 

pervasive in the American political environment. The very process of 

dialogue creates trust and a sense of ownership. By focusing on common 

ground instead of differences, a values-based dialogue seeks to counter 

adversarial approaches. Ultimately, people can better understand and 

weigh trade-offs in a fact-based, forthright and thoughtful manner, moving 

beyond public choices based on self-interest. 

Mr. Yankelovich and Ms. Wooden noted that a values-based dialogue is not 

suitable for all issues. Because the model is difficult and expensive to use, 

it is not appropriate for everyday issues but rather for complex issues 

where simpler approaches are unlikely to be effective. The model can also 

be understood as a research tool that can identify trends in public opinion 

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and effective presentation approaches that can then be used in other 

settings. For example, research results can be used to develop community 

initiatives, media presentations, or “meetings in a box”—the capacity for 

civic organizations to replicate the same meeting in different locations. In 

contrast to polling and focus groups, dialogue-based research can identify 

the public’s preferences once the public has gotten past wishful thinking 

and avoidance of trade-offs. 

Examples and other approaches to public engagement. Participants 

cited several examples of public engagement including projects on which 

they had worked or with which they were familiar as having elements in 

common with the Yankelovich-Wooden model of public engagement. 

Participants viewed these projects as showing that “public engagement is 

possible.” 

•	 The Great Social Security Debate: organized in 1998 by the Concord 

Coalition and the American Association of Retired Persons. This project 

sponsored a series of national discussions on Social Security including 

then-President Clinton, other elected officials, and policy experts 

representing a broad range of views. 

•	 Americans Discuss Social Security: a project of AmericaSpeaks in 1998 

funded by The Pew Charitable Trusts. Members of the general public, 

elected officials including then-President Clinton, and key stakeholder 

groups participated in town meetings that aimed to elevate public 

understanding of Social Security reform options and give feedback. One 

finding from the public deliberations was that the public was able to 

identify some areas of agreement notwithstanding their initial views on 

the issue. 

•	 A biennial town meeting, a “Citizen Summit” by the Mayor of the District 

of Columbia, a project by AmericaSpeaks. This gives the general public 

an opportunity to express views on the trade-offs between different 

budgetary priorities as outlined in the Mayor’s strategic plan. Views 

expressed then have impact on the District’s actual budget process. 

•	 The Exercise in Hard Choices: a project by the Committee for a 

Responsible Federal Budget. The Exercise in Hard Choices (conducted 

periodically over the last 20 years) is a form of public engagement in 

which the general public and the local Member of Congress participate 

in an exercise in mock budgeting. Participants are asked to make tradeoffs in the context of specific information on the long-term fiscal 

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challenge. A key feature of the Exercise is that people with differing 

views are asked to engage with each other in a dialogue about the kind 

of budgetary trade-offs that will have to be made if the long-term fiscal 

challenge is to be addressed. The results of the Exercise show that 

people easily engaged in the activity and valued the opportunity to 

interact with people of opposing views. Moreover, the results of the 

Exercise show that people will make rational and altruistic decisions to 

solve the long-term fiscal challenge. 

The Exercise has also been done with a group of high school students 

ages 16 through 18. The results of this Exercise showed that young 

people easily understood the issues involved if not always all the 

nuances. 

•	 A project on property taxation in New Jersey: a project in 2003 and 2004 

by Public Agenda for the Coalition for the Public Good. In this project a 

group of people selected in various ways came together in a mockconstitutional convention to discuss ways to reform taxation in New 

Jersey so as to reduce reliance on the property tax. The result of this 

meeting was a report presenting findings to state officials. Ms. Wooden 

explained that this report was presented to the state legislature, which 

recommended convening an actual constitutional convention. New 

Jersey presently plans to hold a constitutional convention to debate 

reforming the property tax. 

Participants also pointed to other venues that could be used for public 

engagement in the future. For example, events in public television have 

been effective in engaging the public on numerous issues, for example Ken 

Burns’ series on the Civil War and Bill Moyers’ series on dying.3 One 

participant described this kind of use for television in the new model of 

public engagement as a “proxy dialogue.” One participant added that 

“serious games” (following on the Committee for a Responsible Federal 

Budget “Exercise in Hard Choices” model) were another means that could 

be used to elevate public understanding of the long-term fiscal challenge 

both on an individual and collective basis. Such games could be potentially 

useful in reaching the younger generations who are very computer literate. 

3

 For example, Bill Moyers’ series “On Our Own Terms” was accompanied by a community 

action campaign aimed at stimulating dialogue and action on issues surrounding end-of-life 

care. 

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One participant noted that public engagement and media coverage were 

complementary. Events that engaged the public could help attract media 

coverage. For example, Concord Coalition has held grass roots events that 

have included the Member of Congress for the district in which the event 

was held, and this has led to media coverage. 

Potential uses and limitations of public engagement. Participants 

proposed several ways the new model of public engagement might help 

move the nation toward a political environment in which the long-term 

fiscal challenge could be addressed. Participants generally agreed on the 

value of the Yankelovich-Wooden model of public engagement as one 

means to elevate public understanding of the long-term fiscal challenge. 

They also generally agreed with Ms. Wooden and Mr. Yankelovich that their 

model could be a valuable research tool for providing leaders with 

information on public opinion. One participant expressed the view that 

public engagement could be useful in surfacing key values. Some 

participants noted that public engagement of the kind described by 

Ms. Wooden and Mr. Yankelovich could be helpful in identifying a baseline 

for public understanding and in identifying trends in public opinion. 

Other participants cautioned against using public engagement as a way to 

make policy. One participant noted that polling data can identify trends— 

they often show how the public is ahead of policymakers—but added that 

these data are too crude and easy to manipulate to be a useful way of 

making policy. Some participants thought an expectation that the public 

should take time from other activities to develop policy solutions was an 

unreasonable burden. Leaders had the responsibility to develop policy 

solutions, some participants said. 

These participants further suggested that a major barrier in moving 

forward on the long-term fiscal challenge was not simply a lack of 

knowledge among the general public but also a lack of consensus among 

leaders on the nature, extent, and timing of the problem as well as possible 

solutions. For example, with Social Security, there were clear choices that 

could be discussed and debated, but participants were generally agreed 

that this was not true of health care, which accounted for a much larger 

share of the long-term fiscal challenge. One possible use of the 

Yankelovich-Wooden model might be to help leaders reach consensus. 

Participants pointed to the 1983 reform of Social Security as an example 

where leaders developed solutions and successfully gained public 

acceptance for changes that were “outside the comfort zone.” For 

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example, one participant said that polling data show that people are 

opposed to raising the retirement age, but this change was included as part 

of the 1983 reforms to Social Security. In the view of these participants, the 

role of leaders was to arrive at solutions; a “permissive majority” would 

then support them. 

The Role of Leaders in 

Changing the 

Conversation and 

Addressing the LongTerm Fiscal Challenge 

Regardless of their view on the appropriate form of public dialogue, 

participants agreed on the importance of public understanding and support 

for change; they also stressed that leadership would be essential to 

changing the conversation and moving the nation forward to solutions to 

the long-term fiscal challenge. Leadership would be needed from many 

sectors of society but most importantly from elected officials. 

Participants discussed how the budget process could serve as a tool 

available to leaders to help change the conversation about federal 

budgeting and to promote fiscal discipline. Participants generally agreed 

that incorporating a longer term perspective into federal budget decision 

making could help promote stewardship and intergenerational fairness. 

