Auditor says feds' books in bad shape

The nation's budget watchdog on Monday criticized the federal government's financial practices, saying a new Treasury Department annual report wouldn't cut the mustard in the private sector. "If the federal government were a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up," Comptroller David Walker said in a speech at the National Press Club.

As head of the Government Accountability Office, Congress' nonpartisan auditor, Walker said government finances are in such disarray he was unable to sign off on the books. In fact, "for the 11th straight year GAO was unable to express an opinion on the consolidated financial statements of the U.S. government," largely because of "very serious internal control weaknesses," he said.

Walker, a persistent critic of federal fiscal policies, conceded that there has been some good news recently. The nation's short-term budget deficits have been shrinking for three years and are "not unduly troubling as a percentage of our national economy," he said. But the long-term outlook is worse than ever, he said.

"The federal government's total liabilities and unfunded commitments for future benefits payments promised under the current Social Security and Medicare programs are now estimated at $53 trillion, in current dollar terms, up from about $20 trillion in 2000," he said.

"This translates into a de facto mortgage of about $455,000 for every American household, and there's no house to back this mortgage," he said.

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