Congressional Record, Volume 160 Issue 100 (Wednesday, June 25, 2014)

[Congressional Record Volume 160, Number 100 (Wednesday, June 25, 2014)]
[House]
[Pages H5761-H5765]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

TELLING OUR CONSTITUENTS THE TRUTH

The SPEAKER pro tempore (Mr. Collins of New York). Under the
Speaker's announced policy of January 3, 2013, the gentleman from
Arizona (Mr. Schweikert) is recognized for the remainder of the hour.
Mr. SCHWEIKERT. Mr. Speaker, my colleague from Arizona who actually
has an amazing district and was actually an amazing leader when we lost
19 of our firefighters this time last year, I appreciate him putting
that into the Record for all of those in Arizona.
I wanted to do something a little different tonight. A few months
ago, we came to the floor here and sort of walked through what was
really going on in the math. One of the things that sort of enrages me
is so much of the debate we have here in Congress is the noise. We talk
about this issue or that issue when we have the 10,000 pound gorilla in
front of us, and that is what is happening to us fiscally.
Right now, and I am going to be using a lot of numbers tonight, and
we

[[Page H5762]]

are going to try to put up as many of these on our Facebook page and on
our Web site so folks can actually see these charts. First off, if this
were 1 year ago, we were having discussions of what was the fiscal year
2014 deficit going to be, and we had some folks making these optimistic
projections that we were only going to be in the $400-some billion
shortfall that year.

{time} 1815

It is still a stunning amount of money. It has only gotten worse
though. Remember, we were supposed to be on the way out. Employment was
getting better; income was getting better. Taxes are up dramatically in
this country. Remember, we have just hit the alltime high revenues ever
for the United States.
So what could possibly be wrong? Because then, this last April, the
projection of the deficit for this fiscal year was $492 billion, then
in May, it was $648 billion; and with today's news that the first
quarter GDP was down--was negative, went down--our growth and our
economy went down 2.9 percent, that is a stunning amount of GDP to
lose.
We were going to be giddy if we were over 2 percent, and we had a
negative GDP in the first quarter of 2.9 percent.
I am going to make you a projection and a prediction that, when we
end the 2014 fiscal year, we are not going to be much different than we
were last year. So all these discussions of, well, it is getting
better, and the spending and with all these new taxes, the future
fiscal burden we are about to dump on our kids and our grandkids is
going to get better--it is not in the math. It is not showing up.
This is important. I wanted to actually walk through a little reality
check here and to show you how disappointed I am on so much of the
discussion that you will hear here in Washington.
You see the chart next to me. If I came to you right now and said:
tell me what you think the debt and unfunded liabilities are for the
country--now, we can all go to these Web sites where it is the debt
clock, and if you look at it right now, it is going to say: well, the
unfunded liabilities and the debt for the United States are about $127
trillion.
Well, there was a study done--it was done over at George Mason's
Mercatus Center, and it was done at the beginning of the year. The
number is $205 trillion that we are about to dump on the heads of our
kids and our grandkids.
What should terrify you about this number--well, let's find a way to
talk about this. If I said our unfunded liabilities--our debt and the
promises we have made in this government--are at $205 trillion, go on a
search engine right now and search for: What is the entire wealth of
the world?
Mr. Speaker, you are going to pull up estimates that it could be $167
trillion. I saw one that was $180 trillion.
So process this: what we have promised in benefits, promised in
spending, what we have already borrowed is greater than the wealth of
the world today. Process that. If you, right now, grabbed every penny
of the wealth of the world, it would not put enough money in the bank
to cover the promises we have already made as a government.
You have got to understand this. This should be the discussion of our
times, and yet it is uncomfortable. Look, I am in my second term, and
let's have a moment of brutal honesty here: What do most elected
officials--what do we often focus on? Being reelected.
When you stand up in front of a room, the pollsters and the political
consultants often tell us: well, happy talk or talk about something
that is easy because big numbers scare people and, besides that, they
are so negative, you would lose votes.
If you talk about what is happening in the entitlements, if you talk
about $205 trillion being the debt and unfunded liabilities of your
country, Schweikert, you are likely to get unelected.
We have got to step up and start telling the public, telling our
voters, telling our constituents the truth: the single biggest issue
facing your government is the debt and the explosion of the
entitlements.
I am going to spend a little time here talking about what is really
driving this. Just how do you get to this? Part of this is this is what
it would look like if you used honest GAAP accounting.
Now, what is GAAP accounting? So let's put this in perspective. If I
came to you right now, today, and said: all right, the country, we
already know if you go on the debt clocks on the Web, you will see we
are about $17.5 trillion of borrowed money.
About $4 trillion to $5 trillion of that, we borrowed from ourselves,
which we steal out of Social Security, we steal it out of Medicare, but
the $17.5 trillion--but then I come to you, and let's do something that
is simple math.
The Social Security trust fund, with the benefits we have promised
right now, is about $23 trillion underfunded. Okay. So my $17.5
trillion of hard debt right now and the $23 trillion we owe--and if we
were doing GAAP accounting, if we were doing honest mathematical
accounting--like we all learned in, hopefully, accounting classes--you
are looking at $40 trillion that you would put onto this number because
that would be honest.
That $23 trillion that we owe to Social Security beneficiaries, that
we do not have the money, we just pretend, yeah, we owe it, but we are
not going to tell the public about it because it will make them
nervous.
That is the GAAP accounting, so when we start doing the honest
accounting--like every business, every charity would have to do--that
is how you get to real numbers and understand the real situation that
the government, that the people, the beneficiaries, and those in
Congress should be dealing with today.
Mr. Speaker, why is this not working? Why the problem? Let's actually
go to the next chart, and maybe this will sort of help because we have
had so many discussions.
Do you remember all the rhetoric that was around this place before
the 2012 Presidential race and the election, the discussion of how much
better everything was getting, how much better the job situation was
about to get, these debts and deficits will start becoming under
control?
Well, it just wasn't true. The political class, probably for
reelection--heaven knows the President did--we misled the people. We
didn't tell them the truth about basic math.
So what is wrong here? We are going to walk through what is really
going on in these charts, but think about just the last year or two.
What has happened out there when even we have succeeded at getting good
legislation--bipartisan legislation--passed through the House, getting
our brothers and sisters in the Senate to actually work with us, and
getting the President's signature? Something like the JOBS Act, passed
it 3 years ago.
Think about this: little things that were going to help the
individual entrepreneur, like crowdfunding, the reg A, some of the
mechanics in there where we were just trying to help capital formation
for the little guys, for the startup businesses--what happened? They
got lost in the bureaucracy.
Some activists on the left said: oh, we are scared of this, and we
took away the optionality for everyone out there to grow that business
out of their house, out of their garage.
It breaks my heart--something as simple as crowdfunding has now had
so many rules and regs, and it still is in reg writing, even though we
were supposed to have the rules 2 years ago.

