[Congressional Record Volume 164, Number 62 (Tuesday, April 17, 2018)]
[House]
[Pages H3391-H3394]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]





                 WHAT IS HAPPENING IN OUR NATION'S DEBT

  The SPEAKER pro tempore (Mr. Kustoff of Tennessee). Under the 
Speaker's announced policy of January 3, 2017, the gentleman from 
Arizona (Mr. Schweikert) is recognized for 60 minutes as the designee 
of the majority leader.
  Mr. SCHWEIKERT. Mr. Speaker, as I get myself organized here, this 
evening I am going to actually try to do something that is probably a 
little dangerous and a little tricky. I am going to try to do some math 
from behind the microphone.
  You know, we have a running joke in our office that being a Member of 
Congress means you often work in a math-free zone but the math always 
wins.
  And, you know, to our friends over here, I guess I should--I don't 
mean to jump onto this, but we just heard some of the discussion about 
Ms. Slaughter. I am, obviously, from a different part of the country, a 
different party, different philosophy, and she was always incredibly 
kind to me and funny. Most people, I don't know, completely understood. 
She had a brutal wit, and so a couple of times, when I would go in 
front of the Rules Committee, sometimes the banter back and forth, you 
sat there and go: Is she just playing with me? So just for my friends 
that are just leaving from that.
  All right. So I am going to try to do a couple of things here, Mr. 
Speaker. I am going to actually sort of walk through what was in the 
most recent CBO report, but also a couple of the previous CBO reports 
and what is happening in our Nation's debt. At the same time, I am also 
going to talk about some of the positive things that are happening, and 
some of it because of the tax reform, some of the things that are 
happening in our unemployment and opportunity out there.
  So, first off, let's walk through a couple of baseline numbers, and 
then I am going to grind through these so it tells a story of where we 
are going and where we are at as a country.
  When we get behind these microphones and say, ``We have an 
entitlement crisis coming that we have to deal with,'' they have been 
saying it behind these microphones for 30 years. Well, it is here. The 
peak of the baby boom, I think, today, is about 62 years old. There are 
74 million of us who are baby boomers, who will be moving into our 
benefits, and we don't have the resources to cover our promises, the 
way things are structured today.
  Yet if you look at the Pew poll from a couple of years ago, only 15 
percent of Republicans believe there is an entitlement crisis coming, 
but only 5 percent of Democrats believe it. So this is one of the great 
difficulties in this body where you often hear us saying: Speak truth 
to power. Well, how about math to power?
  Well, what about our own constituents when they don't believe us 
because maybe there has been crying wolf or because it has been easier 
to say things like: Well, the problem is waste and fraud. There are 
problems with waste and fraud, but the numbers are tiny compared to 
what is about to happen.
  So, some baseline math. When I was born, 1962, there were five 
workers for every one retiree. Today--and let's actually do 12 years 
from now, because that is when it gets dramatic. Twelve years from now, 
there will only be two. You and your spouse will be covering one 
retiree. So, in just my lifetime, we have gone from five workers for 
one retiree to two.
  The math is brutal. So think about this. Over the last decade--so 
from 2008 to 2018--if you actually look at the growth in the size of 
spending in the government, 72 percent of it was just Social Security 
and Medicare. So if you actually look at the growth of the Federal 
spending, do understand, over the last 10 years, 72 percent of that 
growth were just those two programs: Social Security and Medicare.
  Over the next 10 years, just the growth will be about $1.3 trillion. 
That is, functionally, just the growth in Social Security and Medicare 
will be two full Defense Departments. It is important to get our head 
around telling the truth, because if we are going to save these earned 
entitlements, we need to have that moment of reflection that comes off 
of a calculator instead of what happens so often behind these 
microphones where we try to make public policy by feelings.
  So, first board I have up here, this is from the latest CBO report, 
which I actually have in here, which I am trying to keep from falling 
off the podium here, and there is actually some good news here. And, 
that is, because of what is going on the last couple of quarters, this 
last year, substantially, I believe, because of what is happening 
through growth-oriented policies, whether it be the tax reform, whether 
it be what is happening in the regulatory environment, you are actually 
seeing revenue into the trust funds go up a bit.
  It is still a crisis, but if you actually look at SSDI, which is 
Social Security Disability Insurance, I think it was maybe 1\1/2\, 2 
years ago I got behind this microphone, and there were only like 4 
years left in the trust fund, and it went to zero.
  Well, we gained almost 3 additional years. Now, some of that is 
because of policy, some of it is because of revenues because we have so 
many more people working right now. If you actually also take a look at 
some of the money going into Social Security, some of the money going 
into Medicare part A, that is the trust fund portion, we are actually 
picking up a couple of years--1 year here, 2 years there--in additional 
actuarial soundness of the trust funds.
  Think of this as an opportunity. If we are going to have to make 
policy--and as I stand behind this microphone, I am looking for a 
unified theory. It is not just entitlement reform because, let's face 
it, that is the third rail. People go nuts. They run attack ads on you. 
It is more complicated. We need to do those things in our society that 
help people be employed, do tax regulatory policies, training policies, 
opportunity policies, because the more of our brothers and sisters who 
are working--how do we go from 63 percent labor force participation, 
which is a wonderful number from where we thought we would be 10 years 
ago till now, how do we get it to go further?
  How do we get more of our brothers and sisters to move from being the 
long-term unemployed, the discouraged workers, and get them to move 
into the opportunities that are out there right now because we have, 
apparently, millions of jobs that are looking for workers, but it also 
does powerful things to these numbers?

