[Congressional Record Volume 160, Number 111 (Wednesday, July 16, 2014)]
[House]
[Pages H6338-H6342]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNFUNDED LIABILITIES--THE GREATEST THREAT TO OUR FUTURE
The SPEAKER pro tempore (Mr. Yoho). Under the Speaker's announced
policy of January 3, 2013, the gentleman from Arizona (Mr. Schweikert)
is recognized for 60 minutes as the designee of the majority leader.
Mr. SCHWEIKERT. Mr. Speaker, I yield to the gentleman from Illinois
(Mr. Shimkus), I believe it is southeast Illinois.
Celebrating the Lives of Alan Dixon and Kenny Gray
Mr. SHIMKUS. Mr. Speaker, I want to thank my colleague for yielding.
I rise today to celebrate the lives of two extraordinary public
servants, both considered from southern Illinois--one from deep
southern Illinois--Senator Alan Dixon and Congressman Kenny Gray. Both
passed within the last week or so, but our mourning has turned into
remembrance and reverence for their undeniable commitment to all of us.
Senator Alan Dixon--or as he was commonly known, Al the Pal, as we
from Illinois knew him, and eventually everyone else in this
institution and in Washington knew him as that also--was a larger-than-
life personality, with a can-do spirit, if you will.
He came to Washington to get things done, particularly for his
beloved Illinois. From his beginnings in Belleville and St. Clair
County to being State treasurer and secretary of State, he modernized
the offices he served in to better serve the people of the State.
Elected to the U.S. Senate in 1980, he soon realized that Illinois
lacked a cohesive message in Washington, D.C.
With Senator Chuck Percy, he began a monthly Illinois get-together
that continues to this day. It brings together Members of the House and
the Senate, downstate, Chicago, Republican, Democrat, conservative,
moderate, and liberal. We sit around, and we talk about the Illinois
agenda and how we can work together to advance it.
Our prayers and best wishes go out to his wife, Jody, and his family
and friends.
I would also like to single out a couple of other people who were
very special in his life. One was Gene Callahan and Scott Shearer.
Their public service on his behalf is emblematic of that of all those
who worked with my friend, Al the Pal.
Just as a side note to my colleague, we have a colleague here who is
a Member of Congress, Cheri Bustos, who is the daughter of Gene; and
there is that great connection of, in essence, a politically active
family that continues to serve.
We will miss Al the Pal. He was a great friend and a great public
servant.
Now, Mr. Speaker, let me turn to Kenny Gray. Kenny Gray was a very
colorful Member of this Chamber, well known for spending many hours in
the chair. He loved this House so much that, after he retired, he ran
again and came back.
He was known as really a cult of personality. In a sea of Washington
grey suits, white shirts, and red ties, Kenny stormed through this
place in a flurry of colors that had never been seen before, but you
dare not look away, as the Prince of southern Illinois was here, and he
was determined to fight for his constituents.
Kenny made a big difference in southern Illinois. As the coal
industry started suffering challenges, he worked hard. He was known as
the Prince of Pork and the Prince of southern Illinois.
[[Page H6339]]
He worked diligently to bring the interstate system to southern
Illinois, and he is also credited to bring a major water conservancy,
Rend Lake, which brings and provides much of the needed drinking water
to southern Illinois, and I would argue deep southern Illinois.
I am reminded of how he helped young people from southern Illinois
come and grow here in D.C. A favorite example is my friend Brenda
Otterson of West Frankfort, who came out to D.C. a few years back.
She came here as a Republican--Kenny is a Democrat--but as a
Republican. Brenda came from a family of Democrats. Try as he might,
Kenny worked hard to convert her.
When he finally realized she wasn't budging, he said, fine, and he
helped her get a full-time job with a Republican Member. She served
with distinction and never forgot her Kenny Gray roots.
Kenny's wife, Toedy, and their family deserve a special prayer and
thanks from all of us.
Mr. Speaker, time comes, and time goes--rabid debates, a flurry of
activities. We always take time out to remember those of our colleagues
from future generations who are served, served nobly, and then gone
home.