Think about it. Even when Congress has gotten it right, this
President and the bureaucracies he controls--he is appointed to--
continue to destroy the optionality that we were trying to give to the
American people to get this government out of their way and start
growing this economy.
Let's take a quick look at this chart--and I am sorry, I know how
hard it is for those folks who might be watching on television or
sitting in the back row or galleries, these are hard to read--but what
is important about this is the blue line here was our projection a year
ago.
We were actually projecting that the deficits and debt were actually
going to get better. Then when we actually had to start doing our
recalculations and realizing the economy is not growing, it is not
producing the economic expansion, the economic wealth that we need in
this country to cover the promises we have made, that became the red
line.

[[Page H5763]]

Now, we need to do the next part of the discussion of what really
goes on in government math. You do realize that government math, the
budget projections, the debt projections that are put out--I am going
to be fairly harsh here--border on fraud.
Here is simply why: this red line is based on current law. Well, you
do realize in current law--something we call the SGR, you will often
hear it as the doc fix--that in about 10-12 years, we expect doctors to
accept 73 percent less to see a Medicare patient. That is the current
law, so that is why this line goes this direction--because we have
these things in law where we expect these fantasies to take place.
Now, the reality of it is: How many of you think a doctor is going to
see a Medicare patient for 73 percent less? It is just not happening.
So we will run here to the floor and say: oh, heavens, we have got to
make sure that our seniors have access to their doctors, we have got to
make sure doctors are at least covering their costs, and we will come
in here, and we will raise that doc fix, that SGR, another year.
One of the reasons it does not happen around this place for the 10
years out or the 20 years--our permanent fix--is because, all of a
sudden, the math changes again, so we get the benefit of fake math. We
know we made the promise that there is going to be this health care
within Medicare.
We put out these fancy charts, and I see some of my brothers and
sisters speechifying with the numbers they are handed. When you start
to grind into what is underlying underneath those numbers we are often
given by the Congressional Budget Office, you start to realize: well,
they say this is based on current law.
You have got to understand, inside that current law are things that
are implausible. Actually, go look at the Medicare actuaries report and
go to the very last 2 or 3 pages, and even the head Medicare actuary
makes it very clear that the projections in the report--because the
projections in the report are based on current law--are implausible.
The head actuary actually uses the word--year after year, when they
do their Medicare actuary report--that it is ``implausible.'' Why is
that not the headline? Is it because it comes with big numbers?
Here is what happens. There is something also that our Congressional
Budget Office does, which is referred to as the alternative scenario,
when you actually take out the things that are in current law and put
them into what actually is more likely to happen: we will do doc fix
and other things that are current law that hit the wall that are
unfunded in the future, and we will step up because of the political
pressure and adjust them and raise that spending.
Well, what happens when we do that? You get a curve, this green line.
I know it is hard to see, but just understand that what this means is,
if we hit this alternative scenario, in about 14 years--actually,
slightly less--your country hits 100 percent of debt to GDP.
Okay. That is debt to GDP where, actually, that is just what we are
booking. Remember, we started the conversation with we tell everyone
here is the money we are borrowing, so here is our debt to GDP.
This would not even have--that 100 percent to GDP in 14 years would
not actually have GAAP accounting. It would not have the real numbers
because you do understand, that number we did before, saying if you
just take Social Security and our current debt, add those together, it
is approaching $40 trillion, you do realize that is double your
country's GDP right now.
We are already not at 100 percent of GDP. If we actually had honest