Participants suggested several approaches to doing this and identified 

possible concerns. 

More generally, participants observed that addressing the long-term fiscal 

challenge will require many actions over an extended period of time. 

Changing the conversation is the first step, but much work will remain to 

develop and implement solutions. Participants emphasized that the longterm fiscal challenge is large and complex. Health care is a key driver, and 

solutions that can reduce health care cost growth and gain consensus 

remain elusive. An iterative process will be needed, and progress will take 

time, but the sooner we start, the less wrenching needed changes will have 

to be. 

Leadership Will Be A theme throughout forum discussions was that participants saw a need for 

leadership by many different sectors of society—from the White House to Needed in Many “beyond the Beltway.” Media representatives noted that the press cannot 

Sectors of Society be expected to change the conversation alone. The current “vacuum” in 

the discussion must be filled by others, including members of the business 

community, educators, foundations, budget experts, and—most 

importantly—elected officials. 

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One participant expressed the view that the role of elected officials was to 

move the nation towards solutions, and this would require deliberation, 

reconciliation, and increased transparency. This participant noted that 

Members of Congress engage with the public virtually every week when 

they talk with their constituents, and this was one form of “public 

engagement.” Budget experts could help elected officials by giving them 

clearer, simpler language with which to describe the long-term fiscal 

challenge, why it matters, and the range of options to address it, this 

participant suggested. This would go a long way toward changing the 

conversation and moving the nation forward. 

This participant added that the dialogue and deliberation that occurs within 

Congress is what matters. The congressional deliberative process is an 

“incredibly important” means for the exchange of ideas. Another 

participant agreed, noting that public debate and the media are important, 

but they are no substitute for congressional deliberation. 

Participants generally agreed that leadership would also be needed from 

elected officials at the state and local level. Participants noted that state 

and local officials would be directly affected by burgeoning federal deficits. 

One participant further noted that it was especially important that state and 

local leaders understand the long-term fiscal challenge, for some were 

future leaders at the federal level. 

Some participants saw a need for a charismatic leader who could dramatize 

the issue and focus public attention. By connecting with the public on an 

emotional level, a charismatic leader can overcome mistrust and gain 

public support for change. These participants cited Ross Perot’s calls for 

deficit reduction in the early 1990s. 

Taken together, participants’ comments indicated that leadership would 

have to be a shared burden. For example, in his presentation Professor 

Palazzolo noted that he has made frequent use of work done at think tanks 

and by organizations such as GAO on the long-term fiscal challenge. He 

called for tighter relationships going forward between academia and these 

types of organizations. 

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Budget Process Can 

Enable Leaders to 

Make Hard Choices 

Participants’ discussions throughout the forum touched on what kinds of 

tools leaders would need and the flexibility they would need to move the 

nation forward on the long-term fiscal challenge. Several former CBO 

Directors and other forum participants pointed to budget process 

mechanisms as one such tool that in the past has helped to enforce fiscal 

discipline. In addition, budget process mechanisms can enable leaders to 

make hard choices. For example, a budget process can support leaders in 

efforts to take early action. Budget process is about changing behaviors; it 

is about changing the incentives for policymakers as they make tough 

budget decisions. 

In discussing possible budget process reforms, participants generally 

agreed on a need for incorporating greater transparency about the federal 

government’s current financial condition and the costs of long-term 

financial commitments (both on the spending and revenue sides of the 

budget). The challenge is in the specifics of achieving this goal. Many 

participants put forward various approaches and many specific suggestions 

while others raised concerns about the approaches. 

Three former CBO Directors—Alice Rivlin, Rudy Penner, and Edward 

Gramlich—led a discussion on the role of the budget process in the longterm fiscal challenge.4 They agreed that one role of the budget process was 

to enforce an already existing consensus among policymakers about 

budgetary decisions. They concurred with a statement made some years 

ago by Rudy Penner that “the [budget] process isn’t the problem, the 

[budget] problem is the problem.” Political will was more important than 

any process. Process cannot force consensus but if consensus on 

budgetary goals is reached, budget process changes can be designed to 

facilitate choices for fiscal discipline. As one former CBO Director put it, if 

there is no agreement on the nature of the budget problem, then no process 

will help. 

The former CBO Directors also agreed, however, that “process matters.” 

They agreed that budget mechanisms such as those enacted in the Budget 

Enforcement Act (BEA) of 1990 had played a major part in sustaining fiscal 

discipline over a period of time. One former CBO Director explained that 

4

 Alice Rivlin was the Founding Director of CBO, serving from 1975 through 1983. Rudy 

Penner was CBO Director from 1983 through 1987. Edward Gramlich served as Acting 

Director of CBO in 1987. 

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these mechanisms had been effective in part because they had focused on 

behavior vis-à-vis the annual appropriations (discretionary caps) and 

proposed changes to mandatory programs or tax policy (the “PAYGO” 

requirement that meant Congress had to find offsets for any increases to 

mandatory spending or reductions to revenue). BEA’s focus on actions 

contrasted with the imposition of aggregate deficit limits, which fail to 

distinguish between the results of action and the results of outside fiscal 

shocks such as recession.

5 This focus on action facilitated enforcement. 

Participants generally agreed with the former CBO Directors both that 

budget process changes should not be viewed as a panacea and also that 

the specifics of the budget process were important. Specifically, many 

participants suggested that greater transparency about the long term 

needed to be incorporated into the budget process. 

Participants generally agreed that greater transparency was needed about 

the nation’s fiscal outlook. Some participants characterized this need in 

terms of moral values. Greater transparency would be one means to reflect 

the value of stewardship in the budget process; greater transparency about 

long-term costs would promote an intergenerational perspective in budget 

decision making. Mechanisms that would promote greater transparency 

would increase the integrity of the budget process, some participants 

noted. Some participants suggested various approaches to making the 

long-term costs of proposed legislative change more transparent, but other 

participants raised concerns about suggested approaches. 

Many participants expressed support in principle for reinstituting 

mechanisms like the BEA discretionary caps and PAYGO, but some 

questioned whether these types of mechanisms would fit in today’s 

environment and if so, how effective they would be. For example, some 

participants pointed to ongoing needs for defense and homeland security 

spending in discretionary appropriations as creating a very different set of 

circumstances than in the 1990s when policymakers could take advantage 

of a “peace dividend.” Some participants saw a need for reinstituting a 

PAYGO requirement while others did not foresee changes in the near future 

to mandatory spending or tax policy. Another participant expressed 

support for reinstituting PAYGO on the grounds it would constitute a 

5

 One former CBO Director observed that in practice, aggregate limits, for example, as 

embodied in the 1985 Gramm-Rudman-Hollings legislation or in the European Union’s 

Stability and Growth Pact, were difficult if not impossible to enforce. 

Page 29 GAO-05-282SP CG Forum 
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How Can We Change the Conversation About


the Long-Term Fiscal Challenge?


“speed bump” but noted that applying PAYGO to both spending and 

revenue was controversial. 

Participants put forward several types of budget process changes aimed at 

increasing transparency about the long term. Some suggested that CBO 

scoring6

 should make clear to policymakers whether a given legislative 

proposal would make the long-term fiscal outlook better or worse. One 

participant called for an “intergenerational PAYGO” process in federal 

budgeting that would require CBO to score the intergenerational 

consequences of a bill. 