I think it is just fitting to remember that we remember those who
served selflessly for many years as we take up their call to continue
to do the same.
It is also important to remember to enjoy each and every day, enjoy
life, work hard--because everything has its time under the Sun and
everything is passing. That is why I appreciate the opportunity to
serve. I love the Chamber. I love my colleagues.
With that, thank you for this opportunity, my colleague, Mr.
Schweikert.
Mr. SCHWEIKERT. Thank you, Mr. Shimkus.
Mr. Speaker, a couple of weeks ago, I came to the floor and did a bit
of a presentation of some of the numbers we were seeing on what was
actually happening in our debt, in our future economic growth, why we
were so stagnant in today's economy, and the overhang that was, I
believe, the very thing that was slowing down future economic growth.
I had a number of phone calls and a number of emails and a few
comments on Facebook asking for a little more definition, a little more
presentation. So I thought I would come to the floor this evening, take
some of this leadership hour, and walk through some of the numbers.
I have to apologize to everyone right now, I am going to throw out a
lot of math, a lot of numbers, but you are going to see a theme here of
what is coming at us, and it is coming at us very, very fast.
After we do this, I want to do a little talking about a piece of
legislation that I have that has made it through committee, and I am
hoping, over the next couple of months, we will come to the floor and
what that piece of legislation, I believe, means to sort of
transparency here in our government with the EPA and hopefully as just
sort of the future of how we deal with data in this Federal Government.
The chart alongside me--and I know there are lots of lines in it and
it is hard to read, but it has a very, very, very simple theme--I am
going to show variations of this on a couple of different boards.
{time} 1700
The red you see down at the bottom is what we call discretionary
spending. That is what we substantially get to come down and vote on.
That discretionary spending, if you look at the next decade on this
chart, basically stays the same. So the military, the Park Service, the
FBI, education, and these things that are programatic that we come down
and vote for on the discretionary side of the budget are pretty much
staying even for the next 10 years.
Do you see the blue lines? They are just slightly shy of doubling.
They basically double over the next 10 years. That is mandatory
spending. That is Medicare, Medicaid, Social Security, interest on the
debt, veterans' benefits, and now ObamaCare, things that are built in
by formula. And they grow and grow and grow and grow, and they consume
everything in their path.
That is what is going on here.
When I do meetings back home in Arizona, in the district, you often
get this question: Why do you all fight with each other? Why do you all
fuss with each other? And my answer is: It is about the money. And you
get this look.
You must understand, we come to this floor and we are fighting over,
fussing over, in many ways, a shrinking pot of resources, even though
today we have actually the highest revenues this Federal Government has
ever received.
So where is the money going? It is going to that mandatory spending.
We need to deal with the reality that the mandatory spending--the
entitlements--are consuming our future. So that is what this chart is
basically saying.
We are going to the next chart. The reason I am going to put this one
up is this is from 2013. So we actually know it has happened. It is a
closed book.
If you look at the blue areas, that is mandatory spending. You will
see Social Security, Medicare, Medicaid. You will see other income. You
have supplemental programs like food stamps, WIC, and some of those
types of programs. You will see veterans' benefits down here. And about
6 percent of our budget last year--our money, our spending--went to
interest. Thirty-two percent last year is what we, as Members of
Congress, got to come down here and do policy on.
Understand that in 9 budget years--and I am going to show you that
pie chart in a moment. That is 32 percent. In 9 budget years, that goes
from 32 percent of our spending and collapses down to 22 percent. That
22 percent has your military, the FBI, the education, health research.
All those types of things are in that remaining portion of the pie.
This was something that I picked up several months ago, and I was
shocked it did not get more discussion here on the floor of the House
or around here in Washington. Last September, we had the Chief of Staff
of the United States Army in discussion before Congress talking about
the future of the Army and what was actually going on. In his quote, he
basically says that 46 percent of the Army spending today is personnel
costs, like salaries, pensions, health care. By 2023, 9 years from now,
it is going to be 80 percent.