accounting--just those two are 200 percent of GDP, yet how often do you
hear us talk about it?
This is the issue of our time. If we don't step up and start dealing
with it, I have no idea, I have no idea what happens in the future when
we hit the wall--and we will hit the wall.
Oh, by the way, understand, if you just add up the debt we have and
the unfunded liability in Social Security, we are far beyond where
Greece is. I think Greece was $1.7 trillion, so 100 percent debt to
GDP. If you just add up those, we are at 200.

{time} 1830

We need to have some folks actually start to learn some calculus, and
that was actually one of my running jokes for my first year here. I
started to realize many of my constituents thought the problem in D.C.
was Republicans versus Democrats, and I have grown to believe it is
those that own calculators and those that don't.
A question I will actually give--and we have had this discussion with
a lot of Members both on the right and the left--is: Why do we seem to
fight so much? Seriously. Why do we seem to fuss with each other so
much? And I am going to make you the argument it is about the money.
In the next couple of charts, I am going to try to walk through what
is really happening with the money so you understand if you are tired
with Congress fighting with each other about the money, it isn't going
away. It is about to get--and will continue to get--dramatically worse.
Another chart, probably almost unreadable from a distance, but
understand here is what you are looking at. Do you see the red lines
there? The red lines are what we call discretionary. That is what I get
to come to the floor and debate over and work on these appropriations
bills where we are trying to move money here, take it away from here,
try to save here. That red line is discretionary. That red line is your
military. It is your parks. It is the FBI. It is things that are not
mandatory spending, things that are not entitlements.
Here is where we are right now. We used 2013.
In 9 fiscal years--2024--do you notice something in the pattern on
this chart? Do you notice that what we vote on here in Congress, the
discretionary, is pretty much the same? Nine years from now, 10 years
from now, it is basically the same.
But what we call mandatory, which is mostly entitlements--and I will
get phone calls tomorrow from folks that are enraged that I used the
word ``entitlements.'' That is what it is. It is an earned entitlement,
but it is still a promise. It is a social contract we made as a
government with our people. We just forgot to tell them we didn't have
the money to pay it.
So understand from here, from 2013 to 2014, that increase, we will
now be sitting at a $2.29 trillion increase on mandatory spending--and
that is in 9 fiscal years. They are huge numbers, but you have just got
to follow the chart.
Let's say you are someone who is passionate about drug research,
passionate about the national parks, passionate about securing our
borders, passionate about the military. That is in this red line. It is
being consumed by mandatory spending.
So understand, the simplest way I can phrase this is your government
is very quickly becoming a health insurer and an entitlement provider
with a shrinking army.
Process that for a moment. That is where we are at. That is what is
going on around us in our lives.
We will have these charts up hopefully in the next couple of days on
our Facebook page and our Web site so you can vet them yourselves. It
is important. If you want to understand public policy in the United
States, if you want to understand public policy that is happening here
in Congress, everything is about the mandatory spending.
Do you remember the first board we put up where I was showing you the
$205 trillion of unfunded liability and debt? It is important to
understand that half that is Medicare. Medicare right now represents
close to $100 trillion of promises we as a government have made, and
there isn't money to pay for it. And those are in today's dollars.
We are going to come back and forth to a couple of these so that we
better understand them.
This is actually the 2013. You will notice the red. That is what we
all come here and we debate over and we fight over and work through and
come up with ideas. That is the discretionary. It is 32 percent of all
of our spending.
We have Social Security and Medicare. We don't have the Obama
subsidies in here yet, but that is one of our newest entitlements.
Remember, we were almost promised that this ultimately was going to be
a savings. It wasn't the truth.