One suggestion was to require CBO to prepare a supplementary estimate in 

present value terms for the cost of major spending and tax legislative 

proposals over a longer time frame, e.g., 75 years.

7 This kind of estimate 

would summarize the net of all estimated future costs and savings in 

today’s dollars (present value) using a specific discount (interest) rate for 

the chosen time frame. This would be a supplement to, rather than a 

substitute for, current and other potential budget-related information. 

Participants saw both advantages and risks in present value scoring. A 

present value estimate would make information on the long-term costs of 

legislative proposals available to policymakers as they deliberated 

legislative changes. For example, costs that would be incurred beyond the 

projection window would be more transparent. However, present value 

estimates are sensitive to such assumptions as discount rates, which could 

make this type of estimate vulnerable to gaming. In addition, by its very 

nature, present value removes timing from an estimate, but sometimes the 

timing and path of spending and revenues is important. For example, such 

estimates would be more important for items where the “cost” escalates 

after the customary cost projection period. 

One participant expressed the view that a temptation would exist to make 

heroic assumptions of long-term savings as a way to counter near-term 

costs. This participant cited a proposal that reduced federal spending for 

6

 CBO is required to present year-by-year estimates in nominal dollars for a proposal’s 

budgetary effects over a time frame of 5 years or more, and these estimates (scoring) are 

customarily used in the congressional budget process. 

7

 In essence, a present value estimate can be understood as the amount of money that would 

need to be invested today at a given discount rate in order to pay for the legislative change 

over the time frame. 

Page 30 GAO-05-282SP CG Forum 
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How Can We Change the Conversation About


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military retirement in the out-years. The proposal was enacted but the 

provisions that would have yielded savings were repealed before they took 

effect. A present value estimate of that proposal would have booked longterm savings that were never realized. A second participant supported the 

present value approach but added that it would be difficult to build political 

risk into the discount rate chosen for the calculation. This participant 

suggested viewing present value estimates as instructive, but not definitive. 

As an alternative, one participant suggested requiring CBO to show the 

additional interest costs incurred over the 10-year window that would 

result from enacting a given legislative proposal. 

Participants held divergent views about the use of present value estimates 

for Social Security reform proposals as a supplement to customary 

estimates. Reform proposals such as those with individual accounts may 

raise short-term costs in order to reduce long-term obligations, some 

participants noted. In such cases, a present value estimate may show the 

reform change as beneficial relative to a baseline over a long time frame, 

but the estimate will not show the higher spending needed in the short 

term. One participant favored this type of estimate, noting that it involves 

converting the future Social Security debt implied by current-law promises 

into explicit debt. Another participant expressed the view that in practice 

this conversion of a federal commitment (i.e., an expectation of future 

spending) into an explicit liability could have the effect of making future 

program changes more difficult. A third participant agreed that the use of 

present value estimates for Social Security reform proposals presented an 

opportunity and a risk. 

One participant pointed to an example of budget process change from 

abroad that might help change the conversation about the long-term fiscal 

challenge. This change involves preparing a “pre-budget” report showing 

how aggregate budget totals link to the macroeconomy, not to programs. 

Countries including the United Kingdom had found this simple reform was 

an effective way to change the conversation and prompt debate, this 

participant said. 

One participant suggested applying provisions of the Sarbanes-Oxley 

legislation, which sought to improve accounting for private business 

operations, to the federal government as one approach to increasing the 

integrity of the federal budget process. Another participant noted that the 

legislation requires the chief executive officer of a private firm to certify its 

financial statements, but it was not clear who in the federal government 

Page 31 GAO-05-282SP CG Forum 
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How Can We Change the Conversation About


the Long-Term Fiscal Challenge?


should do this. The President was the logical choice, but this could raise 

constitutional issues. 

Mr. Walker called attention to the fact that Sarbanes-Oxley sought to 

remedy deficiencies in financial reporting, not budgeting. He added that 

the Federal Accounting Standards Advisory Board (FASAB) is currently 

considering how the intergenerational aspects of the federal government’s 

existing policies and programs could be better presented in the U.S. 

Consolidated Financial Statements. 

Finally, some participants noted that health care spending—the largest 

component of the long-term fiscal challenge—would be particularly 

difficult to address through budget process changes. One participant also 

questioned how present value scoring would work in evaluating proposed 

changes to Medicare. Since perpetual spending growth is clearly 

unsustainable—at some point Medicare spending would absorb the entire 

economy—current estimates assume an eventual slowdown that is 

contrary to historical experience. The timing and rate of this slowdown, in 

the view of this participant, are essentially arbitrary. This participant 

suggested having a 60-vote point of order against any legislative change 

that would increase federal health spending, thereby “making an infinitely 

large number larger.” 

Another participant noted that last year when the Medicare Trustees 

Report was published, media reports focused on the deterioration of the 

financial condition of the Hospital Insurance (HI) trust fund as measured 

by the estimated exhaustion date of the fund.8 The Office of Management 

and Budget (OMB), CBO, and GAO have all noted that this focus can be 

viewed as misplaced. This participant noted that a more important change 

between the 2003 and 2004 Trustees’ estimates of future Medicare spending 

concerned the increase due to the drug benefit enacted in the Medicare 

Prescription Drug, Improvement, and Modernization Act of 2003, which 

added $8.1 trillion to new federal commitments. However, the financial 

condition of HI gets attention because of the focus on trust fund solvency. 

At the same time, the signal provided by future trust fund exhaustion, 

however, does get attention and can serve to promote fiscal discipline in 

8

 The 2004 Medicare Trustees Report stated that the projected exhaustion date for the HI 

Trust Fund had moved to 2019 from 2026 in the previous year’s estimate. The HI trust fund 

pays for inpatient hospital stays, skilled nursing care, hospice, and certain home health 

services. 

Page 32 GAO-05-282SP CG Forum 
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the HI part of Medicare. This participant further noted that no similar 

signaling mechanism existed for the nonhospital portion of Medicare, 

which is funded by the Supplementary Medical Insurance (SMI) trust fund.9 

Some participants suggested the budget process itself needed broader 

institutional reform. The process needs greater integrity, it needs to set 

priorities, and it needs to incorporate a sense of intergenerational equity, 

which is a key value for the public. Institutional reform was needed to 

restore credibility to the budget process. One participant characterized the 

current budget process as one of “gridlock”; as a result, Congress has no 

time for oversight. Biennial budgeting10 might be one approach to making 

oversight possible again, this participant suggested. 

9

 The SMI trust fund pays for physician and outpatient hospital services, diagnostic tests, 

and certain other medical services and supplies. The Medicare drug benefit enacted in the 

Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and scheduled to 

begin in 2006 will be funded by an account in the SMI trust fund. 

10 Under this reform, appropriations bills would be enacted every other year, with the idea 

that authorizing committees would conduct oversight and review in the alternate years. 

Page 33 GAO-05-282SP CG Forum 
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the Long-Term Fiscal Challenge?


Federal Trust Funds 

Many forum participants noted that federal trust fund accounting is confusing and misleading, creating serious transparency and 

integrity issues in connection with financial reporting and budget matters. For example, the amount the federal government owes a trust 

fund is not considered a liability of the federal government under current federal accounting standards because it is a claim of one part 

of the government against another. 

