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Checks Unbalanced : THE QUIET SIDE OF PUBLIC SPENDING by Herman B. Leonard (Basic Books: $18.95; 277 pp.) : THE MACHINERY OF GREED: PUBLIC AUTHORITY ABUSE AND WHAT TO DO ABOUT IT by Diana Henriques (DC Heath: $18.95; 156 pp.)

April 27, 1986|Richard D. Lamm | Lamm, governor of Colorado since 1975, has been involved in the national debates about institutional reform, medical ethics and immigration. and

A strong case can be made that history will judge today's generation as prodigal parents. We have not met our obligations to our children; we have inherited abundance but are leaving a legacy of debt. We have allowed our infrastructure to deteriorate and our debts to skyrocket and have turned to "creative financing" to bankroll our excesses. We simply haven't paid our own way.

Two recent books expand on this theme. In "Checks Unbalanced: The Quiet Side of Public Spending," Harvard professor Herman B. Leonard examines the quiet but costly ways in which we have accumulated debt and unfunded liabilities.

Leonard argues that the much-publicized national debt figure of $2 trillion is a fraction of the actual obligation we are leaving our children. For example, Leonard says, obligations future taxpayers will inherit, which don't appear in today's federal deficit figure, include the Social Security system and our military retirement system. Leonard argues that the unfunded liability of Social Security is at least $4 trillion; he says federal civil service retirement programs and military pensions weigh in at another $1 trillion.

According to Leonard, the combined unfunded liabilities for these two programs equal an actual debt of $5,000 for every adult in the United States. Although these are future costs that must be paid, they aren't being discussed as part of the federal budget or the federal debt.

Leonard argues that we "hide" $300 billion in annual federal spending and billions in state spending through tax expenditures and other accounting measures. On top of that, he says, we have allowed America's bridges to disintegrate and the nation's roads and public buildings to deteriorate.

As a result, Leonard says, we put our national budget out of balance. It occurs not only through direct spending but also through liability for future payments: by effectively consuming assets, by not maintaining them and by disbursing money through such methods as tax credits.

He points out we have not set aside money to offset these obligations, but instead have created systems that will hand the bills to future taxpayers.

Leonard feels these quiet expenditures are procedurally improper, because they are outside the appropriate system. He notes they also constitute a fiscal time-bomb, the planting of which our children will resent.

Leonard sets out a series of strategies for making the quiet expenditure programs more audible and more accountable. He argues that basic honesty should require us to impose such accountability. Moreover, he suggests that the very survival of democratic government might be at stake if accountability is not obtained. Thus the book goes to the heart not only of the future fiscal soundness of these systems, but to the role of accountability in democracy.

In "The Machinery of Greed: Public Authority Abuse and What to Do About It," journalist Diana Henriques of the Philadelphia Inquirer examines an aspect of this lack of accountability. She analyzes several of the estimated 7,000 public authorities across the nation that have taxing or bonding authority capable of generating billions of dollars for construction and maintenance of public works projects.

Henriques states that the size of these projects and the number of dollars involved make them vulnerable to abuses ranging from outright fraud to the creation of bureaucratic empires, isolated from the checks and balances we expect within government. She cites a number of case histories in depth.

Henriques also cites Robert Caro's monumental study of Robert Moses in "The Power Broker" as more than an in-depth profile of Moses, who controlled New York public authorities. "The Power Broker," Henriques says, is a study of a type of institution--the public authority--that she says often is manipulated by people far less talented than Moses.

Henriques argues that a wide range of public authorities have been created and often are subject to abuses more troublesome to correct than those found within the traditional political structure, because it is easier to defeat politicians than it is to remove some bureaucrats.

Henriques then sets out suggestions for minimizing such abuses, including a call to the news media to be more attentive to the operations of public authorities, and a suggestion that more abuse controls of the sort common in private business be imposed on authorities.

The greatest dangers to democracy come not in the problems it recognizes, but in the problems it ignores. Both these books attempt to focus light on areas that have been too long in darkness. Both spotlight real and substantial problems we ignore at our peril.

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