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Profession must wield its influence in steering government spending onto a sustainable path.
In 1887, the year the AICPA was founded, federal spending was about 2.5% of annual U.S. economic output. In 2011, federal spending was about 24% of the nation's GDP, and it is on a path to reach 37% of GDP in 2040.
In 1887, the allocation of a vast majority of the government's resources was actually decided by Congress every year. In 2011, less than 40% of the federal budget - the discretionary portion - was actually decided by Congress. The mandatory portion, which includes entitlement programs such as Social Security, Medicare, and Medicaid, was on autopilot.
We've gone from striving to achieve a balanced budget over an economic cycle to $1 trillion-plus annual deficits. And we've gone from a total federal debt-toGDP ratio of about 12.7% in 1887 to more than 100%, and growing rapidly, today.
Our federal financial hole is getting deeper by $3 trillion or more a year, based on the combination of annual deficit spending and increases in future unfunded liabilities to entitlements. Absent meaningful spending or tax reforms to restore fiscal sanity, we are approaching a financial tipping point that requires action to avert a U.S. debt crisis. All the while, our political system has become dysfunctional, dominated by hyperpartisans, ideologues, and career politicians who are more concerned with keeping their jobs than doing their jobs - people who spend too little time addressing the structural challenges that threaten our ship of state.
Washington's myopia and dysfunction do not shock me. But they do deeply disappoint me. During my 37 years as a CPA, including almost 10 years as comptroller general of the United States, I have witnessed the good, the bad, and the ugly in connection with the government's finances. In my roles in government, and as head of two nonprofit organizations concerned with fiscal responsibility issues, I have traveled extensively to discuss the tough choices we must make to put our nation's finances in order. It's a tough message, and one that must be coupled with hope and some sensible, nonpartisan solutions that can gain bipartisan support.
"CPAS HOLD APUBLIC TRUST"
CPAs are uniquely positioned - and have an important obligation - to deliver...