  We are also going to have to be honest about mechanisms within 
immigration. We have a birthrate crisis in this country. The last few 
years, if you actually look at the number of babies we are having, our 
numbers have substantially collapsed.
  Well, remember, today's child is tomorrow's worker; and if in today's 
world, when you turn 65 and begin some of your benefits, the math is, 
you will spend about one-third of your adult life in retirement, but we 
don't have enough young people because these programs are pay-as-you-go 
programs. That is really important as we sort of walk through the math.
  So if you are looking for that unified theory, it even adds in things 
like trade. If we are going to be a country that is very slow on our 
birthrate and immigration, we have designed a talent-based immigration 
system that also does some rewards for younger demographics, but we are 
also going to have to have trade with countries that also have positive 
demographics so we actually have customers.
  There are lots of these things that all have to be thought of 
together. And something I am not going to do tonight, but I have done 
other evenings and we will do in a month or so, is a fixation on 
technology and how technology also can provide amazing opportunity in 
everything from changing the healthcare curve to actually allowing more 
of our brothers and sisters to participate in the workforce, even those 
with certain difficulties in life or even those who may be older but 
choose to work. Instead of being scared of technology, I think it may 
be our solution, depending on some of these cost curves.
  So what is important here is, as you look at this chart, just take a 
look at this first number here. That is the Social Security trust fund. 
Now, as you know, our general fund has taken that money and borrowed 
it, and then we replace it with sort of special Social Security IOUs.
  Now, if I remember correctly, last year we were paying the Social 
Security trust fund like 3.1 percent interest

[[Page H3392]]

