Opening Remarks by Hon. David M. Walker, President and CEO – As Prepared For Delivery

2010 Fiscal SummitApril 28, 2010

We are approaching the end of this conference and I want to thank everyone who participated throughout the day, as well as those who helped to make today's Summit a success. We heard many perspectives and opinions from a variety of players across the political spectrum—and that is exactly as it should be. As Americans, we not only speak our minds about governance and policy challenges facing this country, we also understand that freedom of speech is an essential part of our democracy.

As has been discussed, prior to this conference the Peterson Foundation conducted a confidential survey of former top Executive Branch, Congressional and Federal Reserve officials and solicited their views on a range of timely and important fiscal issues. The results were very revealing and of critical importance. These bipartisan top officials from the past several decades reached unanimous agreement that the federal government is on an unsustainable fiscal path. These top economic officials believe that the United States will ultimately face a major economic crisis if we fail to address our structural deficits, mounting debt burdens and imprudent reliance on foreign lenders. There was also a strong bipartisan agreement that "everything must be on the table", including budget controls, social insurance reforms, defense and other spending constraints, and additional revenues.

During this Summit, we heard a number of people re-enforce these important survey findings, including the fact that our real problem is our structural deficits and not our short-term deficit. We heard from Former President Clinton about how he made fiscal responsibility a top priority and achieved real results. President Clinton also reminded us that, while our federal fiscal challenge is huge, most states have own fiscal challenge. In addition, we need to look at how both the executive and legislative branches of government are organized in order to focus more on the future.

We heard that health care costs remain the single largest challenge to our fiscal future. Importantly, there is strong agreement that there are no easy solutions and a range of tough choices will be required if we want our collective future to be better than our past. This includes taking a hard look at the approximate $1 trillion in tax preferences that represent "back door spending". It includes making sure that the government focuses more on the future than the present and past. It also includes recognizing the significant differences in cost of living in different geographic areas of the United States. Finally, the two co-chairs of the President's Fiscal Responsibility and Reform Commission discussed what they plan to do to discharge their responsibilities and help address our federal fiscal challenge. And now, as we are about to leave here, the real work begins. We did not come together just to hear ourselves talk. What brought us to this Summit is a shared sense of urgency. Ever since our founding, America has offered each generation the opportunity for a better life. Now we have put that long standing tradition at risk. Serious structural deficits and mounting debt burdens threaten the future prosperity of our country, its

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position in the world, and the quality of life for our children and grandchildren. This is the challenge that will exist after the economy has fully recovered, after unemployment levels are down, after the wars are over, and long after the financial and housing crises have past.

Our actions in the months and years ahead will either preserve the American Dream for generations to come or further mortgage their future. So we are facing not only an economic challenge, but an ethical and moral challenge as well.

All of us gathered here are committed to meeting those challenges…and I am convinced we will. But the only way this will happen, short of a crippling crisis, is if the first three words in the Constitution come alive. “We the People.”

Many Americans complain about politicians and Washington, but "We the People" are ultimately accountable for what does or does not happen in the nation’s capital. The fact is, we cannot afford a toxic mix of public ignorance and apathy. All our citizens need to become more informed and involved if we are to accelerate the transformational reforms that are so necessary to put us on a more prudent and sustainable path.

To make that happen, we need to lay out the facts to the American people, speak the truth, talk about the tough choices we need to make, and explain the absolute necessity of acting sooner rather than later. It will take capable and credible people engaging with representative groups of Americans across the country.

At the same time, those in positions of power and influence must listen to the American people and learn from them. Washington “experts” don’t have all the answers, not by a long stretch. Our policymakers need to benefit from the ideas, experiences and perspectives of citizens across the country. That is how we will fashion policies that truly address the concerns and priorities of those who actually pay the nation’s bills. This citizen education and engagement effort should be conducted in selected cities around the country, and shared from coast to coast via the latest communication technologies. And it needs to take place soon given the lessons from the mortgage related sub-prime crisis, the recent fiscal warning signs in Europe, and the growing concerns expressed publicly by Americans, our foreign lenders and others.

In this regard, I am pleased to announce that the Peterson Foundation, the MacArthur Foundation and the Kellogg Foundation are partnering to make this need a reality this summer. We are very appreciative that , Mike Stegman, Director, Policy and Housing at the MacArthur Foundation, and Ann Mosle, VP for Programs, at the Kellogg Foundation have joined us here today to demonstrate our shared commitment to this important effort. By pooling our resources, on Saturday, June 26, an unprecedented citizen education and engagement exercise will be conducted that will focus on our federal fiscal challenge.

This national effort will involve representative groups of Americans in 20 cities around the country, all of which will be linked via satellite and the Web. The participants will be provided with the fiscal facts and then asked to express their views on a broad range of reform options. Very importantly, they will also be asked to propose reform packages that will achieve certain longer-term fiscal objectives. After all, failing to effectively address our large and growing structural deficit is simply not an option.

This historic civic exercise will be conducted by AmericaSpeaks, a non-partisan organization with considerable experience and a proven track record in conducting similar forums. Rest assured that the information and options provided in this exercise will be accurate, reasonable and comprehensive. To help ensure this, AmericaSpeaks has engaged several advisory groups, each comprised of individuals that span the political

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and ideological spectrum. I am pleased that Dr. Carolyn Lukensmeyer, CEO of AmericaSpeaks, has also joined us here today.

We are confident that the results of this citizen engagement effort will prove extremely valuable to federal elected officials, the President's Fiscal Responsibility and Reform Commission, the Bipartisan Policy Center's Debt Reduction Task Force, the press, the general public and others. But it’s critical to understand that this effort is not a substitute for a range of citizen education and engagement activities that the two commissions and individual members of Congress should conduct on their own. Only through substantial and sustained outreach beyond Washington's Beltway will we be able to bring about the kinds of reforms that can put this nation back on a path to fiscal sanity. You will hear more about our related efforts in the coming weeks.

Before I conclude my remarks, I would like to ask Mike Stegman, Ann Mosle and Carolyn Lukensmeyer to make some brief remarks regarding our joint effort. (Remarks form Mike, Ann and Carolyn).

Thank you Mike, Ann and Carolyn for those words and for partnering with us on this important initiative. We are all looking forward to June 26.

As this Summit nears its conclusion, there is one more critical ingredient for success that we must acknowledge. We must find ways to bridge the current partisan and ideological divides that have reached epidemic levels in Washington. In the end, the only way to turn ideas into action is to offer non-partisan policy options and non-ideological proposals that can achieve broad bipartisan support. Doing so will require special processes, as well as courage and extraordinary leadership from the President of the United States and key Congressional leaders.

We must not give up hope. All this can happen. Yes, we can still ensure that our collective future is better than our past. And yes, we can achieve fiscal responsibility in a way that ensures social justice. These two key concepts are not mutually exclusive.

We at the Peterson Foundation will do our part. This includes bringing attention to possible solutions, ranging from comprehensive tax and social insurance reforms, to statutory budget controls, to reprioritizing and constraining defense and other spending, especially health care costs. We will also promote efforts to help ensure that elected officials either make the required decisions or are held accountable if they fail to do so. After all, our fiscal clock is ticking and time is not working in our favor.

In closing, the Peterson Foundation is eager to work with all of you as we face up to our nation’s fiscal challenge. Please review the information in today's participant package and encourage others to do so b y going to our web site at www.pgpf.org. If all of us do our part, we can keep America great and preserve the American Dream for future generations. We owe our nation’s founders and our families no less. Let's do it, together!

Thank you and safe travels to all of you.

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