The first to bail out of the car, James Dean’s character, was the “chicken,” but the other man waited too long, got caught in the car, and went over a cliff.

“It’s the same situation in Washington, D.C.,” Webster says. “Many recognize that we are heading towards a cliff, but there is little coordination in action and little regard to the risks generated along the way.”

The “bluff” the U.S. is headed toward would be the national debt. Webster says the national debt, as a percentage of the gross domestic product (GDP), was at an all-time high of 108.6 percent during the apex ofU.S.involvement in World War II.

TheU.S.will hit its WWII record in the mid-2020s before skyrocketing to 344 percent in 2050, placing the nation in the same situation seen in Eurozone countries such as Greece, Italy and Spain. Furthermore, the debts piling up now are for future liabilities and will not be easy to dissipate, unlike during the postwar years.

The challenge will affect Social Security, Medicaid and Medicare programs and trickle down to the increasingly federally-dependent state and local levels of government. State dependence on federally-granted funds almost doubled from 1990 to 2010, with Washington providing 24 percent of state budgets in 2010, up from 18 percent the previous year.

Webster says government agencies will soon be competing for federal money in much the same way private companies compete for profits.

Proactive change is the most effective way to staying ahead of the curve, he says, as opposed to reactive change that takes place during a “burning platform” crisis.

In order to establish a controlled and effective ERM program, the term must be defined within the organization—something not even private-sector executives have been able to accomplish. In last year’s annual Association of Government Accountants’ Chief Financial Officer (CFO) Survey, half of CFO respondents felt that ERM was adequate in their own organizations, although 67 percent said that they had no designated risk-management office or even centralized ERM function.

Webster says most corporations, in his opinion, erroneously define ERM.

“ERM...is an integrated view of the interrelationship of risks across an enterprise, ensuring a strategically aligned portfolio view of risk,” he states, adding that ERM is the “mortar” that binds the chief intelligence officer’s risk and the chief executive officer’s risk, and so on, without replacing those risks or placing them in silos.

Part of the problem, Webster says, is that the federal government’s internal controls work only in a stable environment that assumes tomorrow will look like yesterday. But in today’s volatile environment, he notes, traditionally useful internal controls may not be useful tomorrow.

Changing the federal government’s risk-management approach, Webster says, can either come from top-down leadership, or bottom-up from experts at lower organizational levels.

Top-down leadership initiatives—like former president Bill Clinton’s National Performance Review, former president George W. Bush’s Performance Management Agenda, and President Obama’s establishment of the Federal Chief Performance Officer—wield the power of momentum..

Bottom-up leadership, where leaders at lower organizational levels serve as agents shifting the dialogue from “performance” to “value” within strict budget confines, has the advantage of expertise.

“Bringing risk management and ERM explicitly into the decision-making process will enable more strategic discussion of where and how to improve value, instead of keeping strategy discussion behind closed office doors at the top level,” Webster states.