So get your head around this: 80 percent of the Army's spending in 9
years will be personnel costs. It will not be equipment. It will not be
things that fly fast and go kaboom or make our soldiers safer. It will
be personnel costs. In 9 years, 80 percent of that Army's budget will
be personnel costs.
You have got to understand the demographic bubble our country is in.
The fact of the matter is these costs are consuming us. We can have a
debate of, well, it's uncomfortable to talk about, it's not politically
correct, when you talk about Medicare and Social Security you can get
yourself unelected, but if you care about these programs, if you care
about the social contract we as Members of Congress have with our
constituents, you need to step up and understand the underlying math so
you can save them--because it is math.
Think about if I came to you and told you that 9 years from now, for
a branch of our service, 80 percent of their money is not equipment, is
not things that keep the soldiers safe, but it is just going to be
salaries, health care, and retirement. You need to understand that the
very thing we are discussing on our overall Federal budget is now also
hitting Federal employees and our military.
I am going to rotate to the next board. Remember, this one shows 32
percent of all of our spending was discretionary.
This is 9 budget years from now, so it is 2024. Nine budget years
from now, that discretionary portion falls to 22 percent of our
spending. And this is still the military; this is still the FBI; it is
still health research; it is still education.
So what is happening here? Well, on the previous pie chart, interest
was 6 percent of our budget, 6 percent of our spending. In 9 years, we
predict it to be around 14 percent. That is assuming that we stay with
historic norms on interest rates. If interest rates spike, if we have
1979, 1980, 1981, or 1982 all over again, our interest exposure
consumes huge portions of what is left in the discretionary budget.
You must understand what we have done with the explosion of our
deficits
[[Page H6340]]
in this country. We have actually made this country rather fragile to
interest rate exposure, and something you need to understand is we now
become more and more subject to the world's interest rate markets and
our ability to constantly sell more and more of our debt.
There was something I found sort of amusing, and I didn't bring the
actual numbers with me, but 2 days ago this administration was
announcing how happy they were with that the deficit numbers and where
they were at. The problem was the deficit numbers weren't that
different from last year, and they were substantially higher than they
were predicting last September, one more time demonstrating here in
Washington you can spin almost anything. And if you have a compliant
press, complicit press--whatever you want to use--you can make it sound
like happy talk.
The numbers are not getting better.
So in 9 budget years, 24 percent of our spending is going to be
Social Security.
On occasion, I will have someone on the left who will show up at one
of our discussion groups, our working groups, or our town halls and
demand a discussion about Social Security, saying Social Security is
fully funded. They have all those IOUs in it.
Here is the basic math on Social Security.
Social Security is holding about $2.3 trillion of special Treasury
notes from the Treasury Department. Obviously, the Treasury Department,
if they were to pay those back--which they will--they have to go borrow
the money, because they have already spent the money. That is the asset
in Social Security. Understand, Social Security is sitting on about a
$24 trillion unfunded liability. So they are holding about $2.3
trillion in special Treasury notes, and they have $24 trillion in
unfunded liabilities.
And this is where it ties in. We talked about this a couple of weeks
ago.
At the very beginning of the year, George Mason University did a
study and put together some data of what would happen if you took the
U.S. debt, the U.S. liabilities, and put them on GAAP accounting, just
like your business, my business, just like everyone else where you are
doing a large public statement and you would have to put them on GAAP
accounting--what are your liabilities, what are your assets, and if you
offset them.
What would you guess the United States shortfall is? On occasion, I
will hear many of my brothers and sisters even here in this body sort
of quote the number that you can see at the bottom of the U.S. debt
clock on the Web site as it is spinning, and they will say things like:
Oh, it's a $120 trillion shortfall.
The study at George Mason University came in at $205 trillion, which
is our honest debt, our honest unfunded liabilities, if you actually
use GAAP accounting.