Unlike a private trust fund manager, the federal government both owns the assets of most trust funds and can, through legislation, raise 

or lower fund collections or payments, or alter the purposes of the trust fund. Also unlike a private trust fund, which can set aside 

money for the future, federal trust funds are simply budget and accounting mechanisms for the budget as a whole. They record receipts 

and expenditures earmarked for specific purposes. 

When a federal trust fund such as the Old-Age and Survivors Disability Insurance (OASDI) trust funds for Social Security or the 

Medicare HI trust fund runs a surplus of payroll tax revenues over benefit payments, that surplus is invested in special, nonmarketable 

U.S. Treasury securities that are guaranteed for principal and interest by the full faith and credit of the U.S. government, and the cash is 

used to meet current needs of the government. When a federal trust fund runs a cash deficit, as the HI trust fund did between 1992 and 

1998 and again in 2004, it redeems these securities to pay benefit costs that exceed current payroll tax receipts. However, in order to 

redeem these securities, the government as a whole must come up with cash by increasing taxes, lower spending, increased borrowing 

from the public, retiring less debt (if the total unified budget is in surplus), or some combination thereof. 

While the special Treasury securities in a trust fund do not have any current effect on the economy, they do have legal implications for 

the trust fund’s capacity to pay benefits. Projections of trust fund exhaustion may receive media attention because projected trust fund 

exhaustion has historically been perceived as the primary action-forcing event. An exclusive focus on these projections, however, 

misses the point. From a macro perspective, the critical question is not how much a trust fund has in assets but whether the 

government as a whole has the economic capacity to finance the trust fund’s claims to pay benefits both now and in the future and at 

what cost as it relates to other competing claims for scarce resources. 

While projections of trust fund balances provide information on program solvency, they do not provide information on sustainability, that 

is, the capacity of the budget and the economy to pay benefits. In some cases trust funds may provide a vital signal of imbalances in 

the long term. A shortfall between the long-term projected fund balance and projected costs can signal that the fund, either by design 

or because of changes in circumstances, is collecting insufficient monies to finance future payments. This signaling device can 

eventually prompt policymakers to action. Trust funds for payroll tax-funded programs such as Social Security and Medicare HI can 

serve as a signal to policymakers in this way. 

In other cases, the trust fund mechanism may provide no warning signals. For example, unlike the OASDI and HI trust funds, 

Medicare’s SMI trust fund is financed not by payroll tax revenues but by a combination of beneficiary premiums and general revenue. 

Under the legislative formulas governing SMI financing, the SMI trust fund can never be exhausted because general revenue will always 

fill the gap between payments and premium revenues. 

As a result, there is no signal or “speed bump” provided by the trust fund mechanism for SMI. The Medicare Prescription Drug, 

Improvement, and Modernization Act of 2003 included a provision that focuses on monitoring the share of total Medicare spending 

financed by general revenues. Under certain circumstances, the Medicare Trustees are required to warn the President and Congress if 

the general revenue share is projected to be above a certain level. Where this is the case, the President is required to make a 

legislative proposal to address “excess general revenue” in Medicare, and Congress must consider the proposal. 

Page 34 GAO-05-282SP CG Forum 
Section 3 

The Way Forward: A Process Needs to Be Put 

in Place to Address the Long-Term Fiscal 

Challenge 

Taken together, participants’ comments throughout the forum suggested 

that efforts to address the long-term fiscal challenge will need to proceed in 

discrete steps rather than as a single or one-step solution. Time will be 

needed to change the conversation about the long-term fiscal challenge. 

The disconnect between public perceptions of the challenge and the risk it 

poses to the nation and Americans in the future will need to be bridged. 

Leadership from many sectors of society will be needed to start the process 

of addressing the challenge. 

As many participants observed, contrary to public perceptions, health care 

is the biggest driver of the long-term fiscal challenge while Social Security 

is a relatively small part. For example, one participant noted that while 

Social Security in its current form will grow from 4.3 percent of GDP today 

to 6.6 percent in 2075, Medicare’s burden on the economy will quintuple— 

from 2.7 percent to 13.3 percent of the economy.

1

 Social Security also 

differs from health care in that many specific solutions have already been 

articulated for program reform. For that reason, in the words of one 

participant, it might be easier to begin with Social Security since it should 

be possible to bring groups together to discuss and agree on Social 

Security, it could be a “confidence builder.” 

Once Social Security has been reformed in a way that improves the long

term fiscal outlook, the nation can turn its attention to the more difficult 

problem of escalating health care costs, some participants noted. 

Addressing federal programs such as Medicare and the federal-state 

Medicaid program will need to involve change in the health care system of 

which they are a part—not just within federal programs. This will be a 

societal challenge that will affect all age groups. Because health care is so 

complex, solutions to health care cost growth are likely to be incremental 

and require extensive efforts over time. 

In discussions throughout the forum, many participants drew on history for 

lessons that can help us move forward. Citing events from the 1980s and 

1990s in support of their views, participants seemed agreed that further 

study of this history had the potential to yield useful lessons for the future. 

While participants did not know when a failure to address the long-term 

fiscal challenge might turn into a crisis, they were agreed that the time to 

begin is now. One participant called for the establishment of a working 

1

 Under the Social Security Trustees’ 2004 intermediate estimates. 

Page 35 GAO-05-282SP CG Forum 
Section 3


The Way Forward: A Process Needs to Be Put


in Place to Address the Long-Term Fiscal 


Challenge


group that would build on forum discussions, for example, by developing a 

media strategy and doing outreach to various publics. 

Participants emphasized the need in these efforts to “link the long term to 

the here and now.” The costs of waiting need to be made more transparent 

to the public. One approach would be to sketch out the kinds of potential 

“hard landings” for the federal budget, the economy, and the nation that 

will result if the long-term fiscal challenge is not effectively addressed. As 

the budget squeeze tightens in coming years, leaders and the public will 

increasingly be confronted by the need to make trade-offs. 

This forum built on other meetings on the long-term fiscal challenge by 

moving beyond problem definition to a search for new ways to prompt and 

inform a much-needed national debate. 

In bringing their professional expertise and perspectives to bear on how to 

better communicate the long-term fiscal challenge to the public, 

participants expressed a shared concern that the stakes of this endeavor 

are high. Building support for addressing these issues is a daunting, but 

critically important, challenge—one that will entail the involvement of a 

wide range of stakeholders, professionals, and leaders at all levels of our 

society throughout the nation. Budget experts and groups both in and 

outside of government will be essential to sustaining information and 

momentum, but clearly the circle of engagement and language of debate 

needs to be broadened for timely action and change to occur. The issues 

raised by the long-term fiscal challenge are issues of significance that affect 

every American. As the forum ended, a number of participants agreed to 

get together in the future to continue efforts at public education and public 

engagement to elevate understanding of the long-term fiscal challenge and 

what it will mean for both individuals and the nation. 

Page 36 GAO-05-282SP CG Forum 
Appendix I 

Forum Agenda	

The Long-term Fiscal Thursday, December 2, 2004 

Challenge 

Agenda 

8:30 Coffee, continental breakfast 

8:45 David M. Walker, Comptroller General of the United States 

Opening: Welcome, Charge to the Group, Overview—Presentation, 

Reactions & Interaction 

Doug Holtz-Eakin, Director, CBO, and others 

Nancy Belden, American Association for Public Opinion Research, will 

present some baseline information on what the public knows & how it 

sees the long-term fiscal challenge. 