for those borrowed moneys. So when you see some of the future slides 
here, or boards, you will actually see, here is the trust fund balance; 
but, also, here it is with some of the interest revenue that we also 
pay ourselves back.
  So think of this craziness. Functionally, as a society, we borrow 
money to pay back the borrowed money because that cash that we took out 
of those trust funds has long since been spent. But on this board, in 
10 years, the Social Security trust fund is cut in half. In just a few 
years, the Disability Insurance Trust Fund is empty, and if you 
actually can see it, the hospital, the Medicare part A, which is the 
only part really with the trust fund, in a few years, it is also down 
to zero.
  So just getting our heads around, this is reality, this is math, but 
it is better than it was a year or so ago, but it is still a crisis. 
And these, I am going to put up two of these boards that is just going 
to show--do you see this sort of flat inflection here? That is actually 
part of the good news because where you see--last year, it would have 
been a constant curve downward that we were depleting the funds. As you 
know, they have gone negative this year, meaning that the revenues 
coming out of Social Security is actually greater than the revenues 
coming in, except for, since the tax reform and some of the economic 
expansion, all of a sudden we have hit a bit of a plateau.
  CBO actually had it looking like it was going to last for a couple of 
years. I am actually much more optimistic than some of their baseline 
numbers, but that is that actual mathematical reprieve. You also see 
the two lines there. The variance in those is what we are also paying 
ourselves back as a spiff in interest.
  So this one is Social Security, Old-Age Survivors Insurance Trust 
Fund. But then when we actually move over to the hospital fund--and 
important, you will see this in future slides. Social Security, in many 
ways, isn't my crisis--isn't our crisis, because it is a defined 
benefit. Fixing it, the math is actually fairly easy.

                              {time}  1900

  It is Medicare that becomes so incredibly difficult. And Medicare, as 
you are going to see in a couple of future slides, is a much larger 
financial issue in our near future.
  So you actually just see sort of the same thing in that even the 
hospital trust fund now is moving negative, meaning we are taking more 
money out of it than is going in. Yet, you do see the little bit of the 
plateau we are getting because of the current payroll tax.
  Just a point of reference on that. If you actually looked at the Tax 
Foundation's numbers when the tax reform was coming out, they actually 
had, I think it was, just shy of $300 billion over the next 10 years in 
new payroll tax, FICA revenues, and that actually reaches into this 
area.
  This is a chart that I have never seen on the floor before, but is a 
really interesting one, because I think a lot of us don't really have 
our head around where does the money in Medicare come from? And, I am 
sorry, I know this is a little hard to see, but if you see this, this 
is the entire Medicare.
  This 45 percent up here, that is actually general revenue. We are 
reaching into the General Fund and paying it out to hospitals and 
doctors and durable medical equipment.
  The 36 percent there, that is actually the tax revenue. That is the 
payroll tax. That is within our FICA.
  Then we also have some taxes on higher income earners and Social 
Security benefits, and it comes into here. And then you see this 3 
percent down there. That is actually revenue that we pay ourselves. So 
we borrowed the money, gave it to the General Fund, spent it, but we 
paid ourselves last year what was the 3.1 percent interest. Well, that 
is what that 3 percent is down there.
  So if you actually add it up, about half of this, half of what we 
spend in Medicare is General Fund, half is coming in through the 
payroll tax.
  So if you look at part A, the hospital trust fund, okay, that is 
almost all payroll taxes. But if you start looking at part B and part 
D, you see the orange there, 75 and 78 percent respectively, that is 
all coming out of the General Fund.
  On occasion, when I have actually done some of these presentations at 