Go to the Internet now and take a look at what many predict,
estimate, guess is the entire wealth of the world. You are going to
find out what we owe, what we are going to owe, what we have promised
is greater than the current wealth of the entire world--every asset in
the world.
I will make you the argument that even with the chaos we have right
now through so many things in this country and so many things I
actually hold this administration responsible for, the President's
failure to step up and say, This is the systemic risk to my country, to
your country, to our country, not dealing with the explosion of the
future entitlements consumes our future. And it is in front of us.
We knew baby boomers were going to turn 65 for how long? I remember
sitting in a statistics class in 1981 where the professor was putting
things up on the board and talking about how much money we would have
to have set aside in assets as we started to move into the baby boom
retirements.
We are now into year three, and my understanding is a typical baby
boomer will have put in around $100,000, $120,000 into Medicare in
their lifetime, and they are going to take out $330,000. So they will
put in about $110,000 and take out about $330,000. Now, multiply that
shortfall times 76 million brothers and sisters. And we are into year
three of it now.
We have known this was coming. We have known this was coming for 65
years, but it was politically dangerous to talk about. It was
uncomfortable. It is easier, as you watch the debates here on the
floor, to talk about today's chaos, today's spending.
Being able to cover these promises, these social entitlements, these
social contracts into our future, if you love your kids, if you love
your grandkids, if you love your great-grandkids that may not even be
here yet, this is the question I beg of you to ask candidates who are
running around this country: What are your plans to deal with the
crushing future debt, the crushing future promises that we have made
that there is no money for?
There is this almost pathologic attitude around here of: We will get
to it one day when we have a Senate that is willing to step up and do
work. We will get to it one day when we have a President that is
willing to be honest about the math. We will get to it one day.
The problem is that every single day that ticks away, the math gets
worse. A good example of that is 2 days ago, the Congressional Budget
Office came out with their annual data.
Remember, you have heard over and over on the media that things are
getting better, the job situation is better, our numbers are getting
better. Well, if they are getting better, how did the fiscal scenarios
get worse?
Go pull the Congressional Budget Office's numbers that they just put
out. Our Congressional Budget Office does two scenarios. One is the
standard and one is called an alternative.
{time} 1715
The standard is basically based on the concept of: this is the law as
it is today. Here are the numbers that it projects. Of course, you have
got to understand that the law as it is today has things in it like the
common vernacular ``doc fix.'' We refer to it as the SGR. It is this
concept that, in a dozen or so years, doctors are going to take 73
percent less money--73 percent less compensation--to see a Medicare
patient. It is implausible. It is not going to happen. Yet here is how
the scam works here in Washington.
It is the current law that doctors are going to be compensated this
much less over the next dozen years, so we are going to calculate that
as savings all up and down our future budget projections, our future
debt projections. We have things that are woven into those numbers that
are fantasy. Go read the last three pages of the Medicare-Social
Security actuarial report. The head actuary, whom I have never met but
who I hear is just a standup person, basically says, ``Oh, by the way,
these numbers are implausible,'' but they are based on current law. You
will hear debates here on the floor, saying, ``No, the number is this.
The number is this.'' The number often, if they are using the standard
projections, is a fraud.
Then there is the alternative scenario, which may overshoot a number
on the negative side because it basically makes a projection of: What
if GDP isn't what we hope it to be? which, as it has turned out over
the last couple of years, is true. We will be blessed if we can break
through that 2 percent this year because of what happened in the first
quarter.
The alternative scenario is that we hit 100 percent of debt to GDP in
14 years. How many of you remember what you were doing 14 years ago? To
help you put it in sort of a perspective, when you get ready to take
out that 30-year mortgage, understand that less than halfway through it
your government, your country, is going to be at 100 percent debt to
GDP. Theoretically, that is when your sovereign debt becomes much more
risky, and this net interest figure potentially starts to explode on
you because getting sovereign nations, getting individuals and getting
investors from around the world to buy our sovereign debt becomes
harder and harder because we start to look riskier and riskier. If you
say, ``David, I don't want you to use the alternative number. I want
you to use the standard number,'' okay. Add 8 years. Add 8 years so
that, in 2036, we hit 100 percent of debt to GDP.