9:15 The Press and Other Media 

David Wessel, Wall Street Journal, Steve Winn, Kansas City Star, and 

Walter Shapiro, USA Today, will lead off a discussion on why this issue 

generally doesn’t get coverage and the reactions they get when it does. 

10:15 Break 

10:30 Changing the Conversation 

Daniel Yankelovich, Viewpoint Learning, and Ruth Wooden, Public 

Agenda, will kick off a discussion of how to involve the public(s) and 

decision makers in a conversation that moves us forward. The 

discussion could deal with questions such as: 

•How could the nation be moved toward a dialogue recognizing the 

kinds and types of choices that will be needed and why they are 

needed now? 

•Where/how do we start to change the conversation? What kind of 

processes can work? How can the conversation be structured to 

reach across groups—the elderly, young workers, labor, business? 

Page 37 GAO-05-282SP CG Forum 
Appendix I 

Forum Agenda 

How can the issues be presented so the problem doesn’t feel 

overwhelming or insoluble? 

•What are some innovative approaches to conveying the nature and 

magnitude of the challenge and opening up the public’s window so 

they see the relationship between today’s decisions and the 

crisis/problems of tomorrow? What “metrics” work for 

communicating? 

• What is the role of the media? 

The aim is to identify types of change processes and media strategies that 

can lead to new public judgments on the issues. 

11:45 Break—Pick up Lunch 

12:00

Working Lunch: What changes in the budget process would help facilitate 

action? Is the role of the process to shape the debate, to enforce decisions, 

to drive decisions, to “protect” decision makers? 

Former CBO Directors Alice Rivlin, Rudy Penner, and Ned Gramlich will 

kick off this discussion. 

1:00 Break 

1:15 Formal Education: High School and College 

Muriel Siebert, President, Muriel Siebert & Co., and Dan Palazzolo, 

Associate Professor of Political Science, University of Richmond, will lead 

off a discussion on the potential role of formal education in changing the 

conversation. 

2:00 Wrap–up 

What have we learned? Where do we go from here? What are the next 

steps? 

2:30 Adjourn 

Page 38 GAO-05-282SP CG Forum 
Appendix II 

Forum Participants	

The Long-Term Fiscal Thursday, December 2, 2004 

Challenge 

Moderator

David M. Walker 

Comptroller General of the United States 

U.S. Government Accountability Office 

Participants

David M. Abshire 

President, Center for the Study of the Presidency 

President, Richard Lounsbery Foundation 

Joseph Applebaum 

Chief Actuary, U.S. Government Accountability Office 

Nancy Belden 

Partner, Belden Russonello & Stewart 

President, American Association for Public Opinion Research 

Robert Bixby 

Executive Director, The Concord Coalition 

Jón R. Blöndal 

Deputy Head, Budgeting and Management Division	

Organization for Economic Cooperation and Development (OECD)	

Joshua Bolten 

Director, Office of Management and Budget 

Kelvin Boston 

Executive Producer, Moneywise PBS Series 

Karlyn Bowman 

Resident Fellow, American Enterprise Institute 

Charles A. Bowsher 

Retired Comptroller General—GAO 

Stuart Butler 

The Heritage Foundation 

Page 39 GAO-05-282SP CG Forum 
Appendix II


Forum Participants


David Certner 

Director of Federal Affairs, AARP 

Timothy B. Clark 

Editor and President, Government Executive Magazine 

Stan Collender 

Managing Director, Financial Dynamics 

G. Edward DeSeve 

National Academy of Public Administration 

James C. “Chip” Di Paula, Jr. 

Secretary, Maryland Department of Budget & Management 

Gene Dodaro 

Chief Operating Officer	

U.S. Government Accountability Office	

Bill Dudley 

Chief U.S. Economist, Goldman Sachs 

Chris Edwards 

Director of Tax Policy, Cato Institute 

Cindy Fagnoni 

Managing Director, Education, Workforce, and Income Security 

U.S. Government Accountability Office 

Scott Farrow 

Chief Economist, U.S. Government Accountability Office 

Peter R. Fisher 

Managing Director, BlackRock 

Mark Funkhouser 

City Auditor, Kansas City, Missouri 

Edward M. Gramlich 

Federal Reserve Board 

Page 40 GAO-05-282SP CG Forum 
Appendix II


Forum Participants


Bob Greenstein 

Executive Director, Center on Budget and Policy Priorities 

John Hamre 

President, Center for Strategic and International Studies 

Sallyanne Harper 

Chief Administrative Officer and Chief Financial Officer 

U.S. Government Accountability Office 

Bill Hoagland 

Senior Advisor to the Senate Majority Leader 

Douglas Holtz-Eakin 

Director, Congressional Budget Office 

Susan Irving 

Director, Federal Budget Analysis	

U.S. Government Accountability Office	

Richard Jackson 

Senior Fellow and Director, Global Aging Initiative 

Center for Strategic and International Studies 

Thomas Kahn 

Minority Staff Director, House Budget Committee 

Marjorie Kanof 

Managing Director, Health Care	

U.S. Government Accountability Office	

C. Morgan Kinghorn 

President, National Academy of Public Administration 

Nancy Kingsbury 

Managing Director, Applied Research and Methods 

U.S. Government Accountability Office 

Charles Kolb 

President, Committee for Economic Development 

Page 41 GAO-05-282SP CG Forum 
Appendix II


Forum Participants


Ed Lorenzen 

Executive Director, Centrists.Org 

Carolyn J. Lukensmeyer, Ph.D. 

President and Founder, AmericaSpeaks 

Maya MacGuineas 

President, Committee for a Responsible Federal Budget 

Tom McCool 

Managing Director, Financial Markets and Community Investment 

U.S. Government Accountability Office 

Ken Mead 

Inspector General, U.S. Department of Transportation 

J. Christopher Mihm 

Managing Director, Strategic Issues 

U.S. Government Accountability Office 

Daniel Mulhollan 

Director, Congressional Research Service 

Van Doorn Ooms 

Senior Fellow, Committee for Economic Development 

Daniel J. Palazzolo 

Associate Professor of Political Science, University of Richmond 

John L. Palmer 

Professor, Syracuse University 

Public Trustee for Medicare and Social Security 

Rudy Penner 

Senior Fellow, The Urban Institute 

Tim Penny 

Senior Fellow, Hubert H. Humphrey Institute of Public Affairs 

Peter G. Peterson 

Chairman, The Blackstone Group 

Page 42 GAO-05-282SP CG Forum 
Appendix II


Forum Participants


Paul L. Posner 

Managing Director, Federal Budget and Intergovernmental Relations 

U.S. Government Accountability Office 

Alice M. Rivlin 

Senior Fellow, Brookings Institution 

Walter Shapiro 

Columnist, USA Today 

Muriel Siebert 

President, Muriel Siebert & Co. 