home, you will get the hand that goes up and people think that it is 
all paid for by the payroll taxes. That actually creates sort of this 
weird misunderstanding of it is not all within the trust fund. Almost 
half of what we spend in Medicare actually is coming out of the General 
Fund. And there is actually where, as we see the substantial growth, 
you see General Fund spending growing, and why a substantial portion of 
that General Fund growing is actually part of this.
  A couple of the other slides, just to understand, as we have 74 
million of our brothers and sisters who are baby boomers moving into 
retirement right now--what is it, about 10,000, 10,300 every single 
day--it actually has a little bit of a steepening curve over the next 3 
or 4 years.
  Now, the headline on this is really important: Social Security, 
Health Entitlements, and Interest Costs. So you have to put in the 
paying interest on all of the money we have borrowed as a society. 
Driving 91 percent of the 2008 to 2028 spending hikes.
  Remember my number before, that if we just do Social Security and 
Medicare over the last 10 years, 72 percent of the increased spending 
we had as a government, in the Federal Government, was just the growth 
in Social Security and Medicare. Okay. But if you add in also interest 
on top of it, it goes from 72 now to 91 percent. So understand, those 
are the levers that are going to squeeze out so many of the other 
things that are happening, but also the greatest fragility to being 
safe here.
  Let's actually go onto the next board because I think it helps 
actually sort of show where we are going. But what is also important 
here is, as you look at these, those on the bottom, you will actually 
see things like defense and discretionary spending all being fairly 
flatlined, even with the most recent budget appropriations bill. If you 
actually look at it over the next decade or over the next three 
decades, almost all of the growth in spending comes from the two 
programs and covering interest costs.
  This one is really noisy, and we will put these up, or put them out. 
Over the next 30 years--this one actually goes from 1960, but when you 
get here, look at the growth. You are heading towards a time, 2047. It 
seems like a lifetime from now, but you are in 2018 right now. So reach 
out 20 years from now, reach out 30 years from now.
  Defense is 2.7 percent of spending equal to the size of the economy, 
so this is a per GDP slide. But the explosion, you see that red area, 
in that time when I am hopefully well into my retirement, 15.6 percent 
of the entire size of the economy. So we are going to reach in and 
take--say the economy is this big--we are going to take 15.6 percent of 
that, and that is just going to be Social Security and Medicare. And 
another 6.2 percent will be covering the interest costs.
  It is unsustainable, when you start to realize you will be 
approaching 30 percent of the entire gross domestic product of this 
country in Federal spending. It is not defense, it is not nondefense 
discretionary, it is actually not even some of the other entitlements, 
even though sometimes that is easier to talk about behind these 
microphones. It really is where we are demographically as a society.
  And look, demographics is our destiny. We can't pretend it is not 
happening. We are all getting older. It is the nature of life. And 
understand also, these numbers are assuming no wars, no recessions, no 
disasters. These are just baseline numbers, and that should make this 
really, really scary.
  So how do I convince our voters and my fellow Members that we have a 
little bit of reprieve right now because we are in a time of terrific 
economic expansion, terrific employment, and good numbers coming in on 
the FICA tax? How do we use this as a moment to actually say, let's be 
adults, let's come up with something much more elegant than just 
entitlement reform? But there is actually ways where we can keep our 
promises to our seniors, keep our promises to those who are heading 
into their retirement, but also have it so we are not all here 15 years 
from now saying we have hit a deficit crisis: we can't sell our bonds, 
our interest rates are exploding, everyone is going to be taking huge 
cuts. Let's attack it today.