[[Page H5764]]

Medicare, income security. These are food stamps and other types of
programs that are entitlements because of where you sit income-wise--
veterans' benefits, other mandatory certain pensions, certain other
requirements we have to meet, mostly on the retirement side, and
interest on the debt.
I want you to pay attention if you can see this. Six percent of what
we spent in 2013 was interest.
I am going to be rotating back and forth so this is going to get a
little awkward with these boards, but it is important to see.
So where will we be in 9 fiscal years? Now, this is important.
Remember, you just saw discretionary spending. This is your military.
This is your drug research. This is the FBI. This is the border. It is
32 percent of all our spending. In 9 fiscal years, it is 22 percent of
all of our fiscal spending. Social Security becomes 24 percent of all
of our spending. Medicare becomes 17 percent of our spending. Best
guess--and this becomes a moving target right now--the ObamaCare
subsidies in about 9 years will be about 2 percent of our Federal
spending. A little different than we were told a couple of years ago;
right? Medicaid, 9 percent of your entire Federal budget; income
security, 8 percent; veterans, 3 percent; other mandatory, 1 percent.
And this is the most dangerous part of this chart. Do you see
interest?
Remember, in the previous chart we were saying interest is 6 percent
in 2013. How many of you believe today's interest rates are normal, are
real? What happens when we go back to normal interest rates? Well, this
projection is that 9 years from now we will be back in normal interest
rates. At that point, 14 percent of your entire Federal Government
spending is interest.
Understand how fragile that makes all future discretionary spending
if we had an interest rate spike. What happens if we were in the early
eighties, late seventies type of interest rates? This number explodes,
and it would consume what is sitting in the discretionary budget. As we
continue to borrow, as we continue to add to programs and make promises
and not set aside money for them, we are squandering our future.
On occasion, I get to sit down with an audience where I will see
parents and grandparents and the grandkids and you will turn to them
and say to the parents, ``How many of you love your kids?'' and most of
the hands go up. And then you will turn to the grandparents and say,
``How many of you love your grandkids?'' and all the hands go up. Then
you start to show them these charts, and you turn to the parents and
the grandparents and say, ``Do you understand what you have done to
your children, what we have done to our grandchildren, and what we have
done to a generation that is not even born yet?''
The math right now, just to cover the promises that are already
done--this is baked in the cake; this is done--your kids, your
grandkids, your unborn children are going to have a 60 percent mean tax
rate. And that is not for those with a high income; that is
everyone. Sixty percent of your income will have to go just to cover
this spending. And that is not your State, your local, and your FICA;
that is just 60 percent of your income. You will have a of 60 percent
income tax just to cover the promises that are already made. And that
doesn't pay anything off. That just maintains where we are, because you
start to have externalities like the net interest that you have got to
pay. And what happens when interest rates move again?

