[Congressional Record Volume 165, Number 5 (Thursday, January 10, 2019)]
[House]
[Pages H454-H457]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          OUR GREATEST DIFFICULTY AS A SOCIETY IS DEMOGRAPHICS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2019, the Chair recognizes the gentleman from Arizona (Mr. 
Schweikert) for 30 minutes.
  Mr. SCHWEIKERT. Mr. Speaker, this is one of those opportunities, now 
that we have the new session of Congress up and running, to come up 
here and sort of walk through some of the math and the reality.
  And, look, it is always fascinating when we hear, you know, the 
discussion of, well, there is $5 billion for security and the barriers, 
but I just want

[[Page H455]]

to say to everyone, before we sort of go into the presentation of the 
actual math of what is going on in our society, you do realize the 
total amount that is being discussed as the plus-up for the border 
security is less than we borrow in 2 days. It is less than 2 days of 
borrowing.
  I mean, we live in this world of absurdity where the politics 
actually have outstripped sort of the reality and the math.
  And, look, I accept that there is part of our society that so 
desperately doesn't want the White House to ever get any of its 
priorities, they will burn the place down, but come on.
  Being from a border State, you know, come and see the fentanyl, the 
heroin, the human exploitation that is happening not only across the 
country, but particularly for those of us that are from border States.
  But that isn't why I had reserved tonight's time. I actually want to 
make sure that once we get beyond this partial shutdown and we maybe 
get back to the business of governing, we actually start to have some 
understanding of the reality of what our society is up against.
  In the first chart I have brought I am going to try to make an 
argument that our greatest difficulty we have as a society, as a 
country, is actually demographics. This is something we often don't 
talk about, because it is not something we really can do a lot about, 
but the reality of it is, as a society, we are getting older very fast.
  There was an article just last week saying we are growing older the 
fastest in 80 years. You have seen the crash in our birth rates. I 
mean, you do realize that our birth rates are nowhere near what we call 
replacement rates as a society. We are down to, what is it? What do 
they say? 1.76 births, when you need to be up around 2.1 just for 
population stability.
  What does that actually mean? Well, we are going to walk through a 
number of these boards and start to understand what that fiscal impact 
means if you want to keep our society's promises on things such as 
Social Security, Medicare, and how we deal with it.
  I actually want to give sort of an optimistic idea. We believe we 
have sort of a five-point idea, but it is going to require my brothers 
and sisters on the left, my friends on the right, and people in between 
to pull out their calculators and think.
  The fact of the matter is I often feel like I work in a math-free 
zone.
  Just a bit of trivia. In 11 years, you and your partner, so two 
people, will be supporting one retiree. In 11 years, two workers for 
every one person in retirement. Think about that.
  No matter what you think about politics and who pays and who doesn't 
pay, just think about that structurally as a society: two workers for 
every one person in retirement, and that happens in 11 years.

