Billionaire’s foundation sets sights on fiscal crisis

Billionaire investor Pete Peterson and former Comptroller General David Walker are taking aim at elected officials, business leaders and the public to gin up support for painful reforms they say are needed to prevent America from falling off its perch at the top of the world economy.

The Peter G. Peterson Foundation, with Walker as its president and CEO, has big plans to try to influence the positions of Congress and presidential candidates John McCain and Barack Obama on tough issues like tax and entitlement reform. But more important, they said at a breakfast Wednesday sponsored by The Christian Science Monitor, is getting the public and the business community on board.

{mosads}“We think the pressure has to come from outside the Beltway,” Walker said. The business community has so far been missing in action, said Peterson, co-founder of the Blackstone Group.

Walker and his colleagues at the foundation plan to issue analyses of McCain’s and Obama’s positions on fiscal issues after the Republican and Democratic candidates emerge from their nominating conventions this summer.

They met with senior congressional leaders last month, Peterson said, and Walker has testified on fiscal issues before the House Budget Committee.

The underlying message of the campaign is as direct as it is grave: The U.S. budget deficit and national debt are growing too large, too fast, and threaten to devastate the economy. “I assure you, it isn’t too long until we start looking like a developing country,” Peterson said.

The U.S. government is in debt to the tune of $53 trillion, or $455,000 per household, Walker said. Because the median household earns less than $50,000 a year, “It’s like every American household has an implicit mortgage of nine and a half times their annual income but no house to back it up,” Walker said.

“The good news is, we actually believe we can solve the problem,” he said.

The solution, he said, is to be realistic about recognizing that sacrifices must be made on sacred cows like entitlement benefits and tax preferences in order to bring balance back to the budget. Everything must be on the table, including Social Security, Medicare and tax breaks for corporations and the wealthy.

The Peterson Foundation is about to make its boldest move yet to draw attention to the fiscal crisis facing the country. Next month, it will release a documentary entitled “I.O.U.S.A.” in theaters. Walker said they planned an advance screening for lawmakers and other policymakers Wednesday evening and another for the Washington media next Monday.

“We’ve got an awful lot of money we’re putting against this crisis,” Peterson said. The investment mogul launched his foundation just five months ago, vowing to spend at least $1 billion of the “windfall” he reaped from the initial public offering of his private equity firm.

“Our objective, long-term, would be to create a different kind of special interest: a special interest for the general interest or a special interest for the future or a special interest for our children and grandchildren,” Peterson said.

Big fiscal problems are difficult for politicians to talk about because every entitlement benefit and tax break on the books benefits somebody and those interests will fight hard against taking them away, Walker acknowledged. “I think the future of this country is at risk. I think we have a number of serious sustainability problems that current elected leaders are not taking seriously,” he said.

Walker, who has been touring the country spreading his message about the fiscal crisis, said politicians underestimate the public. “When you state the facts and speak the truth to the American people, they’re a lot smarter than people give them credit for,” Walker said.