So for those of you, once again, who care a lot about the military,
care a lot about protecting the border, care about drug research, care
about education, care about all these things, if you really do care,
every time you speak to an elected official, every time you speak to
someone with election ambitions, every time you speak to a policymaker,
every time you speak to someone from the press, please ask the
question: What are you willing to do about mandatory spending, because
the mandatory spending, the entitlements, are consuming us as a people.
And they are consuming your Republic's future.
One more time. Basically, this is 9 fiscal years from now. So take a
look. Here is what actual was for 2013. These are the actual numbers.
We had 32 percent of our budget go to discretionary. That means not
Social Security, Medicare, Medicaid, ObamaCare. Those are the
mandatories. This actually crashes to 22 percent. This is in 9 fiscal
years.
So what is the solution? The solution actually is pretty obvious, and
it is really tough. We need the American people to understand maybe not
the math but what it means.
It is hard to get in front of an audience and say a trillion this and
trillion that. How many folks even understand what a trillion is, the
thousand billion and a million. So many of our brothers and sisters do
not understand what these numbers mean, but they need to understand
what it means to their future and that what we are doing today isn't
working.
These numbers continue to get worse and worse month by month because
we have policy from this administration and we have policy coming from
the U.S. Senate where they won't take the pieces of legislation that we
put out of this House that would actually help us to start to grow the
GDP.
So let me give you how simple and how tough the solution is.
Number one, we are going to have to step up and tell the truth and do
something about mandatory spending.
How many politicians, how many consultants out there will say: If you
talk about Medicare, you are going to get unelected? Wouldn't it be
amazing if the public started to understand this and say: If you don't
talk about Medicare, you get unelected?
The other thing is you have two things that potentially start to
really grow our economy. The energy renaissance--let me walk through
this because this is sort of a stream of consciousness, but it is
really important.
If I had come to you a decade ago, when you would pick up the
newspaper, when you would pick up the magazine, when you would go
online, whatever you read, there was this term called ``peak oil''? Do
you all remember that 10, 12 years ago? It is very simple. The next
incremental barrel of oil was going to be less than we had the day
before. The world was running out of energy.
How many of you out there can tell me what is wrong with that?
Seriously.
The fact is that it was absolutely wrong. We are not running out of
energy. As a matter of fact, as of today, we have more known fossil
fuels than any known time in history. We have been blessed,
substantially through technology. And be prepared, there is another
wave of technology coming, particularly for natural gas, between now
and the end of the decade that may even make it better and more
accessible and, hopefully, even cheaper. You have an energy renaissance
happening in your country.
How do I keep Congress, the bureaucrats, the control freaks here in
Washington from destroying this energy renaissance?

{time} 1845

The second thing that is happening is even more complicated to talk
about. I have grown to believe there is an economic renaissance around
us, but it is unlike anything we have ever experienced. Let me see if I
can find a way to make this work.
I believe we are entering the age of the hyperefficient economy. Who
here has ever used a ride-sharing service? I guess the big ones are the
things like Sidecar. How many of you have ever used something like
Uber? Okay. You have this little computer in your hand that, on
occasion, works as a phone. What about the other things that it is
doing in business? If I came to you right now and said, ``In the
country, who is the largest pet groomer in the United States? I think
it is PetSmart. Who is the second largest one in the United States?''
It is an app on your phone, where you hit it, and that is how you
access your pet groomer. Think about that. Then at the rate of growth,
in a couple of years, it becomes the biggest. If I came to you right
now and if you were a policymaker in New York City or were a hotel
owner, would you consider something like Airbnb an existential threat
to your business? Remember the discussions coming out of New York about
what it is doing to the bed tax.
So, when you start to worry about incumbents coming to their
politicians and saying, ``You need to stop this new economy,'' the
incumbents aren't always the businesses. It is also the tax