                              {time}  1845

  It is hard to talk about because, let's face it, we are Members of 
Congress. We often like talking about the shiny object, the thing that 
when we walk out these doors, the reporter is going to stick the 
microphone in our face, and it is going to be the shiny object of the 
day instead of the structural reality of what threatens our Republic.
  The first slide here, all I want to be absorbed is this is 1965, a 
long time ago, 50-some years.
  Do you see the red? That is what we call mandatory spending. Those 
are things that are on autopilot.
  The most elegant way I think to describe that is that you have Social 
Security and Medicare. Those are earned entitlements. You worked a 
certain number of quarters; you paid in; and you get those benefits.
  There are other entitlements that fall under this. If you are part of 
a certain Tribal population, we have a treaty obligation. Or if you 
fall under a certain income, you get these benefits. But they are 
mandatory. They are built into the base. We don't vote on them. They 
are on autopilot.
  In last year's budget, actually, well over 70 percent of all the 
spending was on autopilot. It is what, ultimately, is consuming the 
budget.
  We are going to do a couple of these slides, just to try to get our 
heads around this. Let's swap to the next one. This is just to sort of 
help the breakout.
  My understanding is that in this coming budget year--you need to 
think about this--defense spending in the 2019 cycle will basically be 
the same as Medicare.
  How many of us, when we go home to talk to our constituents, somehow 
think defense is two-thirds, a third of the budget? Basically, as you 
start to look at the charts here, you will actually see--and these are 
the 2018 numbers.
  As you walk through, you see the blue. We will call that the sea foam 
blue. That is Social Security. That is 24 percent of all our spending.
  If you come over here, national defense is this rust. That is 15.
  Last year, Medicare was actually a little over 14-point-something. 
This year, Medicare and defense are almost the same.
  With our demographics--remember the baby boom, 74 million of our 
brothers and sisters who were born in that 18-year period who are baby 
boomers--the peak of the baby boom right now is about 62, 63 years old. 
They are just starting to move into the years where they will receive 
those earned benefits.
  Then you come over here to Medicaid and other income programs, net 
interest--remember, interest is a mandatory. You have to pay it to 
protect the sanctity and full faith and credit of U.S. debt. You start 
to realize, the amount that we, as Members of Congress, actually get to 
work on starts being about a quarter of all the spending.
  It is not driven, really, by current policy. These are previous 
policies. It is driven by our demographics. We are getting older very 
fast.
  This is the slide that is the most devastating to get your head 
around. Yes, I have not adjusted this for inflation, so these are 
stagnant dollars. When you use a 30-year time window, you can deduct 
about a third. Eventually, I will get this slide up, and I will do the 
interest deduction.
  But think of this: Over the next 30 years--2018 to 2048, a 30-year 
window--what is causing an $84 trillion budget deficit? It is 
substantially interest, the shortfalls in Social Security, and the 
shortfalls in Medicare. The rest of the budget has about a $16 trillion 
surplus in what we calculated as revenues to spending.
  That is really important to get our heads around. It is fascinating 
that, when you show these numbers, I will get people who will protest 
the math. It is not Republican math; it is not Democratic math; it is 
just math.
  The reality of it is that we have these massive, unfunded liabilities 
that are basically in two programs, Social Security and Medicare, and 
we have a moral obligation to keep our promises as a society.
  So how do we get there?
  The next one, I am just going to put this one up so it helps 
reemphasize the way this works. Think of this: From 2008 to 2028--so 
that 20-year window--91 percent of the increased spending in this body 
comes from three things: interest, the growth in Social Security, and 
the growth in spending in healthcare entitlements.
  When you see my kind come behind these microphones, and we speak as 
eloquently as we can, unless we are telling the truth about the 
demographics, we are actually not telling the truth of what is really 
going on. I know it is hard. It is math with lots and lots of zeroes. 
But this is the reality. When you look at the charts, things like 
defense, nondefense discretionary, even some of what we call the other 
entitlements, they are substantially flat over that 20-year period.
  We are getting older very fast as a society, and our birth rates as a 
society have collapsed. We don't have enough children right now, over 
the last decade, to even be at replacement rates. We are basically 
following the trend of the rest of the industrialized world.
  You have to think that through. What does that mean for our ability 
to promise Americans, as they move into their senior years, that 
retirement security? That, I think, both Republicans and Democrats all 
agree we must have, but, yet, then we do everything we can to avoid the 
actual math.
  The next slide I want to go to is to, once again, reemphasize the 
reality of what is happening in our society population-wise. For this 
next chart, I am using Arizona, because that is my home. But guess 
which State appears

[[Page H456]]

to have the biggest fall in birth rates? Arizona.
  Now, please be merciful on me. I am going to try to explain something 
with a lack of sort of elegant language. I have had multiple 
conversations with a couple of folks who make their living just fixated 
on demographic numbers, and they, partially, are giddy about this for 
one thing in society. They sort of come back and say: Look, in previous 
demographic modeling, we thought parts of our Hispanic populations, 
parts of our LDS populations, and parts of others were going to 
continue to have very high birth rates, and that was going to provide 
some population stability.