[[Page H3393]]

  Because I believe if we do things that maximize economic growth, 
things that actually help our Nation's demographics, if we adopt a very 
aggressive adoption of technology, particularly in the healthcare 
space, and also provide some options within the entitlements, it is all 
stuff we should have done 10 years ago, but we have been given a little 
bit of reprieve right now because of what is happening in the economic 
growth.
  So here is something to get our heads around. If you actually look at 
the numbers, you see the first two bar charts, that is Social Security. 
It turns out the average American will put in about $543,000 over their 
working life. And this is someone who would be retiring right now. And 
they are going to get out $616,000. So, okay, a little variance. Now, 
the problem is we have obviously already spent all of that money that 
was in the trust fund and we put IOUs in it, but still, it is a fair 
deal.
  Medicare is our crisis. Apparently, someone who is retiring today 
will have put in about $140,000 in Medicare taxes. But the person who 
retires today is taking out about $422,000. So $140,000 in, $422,000 
out. Now multiply that by just 74 million of us who are baby boomers 
and you start to understand the size and the scale of where the gap is 
coming from. It is math.
  I desperately wish there was a way to blind the political rage and 
just say, it is math, and the math will always win. And if we would 
step up and be less political and more like accountants for a moment--
and I am sorry, I know as Republicans that is often our problem, is we 
sound more like accountants--but the violence, the cruelty we are going 
to do to our society if we continue to avoid the reality of the math, 
in a decade or decade and a half from now when the crisis is upon us, 
our ability to fix it will be very, very difficult. It is going to be 
difficult right now, but it is doable. There are approaches to make 
these numbers work.
  This is also, for those folks who are now deficit hawks or newfound 
deficit hawks, a time for a moment of honesty and reality. Over the 
next 30 years--and this is not inflation adjusted, so for those of you 
who like to do constant dollars, you would probably reduce the number 
by about a third--but this is over the next 30 years. So if you plan to 
be alive for the next 30 years, this is what you are facing today: $82 
trillion in cash shortfall; $78 trillion of that is just Social 
Security, Medicare, and the interest on that shortfall.
  So all of the other things that we talk about: Oh, it is defense 
spending. No, it is not.
  Oh, it is other nondefense discretionary. No, it is not.
  It is other entitlement programs. A little bit, but not really.
  It is the two programs that are earned entitlements that we, as 
Congress, in its wisdom over the last few decades, didn't make the math 
actuarially sound. And just pretending it is not there doesn't fix it.
  So one more time, think about this. Over the next 30 years, the 
Social Security deficit, $18.9 trillion; the Medicare deficit, $39.7 
trillion; and then the interest we are going to spend on those 
shortfalls is another $23.4 trillion. That is $78 trillion.
  Now, if you want to use inflation adjusted, just reduce it by a 
third.
  This is the greatest threat to our society. Because do you see at the 
very end, do you see the little blue, the rest of the budget actually 
is in balance over the next 30 years. And that is actually using the 
CBO scores, which I think sort of underestimate current growth. But 
that is just the math. This isn't Republican or Democrat; it is math.
  Yet, it is the greatest threat to our society. And yet, when I stand 
in front of my constituents and we will have a meeting and we will 
discuss what is the greatest threat to society, the hands go up and it 
becomes all sorts of things, because this is really hard, it is really 
big, it is really difficult, and it is really, really, really 
important.
  So as we walk through these, I need to do--and forgive my stacks of 
paper, but sometimes when you are trying to do the math, this is one of 
those where you lay out the Excel spreadsheet and it goes on and on and 
on and on.
  Think of this. In 9 years, Social Security and Medicare, without the 
interest, will be 10.3 percent of the entire economy. So the United 
States Government will say: Hey, the economy is today what the GDP is, 
$21 trillion, $22 trillion, $23 trillion. Hopefully, 10 years from now, 
it is substantially larger. But 10 years from now, it is going to be 
over 10 percent is just being reached in and spent on Medicare and 
Social Security. It is the math.
  But actually, over the next decade, it gets up into the 12s, and then 
a little while after that it goes up further. But that is of spending 
equal to the entire size of the economy. That is why it becomes so 
incredibly important that part of that holistic solution of how we save 
these programs is also that we maximize economic expansion.
  So when we get into the discussion that has happened around here a 
lot lately, where we talk about the tax reform and the jobs and 
opportunity it is creating, I have had this running conversation, and I 
saw it on the floor here I think yesterday, where someone is pounding: 
Well, tax reform is not paying for itself, tax cuts never pay for 
themselves. That is partially true. Certain parts don't.