[[Page H5765]]

system that is built on the way it is, not on the way it is becoming.
We had a presentation from one company. I think it was out of
Michigan. It had this idea--I think it was 1000 Tools--where you could
go online, and instead of going down to your favorite hardware store
and buying the $1,200 compound miter saw with laser sighting--and if my
wife is listening, that is actually what I want for my birthday--you
now hit the button on your phone, and you rent it from your neighbor.
Think about that. That is a change in the economy. The sale no longer
happened at the hardware store, and the manufacturer didn't get to sell
a new compound miter saw with laser sighting, but you as the consumer--
you, as the renter of this equipment--now probably have, not the $1,200
you would have spent, but the $1,140--because you spent $60 on the
rent--still in your pocket. Do you go and spend it on other things? Do
you spend it on investments? Do you spend it on your family?
There is this rotation happening all around us of things that you and
I have not even thought of. Will the bureaucracies and will the
incumbent businesses show up in legislative bodies and courts around
the country and do everything they can to stop that new hyperefficient,
highly optional economy that is around us right now? Will they try to
put the Ubers out of business? Will they try to put the Airbnbs out of
business? Will they try to put the 1000 Tools--and who knows what else
is out there?--out of business? Every day, entrepreneurs in this
country are coming up with ideas, but those ideas are restructuring the
economy, so let's walk through some of the options we have.
We have an energy renaissance. Every week in our office, we have
people coming to us, saying, ``Oh, David, we really want you to
regulate hydraulic fracturing because--oh, yeah--we worry about it, but
it is also ruining our investments because we invested in alternative
energies, and when there is $4.50 long-term futures in natural gas, it
is screwing up our investments over here.'' Remember the family rule:
money, power, vanity. It is about the money. You would be shocked to
know how much of the public policy that so many Americans think is
Republican and Democrat is about the money.
Will this Congress do everything in its power to maximize this future
of the energy renaissance and the revenues that it produces--both
inbound, outbound? Will it be like some of the discussions we even saw
earlier tonight of: let's come up with ways to regulate or let's come
up with ways to minimize what we are able to sell when we are bringing
in revenues from both our own country and from around the world?
Be prepared and think it through.
It is so often about: well, the people who support it are I and my
political party, who are invested on the other side, so we need to stop
this because it is hurting their investments. Then remember the number
one thing most elected officials care about--their reelections. Forgive
me. I know I am trying to be brutally honest here.
The second half is, today, here in D.C., the taxicab industry spent
an hour blocking the roads and honking. My understanding is a
substantial portion of that was the disdain for the competition from
rideshare applications, from things like Uber--another optionality. It
is a changing economy. There is going to be displacement in it, but
with that also comes opportunity, and with that comes the new
efficiencies that give us a chance to grow this economy.
Remember the first board here. We are $205 trillion upside down. If
we don't get amazing growth, we are never going to provide the promises
that we have made to 76 million baby boomers who now have begun to
retire. As just a bit of trivia, why is that so important? Average baby
boomers--my math may be about a year out of date--will have put about
$100,000 into Medicare. My understanding is they are going to take out
about $320,000 to $330,000. If you take that shortfall and multiply it
times 76 million of our brothers and sisters who are baby boomers, then
just in that one program, you start to see some of the demographic and
math problems we have.
How do we start to grow the economy?
The last part of this is the regulatory zeal that has come from this
administration.
Please, President Obama, turn to your folks. It is time to rethink
this. How many more bad GDP numbers do you need? How many more misses
do you need on the projections of: ``Oh, the economy is getting better.
No, it is crashing the other way. Oh, we are going to be this much
better in our deficit. Oh, dear heaven. We are a year later, and it is
still the same even with all of these new, higher taxes''? Regulatory
overreach on things like waters of the U.S. and on so many other
programs out there that are coming out of the bureaucracy are crushing
the expansion of this economy.

My closing is pretty simple here. If you have someone out there who
is asking for your vote or if you really care about the future, have
the conversation, and be willing to open your mind up and understand
the math--even though it is uncomfortable--that the mandatory spending
is consuming everything in its path. If we don't deal with that and, at
the same time, if we don't do everything we can to grow this economy
absolutely vigorously, it could be a very dark day in the future. Yet I
am incredibly optimistic that, if we embrace the new hyperefficient
economy, if we embrace the energy renaissance, if we start to
understand the regulatory crushing that has been going on right in
front of us--if we deal with those and deal with them honestly--I think
we actually have an amazing future, and we are going to make it through
this.
With that, I yield back the balance of my time.

____________________