  But the fact of the matter is the melting pot, apparently, is 
actually working in our society. In our country, the melting pot is 
working. One of the ways that demographers refer to it is say: Look, we 
are all not having children like each other. The likelihood you will 
have a similar education, live in the same neighborhood, and now also 
not have children like each other, you see it in the math.
  So, on one hand, yes, the melting pot is working. That is great for 
our country. We are Americans. We are a diverse lot, but we are 
Americans.
  Now we need to deal with the social entitlement problem. That is, in 
11 years, if I have two workers for every one person that is retired, 
and my birth rates are continuing to fall, how do you make the math 
work? How do you keep your promises?
  Remember my first quip when first coming up to the podium: We are 
having this dispute over an additional $5 billion of border security 
and the effects that has on humanitarian aid. But the absurdity is that 
it is less than 2 days of borrowing right now, and almost all that 
borrowing is driven by--you saw it on the previous slide--our 
allocation to cover our interest costs, Social Security, and the 
healthcare entitlements, where almost all the spending growth is.
  This is a reality, but it is fascinating. The beginning of this is 
2000. In 2000, we were basically about 3.1 in birth rates. Fertility 
rates have collapsed. When you actually start to do the mean 
nationwide, we are now down to--what is it?--1.67.
  We need to actually couple that in with the massive unfunded 
liabilities we have and start to understand that the greatest threat to 
our country right now is massive entitlement promises and the lack of 
resources to cover them.
  I have done it before, and I am going to do this about every week. I 
am going to bring in different boards. I have a series of boards that 
show almost every idea that gets quipped out of: ``Well, we will raise 
tax rates to this, or we will do this.'' None of them come anywhere 
close to actually covering the scale of our obligations.
  Right now, I want to do one or two things that I actually believe are 
optimistic. I am going to give you sort of a five-point idea. This is 
something I have been talking about in Arizona and partially around the 
country and other places. I need us to think about, okay, this is the 
math reality. We have these massive unfunded liabilities that are 
basically driven by two programs and our interest obligations. How do 
we fix it?
  Let's actually walk through a list and understand it. I call this the 
unified theory because we have to do all of them. We have to do all of 
them at the same time, and we have to fixate on the growth aspects they 
all bring.
  The first one I want to talk about is immigration. As we go through, 
partially, the political theater, as this body has been doing with 
regard to immigration, let's actually take a step backward and say: 
What immigration policy maximizes economic growth for the country so 
that growth helps us pay our promises, so people will receive their 
Social Security and Medicare?
  We will have to move to a talent-based immigration system, because, 
as the rest of the world has done, whether it be New Zealand, Great 
Britain, Canada, or Australia, the rest of the world has basically 
moved to a talent-based system because they figured out it maximizes 
economic growth.
  In our case, hopefully, we would move to a substantially talent-based 
system. You still are going to have compassion. There will still be 
types of visas for our brothers and sisters around the world that meet 
our standards of compassion. But with that, I believe, you also are 
going to have to put in math shock absorbers that deal with the fact 
that we are going through a cycle right now with birth rates falling. 
Would you adjust certain portions of that talent-based immigration 
population to deal with something we call population stability for the 
future?
  Remember, this is about maximizing economic growth, so we can keep 
our promises as a society.
  The slide I have next to me is sort of as we deal with the next 
couple issues. So I believe a major reform in the immigration system 
can maximize economic expansion.
  The next thing is a fixation on growth. When we did tax reform, as we 
get together and start to realize this supercomputer we carry in our 
pocket, oddly enough, could be the greatest regulator in our society 
because it can crowd source information. I have done presentations on 
this in the past.
  Instead of building bureaucratic models, where we make people fill 
out lots of pieces of paper and shove them in file cabinets, how about 
moving to a modern system?
  As a simple example, how many of you use Waze as a way you drove to 
your office, or to work, or to pick up the kids? That is a crowd source 
model that gives you information.
  It turns out that same concept can actually be a way to regulate air 
quality and know that we are safe without building a bureaucratic 
model. It can be so many things.
  We need to fixate on what maximizes economic growth in our society, 
and that is Tax Code; that is regulatory code; that is removing 
barriers, removing the barriers at the State, local, and Federal level 
that encourage risk-taking entrepreneurship, the things that create the 
economic disruptions, so we grow.