Barry R. Snyder 

Inspector General, Federal Reserve Board 

Elmer Staats 

Retired Comptroller General—GAO 

Jeffrey Steinhoff 

Managing Director, Financial Management and Assurance 

U.S. Government Accountability Office 

Eugene Steuerle 

Senior Fellow, The Urban Institute 

Susan Tanaka 

Independent Consultant 

Sheila A. Weinberg 

Founder & CEO, Institute for Truth in Accounting 

David Wessel 

Deputy Bureau Chief, Washington Bureau	

The Wall Street Journal


Steve Winn


Deputy Editorial Page Editor, The Kansas City Star


Ruth Wooden 

President, Public Agenda 

Page 43 GAO-05-282SP CG Forum 
Appendix II


Forum Participants


Paul A. Volcker 

Dan Yankelovich 

Chairman, Viewpoint Learning 

Chairman, Public Agenda 

Page 44 GAO-05-282SP CG Forum 
Appendix III 

The Nation’s Growing Fiscal Imbalance: 

“Saving Our Future” 

Page 45 GAO-05-282SP CG Forum 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


Defense Social Security 

Net interest 

Medicare & Medicaid 

All other spending 

*Current services estimate. 

Note: Numbers may not add to 100 percent due to roundi ng. 

Source: Budget of the United States Governm ent, Fiscal Year 2005 (February 2004)and Budget of the United 

States Government, Fiscal Year 2005, Mid-session Review (July 2004), Office of Management and Budget. 

1964 1984 2004* 

Composition of Federal Spending 

46% 

30% 27%

33% 33% 

7% 13% 7%

9% 20% 

20% 

14% 

21% 

21% 

Page 46 GAO-05-282SP CG Forum 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


Federal Spending for Mandatory and 

Discretionary Programs 

Net Interest Discretionary Mandatory 

*Current services estimate. 

Note: Numbers may not add to 100 percent due to rounding. 

Source: Budget of the United States Government, Fiscal Year 2005 (February 2004) and Budget of the United States Government, Fiscal 

Year 2005, Mid-session Review (July 2004), Office of Management and Budget. 

1984 

42% 

45% 

13% 

2004* 

54% 39% 

7% 

1964 

26% 

67% 

7% 

3 

Page 47 GAO-05-282SP CG Forum 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


4 

$ Billion 

On-Budget Deficit (568) (4.9) 

Social Security Surplus 151 1.3 

Unified Deficit (413) (3.6) 

Fiscal Year 2004 Deficit Numbers 

% of GDP 

Page 48 GAO-05-282SP CG Forum 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


-7 

-6 

-5 

-4 

-3 

-2 

-1 

0 

1 

2 

3 

1962 1965 1970 1975 1980 1985 1990 1995 2000 2004 

Fiscal Years 

On-budget Off-budget Unified 

Surplus or Deficit as a Share of GDP 

Fiscal Years 1962 -2004 

Source: Office of Management and Budget and Congressional Budget Office. 

Percent of GDP 

Page 49 GAO-05-282SP CG Forum 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


Selected Fiscal Exposures: 

Sources and Examples 

(End of 2003)a 

Type Example (dollars in billions) 

Explicit Liabilities	 Publicly held debt ($3,913) 

Military and civilian pension and post-retirement health ($2,857) 

Veterans benefits payable ($955) 

Environmental and disposal liabilities ($250) 

Loan guarantees ($35) 

Explicit Financial Undelivered orders ($596) 

commitments Long-term leases ($47) 

Financial contingencies	 Unadjudicated claims ($9) 

Pension Benefit Guaranty Corporation ($86) 

Other national insurance programs ($7) 

Government corporations e.g., Ginnie Mae 

Exposures implied by current Debt held by government accounts ($2,859)b 

policies or the public's Future Social Security benefit payments ($3,699)c 

expectations about the role Future Medicare Part A benefit payments ($8,236)c 

of government Future Medicare Part B benefit payments ($11,416)c 

Future Medicare Part D benefit payments ($8,119) c 

Life cycle cost including deferred and future maintenance and 

operating costs (amount unknown) 

Government Sponsored Enterprises e.g., Fannie Mae and Freddie Mac a All figures are for end of fiscal year 2003, except Social Security and Medicare estimates, which are end of calendar year 2003. 

b This amount includes $774 billion held by military and civilian pension funds that would offset the explicit liabilities reported by those funds. 

c Figures for Social Security and Medicare are net of debt held by the trust funds ($1,531 billion for Social Security, $256 billion for Medicare Part A, and $24 billion 

for Medicare Part B) and represent net present value estimates over a 75-year period. Over an infinite horizon, the estimate for Social Security would be $10.4 

trillion, $21.8 trillion for Medicare Part A, $23.2 trillion for Medicare Part B, and $16.5 trillion for Medicare Part D. 

Source: GAO analysis of data from the Department of the Treasury, the Office of the Chief Actuary, Social Security Administration, and the Office of the Actuary, 

Centers for Medicare and Medicaid Services. 

Updated 3/30/04. 

Page 50 GAO-05-282SP CG Forum 

6 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


Composition of Spending as a Share of GDP 

Under Baseline Extended 

0 

10 

20 

30 

40 

50 

2003 2015 2030 2040 

Fiscal year 

Percent of GDP 

Net interest Social Security Medicare & Medicaid All other spending 

Revenue 

Notes: In addition to the expiration of tax cuts, revenue as a share of GDP increases through 2014 due to (1) real bracket creep, (2) more 

taxpayers becoming subject to the AMT, and (3) increased revenue from tax-deferred retirement accounts. After 2014, revenue as a share 

of GDP is held constant. Budgetary effects due to passage of the Working Families Tax Relief Act of 2004 are not reflected in this simulation. 

Source: GAO’s September 2004 analysis. 

Page 51 GAO-05-282SP CG Forum 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


0 

10 

20 

30 

40 

50 

2003 2015 2030 2040 

Fiscal year 

Percent of GDP 

Net interest Social Security Medicare & Medicaid All other spending 

Composition of Spending as a Share of GDP 

Assuming Discretionary Spending Grows with GDP After 2004 and All 

Expiring Tax Provisions are Extended 

Revenue 

Notes: Although expiri ng tax provisions are extended, revenue as a share of GDP increases through 2014 due to (1) real bracket 

creep, (2) more taxpayers becomi ng subject to the AMT, and (3) increased revenue from tax-deferred retirement accounts. After 

2014, revenue as a share of GDP is held constant. 

Source: GAO’s September 2004 analysis. 

Page 52 GAO-05-282SP CG Forum 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


Current Fiscal Policy Is Unsustainable 

• The “status quo” is not an option 

•	 Faster economic growth can help, but it cannot solve the 

problem 

•	 Tough choices will be required involving entitlement 

programs, discretionary and other mandatory spending, 

as well as tax policy and enforcement programs 

• The sooner we get started, the better 

Page 53 GAO-05-282SP CG Forum 

9 
Appendix III


The Nation’s Growing Fiscal Imbalance: 


“Saving Our Future”


Today’s Discussion


•	 How can the nation be moved toward a dialogue that recognizes 

the choices that will be needed and the need for action now? 

•	 What are some innovative approaches to conveying the nature, 

timing and magnitude of the fiscal challenge (e.g., per capita, 

relative tax burden, intergenerational impact)? 

•	 What changes in accounting and reporting might help to enhance 

public understanding and promote action (e.g., trust funds, 

burden reporting, tax preferences)? 

•	 What changes in the budget process, mechanisms, or other 

metrics (e.g., discounted present value numbers) would help 

facilitate action? 

•	 What is the role of the media, educators and others in changing 

the conversation? 

• Where do we go from here? 

