Unless drastic changes are made in federal spending and possibly health care reform, the United States could be destined to “become a third-world country.”

After months of study and debate, that was one broad conclusion of the Federal Deficit Task Force created by the American Farm Bureau Federation. The panel focused on the dangers posed by the large projected federal deficits over the next 40 years.

The task force was made up of eight individuals from around the country with a variety of expertise and practical knowledge of both business and agriculture. It included four more experienced members and four farmers and ranchers under age 35 from around the country. Craig Lang, president of the Iowa Farm Bureau Federation, chaired the task force.

The task force presented its policy recommendations during a conference at AFBF’s 91st annual meeting. The proposals focused on the twin problems of the growing national debt and budget deficit. Without attention, the problems will become infinitely more difficult or impossible to solve, task force members believe.

The task force identified four major steps for consideration to achieve the ultimate goal of balancing the budget. First, the federal deficit should be reduced incrementally each year, reaching full balance and debt reduction by 2019. Second, the budget process needs to be reformed to require a two-thirds vote majority to waive any budgetary point of order. Third, federal expenditures on government services must be reduced, or and/or taxes must be increased. Lastly, since deficit reduction is so important for America’s future, all federal expenditures should be considered for reductions — including Agriculture Department programs.

The task force concluded that federal spending is the most critical item that needs to be addressed and must be reined in if the United States is to remain a financially viable country. Federal spending in 2009 has produced a budget deficit of $1.4 trillion, the largest in American history, contributing to a federal debt level today of about $12 trillion, which translates into roughly 85 percent of the nation’s gross domestic product. Further, because of recent tax cuts and the troubled economic conditions, government revenues are around 15 percent of GDP, which is 3.3 percent below the historic average.

Looking into federal spending, the task force examined three priority areas that members felt would have the greatest impact on the government’s ability to reduce the federal deficit — Social Security, Medicare and Medicaid.

Of the three problems, Social Security seems the easiest to solve, according to the task force. Nevertheless, the solutions will still be politically unpopular. For example, making Social Security self-financing is possible by raising the normal retirement age and indexing it to longevity, lowering benefits and increasing the revenue to the trust fund through removing the cap on taxable earnings.

The problems with Medicare and Medicaid are more complex and politically difficult. Increasing health care costs are a major impediment to balancing the budget because they are rising faster than the traditional rate of economic growth. With no changes to health care spending, Medicare and Medicaid would take up all federal revenues by the year 2070, task force members noted.

The group recommended cutting health care spending by implementing a centralized source to coordinate medical records; utilizing incentives for results (not procedures)-increasing preventive care; shortening hospital stays; and limiting government sponsored coverage to only necessary and cost-effective procedures.

“The real problem lies with us. Our politicians have told us what we wanted to hear for too long,” said task force member Johanna Samuelson, a dairy producer and director of a farm credit program in Connecticut. “We’ll need to make sacrifices.”

Speakers also noted the 2010 elections will be critically important. Elected representatives must take the issue of the growing federal deficit seriously and make decisions to correct it, task force members concluded. More information on the Federal Deficit Task Force and related content can be found at http://DeficitTaskForce.fb.org.