[Congressional Record Volume 165, Number 120 (Wednesday, July 17, 2019)]
[House]
[Pages H5991-H5993]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          KEEPING THE PROMISE OF SOCIAL SECURITY AND MEDICARE

  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, tonight is a continuation of a series I 
have been doing on the floor every other week, depending on the chaos 
of the floor schedule. I take about a half an hour and walk through 
things I see in the numbers and, in many ways, express my intense 
frustration at both the Democrats and many of my brothers and sisters 
on the Republican side for not taking a step backward from the daily 
chaos that has become the House of Representatives to realize that the 
single biggest threat to the cohesion of our society is demographics. I 
am going to walk through what that means.
  The reason I always put up this particular board is that we have 
developed, in our office, a five-prong attack on what society does 
financially to be able to keep the promises of Social Security and 
Medicare.
  The demographics I was speaking of are those of us who are baby 
boomers. There are 74 million of us born, functionally, in an 18-year 
period, with 10,300 of us retiring or turning 65 every single day.

  The math is devastatingly ugly. My instinct is maybe that is why it 
is avoided in conversation around here, because the math is difficult. 
It is uncomfortable. It is also real.
  Something I don't often do, but I want to read a simple paragraph 
from a June 11, 2019, analysis from the Manhattan Institute that was 
analyzing the numbers from the Congressional Budget Office. They are 
talking, right now, about just Social Security and Medicare. ``Over the 
next decade, 91 percent of the projected increase in budget deficits, 
which are set to approach $2 trillion, comes from the increased cost'' 
of Social Security, Medicare, and the associated interest.
  Think of that. In the next decade, when we talk about the growth of 
the debt and deficit, 91 percent of that is just, functionally, the 
demographic growth for Social Security and Medicare.
  Another way to think about that is, every 5 years, just the growth in 
Social Security and Medicare equals the entire Defense Department.
  If we are going to keep our promises as a society--these are earned 
benefits. We made a promise as a society, avoiding the reality of the 
math.
  Think about this part of this paragraph. ``Over the next 30 years, 
Social Security and Medicare are projected to run a $100 trillion cash 
shortfall, including resulting interest costs, while the rest of the 
budget is projected to run a $16 trillion surplus.'' Think about that 
one more time--over the next 30 years.
  I have a 3\1/2\-year-old little girl. Doesn't she deserve to live in 
an America that continues to be prosperous?
  With these sorts of numbers, it is impossible. Functionally, our debt 
deficits, the attempt to try to keep some of our promises, is going to 
consume everything around us.
  In previous times on the floor, and I know I am going to be doing it 
again, we brought in a series of what the left often says: ``Well, we 
will tax the rich more. We will do this and this.'' They only cover 
tiny portions. The scale of this doesn't work in our modern rhetoric.
  Think about that last sentence again. If you remove Social Security 
and Medicare, over the next 30 years, the budget has a $16 trillion 
surplus. One of our boards has a higher number because the board is a 
bit out-of-date. But the budget is what we call a cash surplus. The 
associated revenues exceed the associated expenses.
  If you add in Social Security and Medicare, it is a $100 trillion 
deficit, with its associated interest costs.
  What are we going to do? We believe we have a fighting chance. There 
was a time, a decade ago, if you did certain senior options and those 
things in Medicare, gave some pricing power and options, you could see 
where you could flatten out some of that debt-to-GDP curve and make the 
baby boomers survivable, economically.
  We have waited too long. We have missed that window. Now our argument 
is that we have to do everything. We have to do things that grow the 
economy, a Tax Code that maximizes economic expansion, trade that 
maximizes economic expansion, regulations, smart regulations, using 
technology that maximizes economic expansion.
  Labor force participation, what do you do to encourage workforce 
entry? We are doing remarkably well right now. We still have a problem 
with millennial men. We still need to find ways to create some spiffs 
within the Tax Code, within the retirement parts of the code, to 
encourage seniors who are healthy, wish to do it, and are prepared to 
do it, to stay in the labor force.
  We have to do things to encourage family formation and to move to an 
immigration system that is talent-