                              {time}  1900

  The third thing, and that is what that chart is about, we call it 
labor force participation. We got the report last week that was 
actually in some ways wonderful and in some ways it is heartbreaking.
  We are giddy that we broke 63 percent labor force participation. We 
hit 63.1. I can show you a stack of articles from the last decade from 
really smart economists, mostly on the left side. They said we are 
never going to get back to 63 percent labor force participation because 
we are getting older as a society, we have so many worn-out workers, or 
whatever the current pop cultural term is.
  Well, we broke through 63.1 last month in December. But understand, 
it was only a decade ago we were pushing around 67 percent labor force 
participation. What does that mean? It means we have substantial 
portions of our population who, for lots of reasons, whether it be 
drugs, whether it be certain educational aspects, whether it be 
societal expectations, are not in the labor force.
  I have actually done it before, and we will do it again over the next 
couple of months. I will do some charts where it is actually a really 
interesting sort of barbell-type curve where we have lots of young 
people--mostly males--who are not in the workforce, and then older 
parts of our population who are choosing maybe the rational thing, to 
retire.
  How do you build a society that encourages a person to stay or to 
enter the workforce? So as we have debates around here where the left 
wants to talk about certain types of income assistance, we in the right 
will talk about: How do you take that and make it a reward to work?
  We need more of our population to work. If we could go right now from 
that 63 percent labor force participation and get back to that 67 that 
we were at just a decade ago, it is amazing how it helps.
  So the third thing I am going to give you is we need to have 
everything, whether it be from the discussion of SNAP--food stamps--to 
incentives in Social Security and Medicare, to encourage someone to 
stay in the workforce longer, to a young person in their student loans 
to actually enter the workforce and begin that process.
  Every program we as a government, as a society, participate in, we 
should maximize the incentive to work because we need it if we are 
going to keep our promises.

[[Page H457]]