                              {time}  1915

  Certain parts are political-societal decisions to allow families to 
keep more, but there was an interesting little set of numbers. This 
often happens when you have your spreadsheets and everything laying out 
in front of you and you are going over them.
  So in December, the Joint Committee on Taxation, which, as you know, 
was our scorekeeper when we did tax reform, actually said: Hey, here is 
what we think the tax reform costs in the static; here is what we think 
some of the dynamic growth is going to be.
  But they were in two different reports.
  I took the business numbers, just the business portion, to see what 
it was doing growthwise. I thought you would all find this interesting, 
or maybe I am the only one.
  So it turns out that the business tax reform, I think the title II 
portion of our reform bill from December, said, hey, businesses, $653 
billion in less taxes, revenues to us as a government over the next 10 
years, but the international business portion of the book, we are 
actually going to take in another $324 billion.
  So $653 billion, if you are here, but because we are bringing those 
moneys, the repatriation of those moneys back in and actually 
encouraging companies to actually come back to the United States and 
work here, we actually gain $324 billion.
  All right. So I am still negative $329 billion over the 10 years on 
those C corps, the big corporations, but then on the next Joint Tax 
report, they talked about the dynamic scoring, what they saw as the 
growth estimates.
  Not to bore everyone with it, but we have already seen the CBO has 
actually lifted up the growth estimates from even December, so there 
are good things happening there. So, hopefully, these numbers would 
actually expand from that.
  But if you actually put the growth back in, they were estimating $384 
billion of growth in new revenues because of the bigger economy, more 
business spending, more jobs, more opportunity. Now, most of that is 
from what was happening in those corporations.
  So it turns out the business portion on the tax reform bill, in the 
Joint Tax's own numbers, actually is about $55 billion to the upside in 
their own modeling over the 10 years. I partially put this up because I 
was embarrassed I didn't see it in their math sooner, but that is what 
it is.
  So I guess, ultimately, Mr. Speaker, I have a couple messages here. I 
understand we are sort of in a time of very difficult politics, but we 
need to sort of grow up and deal with the reality.
  We are getting older as a society. We have made lots and lots of 
promises. We need to keep those promises. There are ways to do it, but 
every single day we don't step up and deal with the reality of math, we 
make it that much more difficult for all of us.
  I am 56 years old. My wife, I probably shouldn't say this, but she is 
exactly my age. We are incredibly blessed. We have a 2\1/2\-year-old 
that is the best little girl ever. I have a mug that says so. She 
actually was with us here on the floor of the House last week. Maybe it 
is partially because of my little girl that I am going to double down 
on my efforts here.
  How do I get our friends on the left and our friends in the majority 
and say

[[Page H3394]]

maybe it is time we do the most difficult thing any of us would ever do 
in our elected career, and that is actually take on the biggest issue 
of our times, and that is the unfunded liabilities and the promises we 
have made?
  Do we do a BRAC commission, not to close things, but to actually look 
at everything because is a little bit of the solution reforming how we 
deliver healthcare and Medicare?
  Is a little bit of the solution a different type of immigration 
system that maximizes economic expansion and benefits and demographics?
  Is it everything all together? Is it maximizing economic expansion so 
payroll taxes become much more robust?
  Is it actually creating a path for those who have been disaffected or 
are on certain types of income-based social entitlement programs that 
move them back into our workforce because there is opportunity?
  The answer is we need to do it all at the same time.
  But how do you get this body, with all the noise that is around us 
constantly, all the people banging on us constantly, the chaos that is 
today's media, which is an entertainment medium, get a number of people 
to pull out a calculator, pull out some great econometrics, understand 
the demographics, and do what is necessary to deal with the greatest 
threat to this country? And that greatest threat is not military. It is 
actually debt and promises we have made.
  As you have already seen on the slides, everything else is pretty 
much in balance over the next 30 years. What blows us up is the 
promises we have made in Social Security and Medicare. It is fixable, 
but we cannot continue to wait.
  The last thing I want to share, and I know I am backtracking a bit, 
there continues to be more good news that comes in from the tax reform 
and the positive things that are happening within the economy; but 
there was a great article today about what is also happening at our 
State and local levels, and this sort of fits into that unified theory 
of, if you are going to start to step up and do what is difficult, do 
it in a time when you have economic expansion. It turns out revenues to 
our States look like they are taking quite a pop upward.
  Also, another article, it turns out that the International Monetary 
Fund did a calculation and fairly stepped up world growth for the next 
couple years and actually gave half the credit for that growth to the 
U.S. tax reform, meaning what we did here in the United States actually 
made a poor family on the other side of the world's opportunities 
better.
  If you actually start to look at all the things that are going on 
around us, even in a time of turbulent politics, we have some good 
things happening.
  Now let's step up and do the really hard things, because the hard 
things are how we are going to be judged in our future when all of us 
as elected Members leave here. Will we have saved the country from its 
greatest threat, which is the debt that is going to come crashing down 
on us very, very soon?

  Mr. Speaker, I yield back the balance of my time.

                          ____________________