[[Page H5992]]

based, so it maximizes economic vitality.
  We are going to have to look at the earned entitlement and things we 
can do to put spiffs and incentives within there to change the cost of 
healthcare, to encourage staying in the labor force, smart 
decisionmaking.
  One of these is really important to me. I have spent a lot of time on 
the floor--aggressive adoption of disruptive technology, particularly 
in healthcare.
  In this body, we have a running debate. The Republicans say our 
healthcare reform is who should get subsidized, who shouldn't, and we 
will add some market forces. The Democrat side is: Well, we won't add 
market forces. We will do a collectivization, but we will see who pays 
and who gets subsidized.
  We are having an argument about the money, on who gets to pay, not 
what to pay.
  There is technology, and we have done this over and over on the 
floor, that is about to crash the price of healthcare. If this body is 
prepared to have that Blockbuster moment--and when I say, ``Blockbuster 
moment,'' I mean Blockbuster video moment, where technology changes 
things. We no longer go down to the neighborhood shopping center and 
get a little silver disk to shove into our player at home. Instead, we 
go home and hit a button.
  It turns out, in healthcare, you have two sides. You have technology, 
everything from something you can blow into that tells you if you have 
the flu, to the thing you wear on your body that helps diagnose you, to 
the autonomous healthcare clinics that are going up around Phoenix, to 
the other side, the single-shot cure for hemophilia, things that 
actually cure disease.
  If we can get our heads straight and say we need to crash the price 
of healthcare--it will be hard. That type of economic technology 
disruption is going to scare a lot of our friends, whether those in 
certain medical practices or those who offer certain services. But we 
don't have a choice.
  I want to walk through some. First, some of the good news and the 
reality on the math because this place is substantially a math-free 
zone.
  Last week, I had floor time scheduled, but the floor ran long 
because, well, the chaos on the floor. I ran into one of my friends, a 
Democrat from the Midwest, and we were talking about the speech I was 
about to give.
  His immediate reaction was: Well, David, you had that tax reform a 
couple of years ago, and that is the real reason.
  You look and say, no. If you think about what has happened in labor, 
in tax revenues, in the dramatically fewer people who actually need 
social services, it has been incredibly positive for the economy.

                              {time}  2045

  So I put this board up for him. Take a look. If you actually take a 
look at these years, the middle bar chart, that is 2018. The blue is 
2017. The gray is 2019 fiscal year.
  This is the first 9 months of what we call receipts. For those of us 
on the Ways and Means Committee, this is substantially our 
responsibility is these receipts. Highest revenue first 9 months in 
U.S. history. Adjusted for constant dollars, the second highest in U.S. 
history. The doom and gloom and the crazy things that were said about 
tax reform aren't true, and the math says so.
  We don't have a choice. If we do not substantially grow this economy, 
dramatically grow this economy over the next couple decades--not the 
next couple years, but next couple decades--you can't mathematically 
cover the promises we have made on Social Security and Medicare.
  And I don't know why it is so terrifying for elected Members to 
actually be honest about the math. The chart is there. If you don't 
believe me, go onto the Treasury's website, look at the receipts that 
have come in--highest in history; adjusted for inflation, constant 
dollar, second highest in history.
  It is working. It is working.
  There are other things that are also really optimistic. We are 
getting one of those--do you remember our five points? Getting the 
economy to grow long term with stability, you all saw the June labor 
force report, jobs report--incredibly good numbers, far beyond our 
expectation.
  But what was also really optimistic for those of us who are trying to 
build these models is the number of the population who were coming back 
into the labor force.
  And I know this is geeking out, but when you actually see more job 
postings than you have available workers, amazing. If I told you that a 
couple years ago, you would have laughed at me, but it has happened.
  But the other thing we also start to look for is, even if you see 
little ticks up in the unemployment, the number going up, if it is not 
because of the falling available jobs but because those reentering are 
choosing to enter the labor force, that is really powerful because that 
labor force participation number has a sense of the productivity of our 
society.
  We have already seen some pretty impressive productivity step-ups. We 
have actually seen a constant wage gain, particularly for our brothers 
and sisters who were at, the technical term, the lower quartiles, which 
I always thought would bring joy across the body.
  But it almost now seems this body is incapable of embracing good, 
optimistic, joyous numbers of how many of our brothers and sisters out 
there who had a pretty crappy previous decade are actually doing well 
now. There should be optimism about this. There should be joy about 
this, but would that be giving one party kudos against the other?
  How about for a moment you just drop the party labels and understand 
the math? There are pretty impressive numbers coming out of this 
economy right now. What do we do as policymakers to keep it going as 
long as possible?
  So let's go back to that other leg. How many of our brothers and 
sisters are actually in the labor force? I can show you some papers 
from just a few years ago that, as the baby boomers are starting to 
move into retirement, labor force participation numbers were supposed 
to collapse, and you actually see a little bit of that. If you look at 
the 10-year labor force participation and then overlay our demographics 
as we are getting older as a society, you see those numbers fall.
  But take a look at this chart, and this is just the last couple 
years. We are back up kissing up against a 63 percent labor force 
participation. I know this is geeky, but I can show you papers from a 
few years ago. It said we were never getting back close to this number 
again, at least not for decades and decades and decades. Well, we are 
there.
  This is really important to the economic vitality of the society. And 
it is not just tax revenues. When you have a population that is 
working, you have more of your Americans who are receiving employer-
based healthcare. They are not receiving certain social welfare 
benefits. They may not be prospering as you might turn on television 
and look at the dreams of people who win lotteries, but there are 
things working.
  You can drive through some of the neighborhoods in parts of my 
district and you just look around at the number of people who are 
remodeling their homes or putting a new roof on. There are good things 
happening out there in society, and you see it in the data.
  So why do I come to the microphone almost every week with this sort 
of chagrined look, terrified we are not having the difficult 
conversation of what do we do to deal with the reality of the promises 
we as a society have made to our seniors, that retirement security, to 
keep those promises?
  Well, let's actually walk through some of the really difficult math, 
because this is what drives that $100 trillion, and that is inflation-
adjusted dollars, $100 trillion shortfall that comes from Social 
Security and Medicare in the next 30 years. This board right here is 
the number one driver.
  If you need to understand something, just understand this board. This 
is basically someone who moves into retirement today, they will have 
paid about $161,000 in Medicare taxes. That is a lot of money. But that 
senior who has paid in $161,000 in Medicare taxes, they will be taking 
out, and this is the average, $498,000.
  So take that differential, multiply it times 74 million baby boomers, 
and that is the math. That is substantially the driver of a completely