  Remember, this is a loop. Everything here we talk about is, if we are 
going to keep our promises on Social Security and Medicare, we have got 
to have the economic expansion that provides the resources.
  The next one I am going to give you is the one that I am most 
optimistic about. And let's put that board up. But this one is a little 
harder to talk about, so I will beg you to bear with me.
  When we have had debates around here on the ACA--some people know it 
as ObamaCare--or our Republican alternative, or this healthcare debate, 
I need everyone intellectually to strip away our partisanship and take 
a step backwards. Almost all of the debates have been about who gets to 
pay.
  The ACA just shifted lots and lots of the spending onto the 
government. Some of our alternatives were actually trying to spread the 
cost out more across the private payer populations. But we have done 
almost nothing to disrupt the cost curve.
  So part of the thought experiment I want us all to engage in is: How 
many of us went to Blockbuster Video last weekend? I know it is a 
little starky, but think about it. Didn't it feel like almost overnight 
you no longer stood in line at the local retail strip center at 
Blockbuster Video to get the little silver disk that you were going to 
take home and shove into your Blu-ray player? You would now go home and 
you hit a button and you get Netflix, or HBO Go, or Hulu, or whatever 
you are watching.
  That is what we call a disruption. Almost overnight, society figured 
out, hey, this is cheaper, faster, better.
  How do we take that sort of concept of disruption and make it part of 
healthcare? How do you say, instead of playing this game that we have 
played over and over of just trying to move around who gets to pay, we 
are going to engage technology in such a fashion that we disrupt the 
cost curve of healthcare delivery?
  The fact of the matter is there is so much technology rolling out, 
this is about to become your primary care physician.
  How many of you have seen the articles of something that looks like a 
kazoo, a large kazoo that you blow into and it tells you if you have 
the flu virus. The article from last week, something a little bigger, a 
cone over your nose and mouth, you blow into it and it tells you if you 
have a bacteria.
  There is the Apple Watch that will help you manage your arrhythmia. 
There is all of this technology rolling out. There are things, I am 
told, right now at the Consumer Electronics Show, a couple of hundred 
items being shown at this moment that are all technology--we like to 
refer to them as digiceuticals in our office--that will disrupt the 
cost of healthcare if we can break down the regulatory legal barriers, 
whether it be on how we pay for them or the fact that many of them 
provide a level of autonomous healthcare. Our system as it is regulated 
and compensated today does not, was not designed for a level of 
autonomous.
  We have a company in Scottsdale that now has four or five locations 
up. I guess they used to be Theranos booths. I think they are at 
Safeways, if I am allowed to say such a thing.
  You go in and you functionally fill out your information in an iPad. 
You go into a private booth. There is an avatar on the screen. You grab 
the scope--and forgive me, I am not a medical person--and you shove it 
down your throat, in your ear, in your nose. It tells you how to move 
it. It tells you what they need.
  You put your hand on something. It can do a pulse and the 
temperatures and other things. And an algorithm does the calculations. 
Apparently, the algorithm is amazingly accurate.
  What would happen if that type of healthcare became available to all 
of us? We crash the price. We dramatically change the availability. 
And, yes, these things are scary because it is a disruption of 
technology into our economy, but we don't have a choice.
  You saw the charts before. The greatest fragility in our society is 
promises we have made that we have no money. And almost every solution 
gets us nowhere close to the types of resources needed. We must have a 
disruption in the cost of delivery.
  And part of the thought experiment, it has been a year or two, but we 
have seen things like the contact lens that can calculate your blood 
glucose, that talks to your insulin pump.
  Because we do know that more than half of our healthcare costs in 
this country are for the 5 percent of our brothers and sisters who have 
chronic conditions, what happens when those digiceuticals help manage 
those chronic conditions to prevent the crashing?
  How about the pill bottle that makes sure that--we know that 50 
percent of pharmaceuticals are not used properly. The solution becomes 
a technology one when all of a sudden your phone rings. The beeper goes 
off. You haven't taken your hypertension medicine that morning.
  We desperately need this body to start to understand this. And is 
that Republican or Democratic? It is technology. Now, I am sure, 
eventually, we will break down and it will become a Republican issue or 
a Democratic issue, whether it be because which lobbyists go where, but 
for right now, it is just a solution.
  The last one I will give you of my five is when we do all of this 
progrowth, this ability to crash the cost of delivery of healthcare, we 
are going to then have to have a really honest conversation of what we 
must do, particularly in Medicare, to modernize the design, deal with 
the reality that life expectancies for those who make it into 
retirement are going up.
  Many of us will spend a third of our life in retirement. Do we need 
to change the incentives within those individual programs on how we 
take our benefits? How we manage those costs? How we participate in 
them?
  We have some really interesting ideas: Would you make adjustments for 
folks who may have the ability to carry previous healthcare options 
with them?
  But I truly believe we need to do all five of these, and we need to 
do them almost immediately because every day we wait, another 10,300 of 
our brothers and sisters, Americans, reach 65 and start to move into 
their benefits. And every day we wait, we avoid the reality of math.
  I guess there are a couple of smart people out there who many years 
ago said: Tell me your demographics and I will tell you your destiny.
  I have just told you our demographics. I have just shared with you 
the scale that is off the charts on the promises we have made and our 
lack of resources, and I believe I have actually begun to give an 
approach of a unified theory of how we make it work and how we make it 
through, functionally, our 74 million baby boomers who are moving into 
retirement and how we move through that population bubble so someone 
like my 3-year-old daughter also has the economic opportunities that I 
have had.
  Mr. Speaker, I yield back the balance of my time.

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