Page 54 GAO-05-282SP CG Forum 

10 
Appendix IV 

National Saving, the Federal Budget, and the 

Current Account Deficit 

The federal budget deficit and the current account deficit1 are sometimes 

described as “twin deficits” that may pose severe risks to the U.S. economy 

and standard of living if they become too large relative to the economy. 

While the two deficits are connected, they differ in many important 

respects. 

The two deficits have a relationship to each other through their 

relationship to national saving and to investment. 

Investment = National Saving + Current Account Deficit 

National saving together with any borrowing from abroad (equal to the 

current account deficit) provide the resources for investment that can 

boost productivity and lead to higher economic growth and future living 

standards. 

What is national saving? It is the portion of a nation’s income not used for 

consumption during a given period. National saving is defined as the sum 

of private saving, that is, saving by households and businesses, and 

government saving. Federal budget surpluses represent government 

saving, and federal budget deficits represent dissaving. Accordingly, 

federal surpluses or deficits affect the level of national saving. 

In recent years, personal saving by households has reached record lows 

while at the same time the federal budget deficit has climbed. Accordingly, 

national saving has diminished but the economy has continued to grow in 

part because more and better investments were made. That is, each dollar 

saved bought more investment goods and a greater share of saving was 

invested in highly productive information technology. The economy has 

also continued to grow because the United States was able to invest more 

than it saved by borrowing abroad, that is, by running a current account 

deficit. However, a portion of the income generated by foreign-owned 

assets in the United States must be paid to foreign lenders. National saving 

is the only way a country can have its capital and own it too. 

While the federal budget and current account deficits are linked, they may 

or may not move in the same direction and budget deficits are not 

1

 Technically, the current account is defined as a net measure of U.S. international 

transactions in goods, services, investment income, and unilateral transfers. The current 

account is broader in coverage than the trade balance. 

Page 55 GAO-05-282SP CG Forum 
Appendix IV


National Saving, the Federal Budget, and the 


Current Account Deficit


necessarily the source of trade deficits. In the 1980s and during the 2001 

recession, the two deficits both increased, but in the last half of the 1990s, 

the federal budget improved while the current account deficit continued to 

grow. The two deficits can move independently because the international 

capital flows that drive the trade deficit depend on factors beside the U.S. 

federal budget deficit. For example, during the last half of the 1990s, the 

rise in U.S. productivity made U.S. assets more attractive, drawing private 

capital from abroad. Since 2001 capital inflows have come increasingly 

from official sources, primarily from Asian countries purchasing U.S. 

assets to mitigate or prevent their currencies from appreciating against the 

dollar. During this period, federal budget deficits have risen. 

Another key difference between the federal budget deficit and the current 

account deficit is that in the long-term economists believe the current 

account deficit will eventually correct itself as markets seek a new 

equilibrium. Continued large-scale current account deficits could trigger 

equilibrating, and potentially dislocating, changes in prices, interest rates, 

and exchange rates as the adjustment occurs. In contrast, there are no 

similar self-correcting mechanisms for federal budget deficits. 

The persistent U.S. current account deficits of recent years have translated 

into a rising level of indebtedness to other countries. However, many other 

nations currently financing investment in the United States also will face 

aging populations and declining national saving, so relying on foreign 

savings to finance a large share of U.S. domestic investment or federal 

borrowing is not a viable strategy for the long run. 

Page 56 GAO-05-282SP CG Forum 
Appendix V 

The Long-Term Fiscal Challenge = A LongTerm Public Opinion Challenge 

The Long-term 


Fiscal Challenge 


=


A Long-term 


Public Opinion Challenge


Nancy Belden 

President, American Association for Public Opinion Research 

Belden Russonello & Stewart, Washington, DC 

nancybelden@brspoll.com 

Page 57 GAO-05-282SP CG Forum 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Two drivers for 


changing public policies:


Political will


Public will


Belden Russonello & Stewart 

Page 58 GAO-05-282SP CG Forum 

2 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Currents of public opinion 

• Dim view of the deficit. 

•	 But deficit not highly salient and not 

understood. 

•	 Tax cuts are hard to take back but not in 

demand. 

•	 Desire for spending on important priorities, 

e.g., Medicare, Social Security, education. 

Belden Russonello & Stewart 

Page 59 GAO-05-282SP CG Forum 

3 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


The public takes a dim view 


of deficits and is worried.


Signs point to an economy that is going: 

•	 to be in trouble – jobs are moving over­ seas, budget deficit growing, too many 

jobs w/o health insurance or pensions 

60% 

or 

•	 strong— jobs being created, inflation low, 

the stock market is up 31% 

Belden Russonello & Stewart 

Page 60 GAO-05-282SP CG Forum 

4 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Worried (continued) 

Compared to now, how serious a problem 

will the budget deficit be in the years to 

come: 

• More serious 49% 

• Less 13 

• Same 31 

Belden Russonello & Stewart 

Page 61 GAO-05-282SP CG Forum 

5 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


But not that worried. 

To reduce FBD, would you be 

• Willing to pay more in taxes 34% 

• Not willing 61 

Belden Russonello & Stewart 

Page 62 GAO-05-282SP CG Forum 

6 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Not highly salient, compared to 


other concerns


“Very important” in deciding for whom to vote 

Economy 78% 

Terrorism 77 

Jobs 76 

Education 75 

Iraq 74 

Social security 65 

Moral values 63 

Taxes 59 

Federal budget deficit 57 

Environment 53 

Belden Russonello & Stewart 

Page 63 GAO-05-282SP CG Forum 

7 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Public doesn’t see the need for 


more tax cuts in light of the 


deficit.


•	 Hold off on tax cuts to make 

sure the budget does not go 

into a deeper deficit 69% 

•	 Pass additional tax cuts 

stimulate the economy 24 

Belden Russonello & Stewart 

Page 64 GAO-05-282SP CG Forum 

8 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


And would prefer to balance the 


budget.


If you had to choose, would you prefer 

• Balancing the budget 66% 

• Cutting taxes 31% 

Belden Russonello & Stewart 

Page 65 GAO-05-282SP CG Forum 

9 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


But once given, tax cuts are hard 


to take back.


Given recent events and the need for new 

government spending, the tax cuts that 

have not been phased in yet 

• Should be rolled back 35% 

• Left in place 49% 

Belden Russonello & Stewart 10 

Page 66 GAO-05-282SP CG Forum 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Plus, there is a desire to spend 


on popular programs.


If you had to choose, would you prefer 

• Balancing the budget 44% 

•	 Spending more on education, health 

care and economic development 55% 

Belden Russonello & Stewart 

Page 67 GAO-05-282SP CG Forum 

11 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


This conflict among attitudes on 


balanced budget, taxes and 


spending on popular programs 


makes the FBD an issue that cries out for 


leadership -- to define for the public its 


urgency and implications.