We can fix this, and we can fix it in a way that is not terrifying.
It will be a little uncomfortable, but you will save the future. If you
are a person of the left and if there are programs you
[[Page H6341]]
care so deeply about, those programs are on the discretionary side of
this budget. If you are a person of the right or a person who cares a
lot about the military, that is in this discretionary budget. Every
time you talk about those programs, you need to stand behind that
microphone and talk about mandatory spending--Social Security,
Medicare, Medicaid, interest on the debt, veterans' benefits, and now
ObamaCare--because they are all on autopilot, and they are consuming
everything in their path.
That is, hopefully, a little more detail of some of the numbers I put
up a couple of weeks ago. We traditionally will put these slides up on
our Facebook page and on our Web site so that you can analyze them. If
you want all of this data and a lot more--I mean, a presentation could
go on for hours--it is on the Congressional Budget Office's data sets.
This is the issue of our time. It is that we have made as a government,
as a people, lots and lots of promises, and we haven't built the
mechanisms to pay for them.
With that, I want to move on to one other little thing. Let's take
these boards down.
Now, as we get ready to talk about the ``Secret Science'' piece of
legislation, I show you all of these debt projections and unfunded
liability numbers, and I am actually more optimistic today than I have
been at any time in my 3 years here in Congress. Why? If I had gone to
anyone out there 10, 12 years ago and had said, ``Hey, in 2015, the
United States is going to become a natural gas exporting country,'' you
would have laughed at me. Ten or 12 years ago, you couldn't pick up the
newspaper--you couldn't pick up The Wall Street Journal, Barron's,
financial news--and not hear discussions here on the floor about this
thing called ``peak oil.'' The world was running out of energy, do you
remember? It wasn't that long ago. The world is running out of energy.
Tomorrow, the next incremental barrel of oil and the next incremental
unit of fossil fuels that we extract will be less than the day before.
You all know the problem with that. It was absolutely wrong. As of
today, we have more known fossil fuel supplies than any time in human
history, and if we use this the right way, that is one of the legs on
the stool that is going to support us as we stand up and start to meet
these obligations that we have made.
The second thing is much more ethereal, a little more difficult to
talk about, and that is what is happening all around us. There is this
hyperefficient economy that is breaking out. How many of you have ever
ridden Uber? How many of you have ever done SideCar? How many of you
have ever used that handheld computer you call a phone to buy
something, to sell something, and to use it in a fashion to do
something that is so hyperefficient that you couldn't have done it a
couple of years ago? Please understand. The incumbents, as they are
often referred to--and it is not competitive businesses. It is
competitive businesses and incumbent tax systems. If you have a Web
site that allows you to rent someone's townhouse for the week, that
becomes a great transaction for you and for that person who owns the
townhouse, but the municipality and the hotel are not happy. The
municipality is not getting its bed tax, and the hotel with its capital
expenditures is not happy, but the fact of the matter is that this is
an economic transaction that is efficient.
Over the next couple of years, I believe, in State legislatures, city
councils, county councils, and here in Congress, we are going to see
the fight over: Do we regulate the new alternatives you have as a
citizen to engage in this hyperefficient economy? Do we regulate them
out of existence? Do we create some concept of, well, we need them to
have additional tort liability shields or we need to have them engage
in this part of the tax scheme? A bit of economic chaos is normal. That
is how you renew yourself. That is how you create the next generation
of economic growth. We need to embrace it because, if we cannot reach
escape velocity in the energy renaissance and in the economic
renaissance, I do not know, mathematically, how we keep our promises to
so many people in this country.
A few months ago, I introduced a piece of legislation, and it has
been through the Science Committee. We gave it the title of ``Secret
Science.'' I am not sure if I am thrilled with the title, but it is a
very, very simple concept. The concept underlying it is: Do you make
public policy and not make the underlying public data available? It is
a simple concept--public data for public policy. Should your government
be keeping the data--the underlying data--secret and then create a
bunch of rules and regulations on top of you?