Belden Russonello & Stewart 12 

Page 68 GAO-05-282SP CG Forum 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Citations


Slide 

4. NBC News/Wall Street Journal poll, May 2004. N=1012. 

5. CBS/New York Times poll, March 2004. N=1206. 

6. CBS/New York Times poll, March 2004. N=1206. 

7. Pew Research Center poll, October 2004. N=1568. 

8.	 “How Americans Feel about the Economy, Taxes, and the Budget.” Poll conducted by Mark J. Penn, March 

2002. N=500. 

9. Associated Press poll, November 2004. N=1000. 

10.	 “How Americans Feel about the Economy, Taxes, and the Budget.” Poll conducted by Mark J. Penn, March 

2002. N=500. 

11. Associated Press poll, November 2004. N=1000. 

Belden Russonello & Stewart 

Page 69 GAO-05-282SP CG Forum 

13 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Belden Russonello & Stewart is a research and communications firm providing 

public opinion research and communications strategy to progressive 

organizations, foundations, government and corporations since 1982. 

Belden Russonello & Stewart 

1320 19th Street NW, Suite 700 

Washington, DC 20036 

202.822.6090 www.brspoll.com 

Belden Russonello & Stewart 

Page 70 GAO-05-282SP CG Forum 

14 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Belden Russonello & Stewart 15 

Addendum 

The Deficit and Public Perception 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

1985 1989 1 992 1 998 2 002 2 004 

-$ 4 5 0 

-$ 3 5 0 

-$ 2 5 0 

-$ 1 5 0 

-$ 5 0 

$50 

P e r c ent s a y i ng " m os t i m por ta n t pr obl e m " ( a ) P e r c ent s a y i ng " v er y s e r i ous pr obl em " ( b ) 

D e f i c i t ( b illio n s o f d o lla r s ) ( c ) 

Page 71 GAO-05-282SP CG Forum 
Appendix V


The Long-Term Fiscal Challenge = A Long-


Term Public Opinion Challenge


Citations for Addendum Slide 15 

a.	 The Pew Research Center for the People & the Press. Feb. 1989, Jan. 1992, May 1998, March 2002, and 

Nov. 2004. What do you think is the most important problem facing the country today? 

b.	 Gallup Organization. April 1985, Jan. 1989, Jan. 1998, and Sept. 1992. In your opinion, is the current Federal 

budget deficit a very serious problem for the country, a fairly serious problem, not a serious problem, or is this 

something you haven’t thought much about? CBS News/New York Times Poll. March 2004. How serious a 

problem do you think the budget deficit is for the country right now – very serious, somewhat serious, not too 

serious, or not at all serious? 

c.	 The Budget and Economic Outlook: Fiscal Years 2005-2014. Released January 26, 2004. 

http://www.cbo.gov 

Note: 2002 data for question “b” is estimated. 

Belden Russonello & Stewart 16 

Page 72 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

1

Rethinking Public Engagement 

and Countering Mistrust 

Presented by Daniel Yankelovich and Ruth Wooden 

to 

GAO Comptroller General Forum on the Long-Term Fiscal Challenge 

December 2, 2004 

© Viewpoint Learning 

www.ViewpointLearning.com 

Page 73 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

2

Recent history 

� Three major waves of mistrust in the past 70 

years 

» The Great Depression 

» Mistrust in the 1970’s 

» The current wave 

Page 74 GAO-05-282SP CG Forum 
Appendix VI

Rethinking Public Engagement and 

Countering Mistrust

Page 75 GAO-05-282SP CG Forum

3

A wide - and serious - disconnect

between citizens and leaders

What citizens see

l “Black box” of budgeting

and decision-making

l Powerful special interests

and partisanship

l Little of value being done to

address challenges

l Experts are running the

show

What leaders see

l People “wanting it all” but

unwilling to pay for it

l An uninformed public that

has little of value to offer

policy making

l Apathetic citizens who do

not want to be engaged

l Activists hijack all attempts

at public dialogue
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

4 

Characteristics of a disengaged public 

� Inattentive 

� Little apparent common ground 

� Dominated by wishful thinking 

� Mistrustful and suspicious 

� Focused more on self than community 

� Haven’t done hard thinking 

� Attitudes inconsistent and contradictory 

� Media perpetuate the state of raw opinion 

Page 76 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

5 

New engagement strategies 

1. Broaden existing model of public engagement 

and how to research it 

2. Counterbalance adversarial strategies with 

dialogue-based ones 

3. Build “stewardship bridge” to the public 

4. Develop a new kind of communication program 

Page 77 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

6

Thoughtful

Public

Engagement

+ Information

The existing model of public

engagement

1. Broaden the model

Unorganized

Public Opinion

• Inconsistent

• Unstable

• Consequences

unclear

Page 78 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

7 

Wishful

thinking

confronted

Stages

Thoughtful

Public

Engagement

Multiple

framings

+

Information

A broader model of public engagement

Values-based

choices

Sense of

inclusion

1. Broaden the model

Unorganized

Public Opinion

• Inconsistent

• Unstable

• Consequences

unclear

Page 79 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

8

In contrast to polls and focus groups, new deeper-probing research 

methods help citizens: 

1. Broaden the model 

Dialogue-based research unearths 

public’s post-wishful thinking preferences 

� Absorb pros and cons of choices 

� Wrestle with painful tradeoffs 

� Connect the dots 

� Hear other points of view 

� Clarify core values 

� Overcome wishful thinking 

Page 80 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

9

Unlike adversarial strategies, dialogue can: 

2. Dialogue-based strategy 

Dialogue is a surprisingly effective 

strategy for building engagement 

� Create trust 

� Discover common ground 

� Generate ownership/identification 

� Resolve framework conflicts 

Page 81 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

10

When to use dialogue 

� Mistrust blocks agreement 

� Differing frameworks lead to misunderstanding 

� Isolation from other points of view can blind-side you 

� Changes are needed in the climate of moral values 

� Dealing with trends or changes outside the comfort zone 

2. Dialogue-based strategy 

Use dialogue when simpler approaches don’t 

work, for example when: 

Page 82 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

11

Stewardship bridge 

� The special responsibility that goes with privilege, trust 

and high standing 

� Seen most clearly when violated 

» E.g. Red Cross 

» E.g. Catholic Church 

» E.g. Mutual funds/insurance 

� Performance that meets or exceeds expectations 

3. Stewardship bridge 

Stewardship = moral obligation to leave things in better shape 

Page 83 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

12

3. Stewardship bridge (cont’d) 

10% 

14% 

10% 

18% 

15% 

51% 

61% 

61% 

67% 

71% 

Performance 

Expectation 

GAP: 

56% 

GAP: 

49% 

GAP: 

51% 

GAP: 

47% 

GAP: 

41% 

Set up oil spill 

response mechanisms 

Make us less dependent 

on foreign oil 

Reduce threat to 

groundwater 

Reduce toxic 

emissions 

Inform public about plans 

to protect the environment 

An example of the “stewardship gap” 

A pipeline company (mid-1990s) 

A good steward would: 

3. Stewardship bridge 

Page 84 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

13

Materials for 

media 

• news 

• entertainment 

• online 

“Meeting in a box” 

materials for civic + organizations

Leaders absorb public’s: 

• Post-wishful thinking preferences 

• Value criteria 

• Framework and language 

• Stages (if appropriate) 

Leadership communication 

initiatives 

Build on deeper-probing research 

4. Communication program 

Dialogue-based research 

Outcome: 

Active public engagement 

BUZZ 

Page 85 GAO-05-282SP CG Forum 
Appendix VI 

Rethinking Public Engagement and 

Countering Mistrust 

14

Conclusion 

To break through the crust of 

mistrust, leaders must rethink 

citizen engagement in farreaching new ways 

(450377) Page 86 GAO-05-282SP CG Forum 
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