It is almost absurd to think we have to create a piece of legislation
to get the EPA to take its data sets and make them public. There is
this intense arrogance out there in the world right now, particularly
at our agencies, of saying, ``David, you have got to understand. Only
real scientists, researchers who we deem qualified should ever see this
data. Well, you don't want the unwashed masses to have an opportunity
to see how we are developing our science and our regulations.'' It is
absurd. It almost borders on Orwellian as to what is going on in our
bureaucracies today. They are going to create rule sets that cost
hundreds and hundreds of billions of dollars and that are going to
affect how we live in future decades. Yet there is the arrogance of
saying the young man who is a statistics major, the left-wing group,
the right-wing research group, the industry group, the activist group--
just someone who is nutty enough to have a great stats package on his
home computer, who wants to take the data sets and play with them and
model them and see what is out in the tails and maybe match them up to
other data sets that someone hadn't thought about--is not worthy. They
are not worthy?
Now, it is a personal fixation, but I actually believe that
transparency is the ultimate regulator in our society. Could you
imagine if we had gone into 2008 and if we had had transparency on that
MBS, the mortgage-secured bonds, and had known what the impairment was
and had known what was actually going on? Would you have had an
implosion on a single day, or would you have had a couple of years of,
hey, these are having trouble, these are having trouble; we need to
mark down the prices? Transparency is the ultimate regulator, the
ultimate vetter, but it is also the ultimate exposure to bad acts.
This hit my desk last week. It is a TIME magazine. On the cover it
says, ``Eat Butter. Scientists Labeled Fat the New Enemy. Why They Were
Wrong.''
Now, how many times have you heard the people at your gym, your wife,
or others saying, ``David, you need to be eating less saturated fats.
You can't eat that butter. We need to go buy some of that artificial
stuff''? Now I am looking at TIME magazine's saying, ``Hey, we screwed
up on the data.'' How many times in our lives do we come here and say,
``We knew it except for the small problem that we got it wrong''?
Remember, we all knew the world was running out of energy. ``Well, we
got that wrong.'' We all knew eating butter was bad for you until we
knew the data was different. There are dozens and dozens and dozens of
examples like this around us, but we were so arrogant that we thought
we understood the data. We thought we understood the methodology. We
were so brilliant except for the fact that we weren't. We got it wrong
over and over and over.
The fact of the matter is--and go back to my energy example of a
dozen years ago and beyond that--our military policy, our foreign
policy, our environmental policy, our tax policy was all based on this
concept that the world was running out of energy, except we weren't.
How much of our health policy is based on things like this: ``David,
you can't eat butter''?
I saw a presentation a few years ago that the government was spending
this astronomical amount of money to try to keep people from using
salt. The researcher was presenting salt as only a problem for you if
you have hypertension, but that is different than the folklore out
there. How many things have we developed in our folklore that we make
policy?
That is why H.R. 4012--it is called the ``Secret Science'' bill--is,
I believe, so needed. When the EPA takes data, whether it be from
industry, whether it be from a research group, an activist group, a
right, a left, an internal--any group--and when they use that data to
[[Page H6342]]
make a policy, to make a rule, that underlying data belongs to all of
us. It is public policy by public data, and we all as Americans deserve
the right, if you are so inclined, if you so choose, to sit there, see
it, touch it, calculate it, crunch it, compare it, understand it. Who
knows? You may be the researcher who comes out, looks at the data,
matches it up against other things, and tells me I can eat butter.
I promise that in a couple of weeks, maybe a month, I am going to
come back to this microphone, because I have collected an entire binder
of example after example of what we were absolutely positive about--
what we absolutely knew--and we got wrong, and how so many of those
things we made public policy on, and we got it wrong.
My good friend from Iowa (Mr. King) has a couple of other things in
sort of that same vein that he wants to share, and he may be the best
person I have ever seen behind these microphones.
With that, Mr. Speaker, I yield back the balance of my time.
____________________