[[Page H5993]]

unsustainable math that blows up everything in our lives. Yet we are 
terrified to talk about this. We all know it. We all walk around with 
these reports here, though I wonder how many people ever open them up 
and read them. But that is the math.
  We can manage this, but we have to do it with a level of creativity 
and understanding that it is not one solution; it is dozens of policies 
coming together to make it work. So let's see what that shortfall 
actually does.

  This board now is maybe a year out of date, so I need some updating 
on it, but it functionally shows the shortfall in Social Security. 
Total Social Security shortfall over the 30 years is about $31 
trillion.
  What you see in the blue is interest. What you see in the purple is 
just what we call the cash balance shortfall. But the real difficulty, 
the honest difficulty is Medicare.
  Medicare produces about a $72 trillion cash shortfall over the next 
30 years, where, if you look at the last bar, it is actually green. It 
is in the positive. The rest of the budget is positive.
  This isn't Republican or Democrat math. It is just demographics. It 
is what we are as a society. But yet we will weaponize this.
  So if the Democrats do certain things, we are going to attack them on 
it. If we do certain things, they are going to attack us. Yet this is 
the fragility of our society, and it is almost impossible around here 
to talk about because there is folklore around here.
  I can't tell you how many public events I have done over the years 
where you will get someone to come up to you and say, ``Hey, if you 
just take care of waste and fraud,'' ``if you just take care of this,'' 
``if you take care of that''; anyone who says that today, particularly 
if they are an elected Member of Congress and they come behind a 
microphone and say, ``If I take care of waste and fraud, that deals 
with the debt and deficits that are coming,'' they are not telling you 
the truth. That is not what the calculator says. It is a rounding 
error. But that is not part of our political folklore in this culture.
  So back to analyzing these numbers.
  Projected 2049 deficit, solely Social Security and Medicare. If you 
actually see the dedicated revenues, this one is purely on GDP, the 
percentage of the GDP in 30 years that is going to have to be dedicated 
just to covering Social Security and Medicare. We will be taking in 
about 5.8 percent of taxes equal to GDP, that is dedicated to Social 
Security and Medicare, but we are going to be spending 17.9.
  Remember, if we are going to tell the truth, for many of us, it is 
now a battle to keep the ratio of our Nation's debt to the size of our 
economy from blowing through that 100 percent. Can we find a way to 
stabilize it in that 90, 95 percent area?
  It is my goal, it is my dream to come behind this microphone and say 
we have balanced the budget, we are paying off the debt. But 
demographically, that math is almost impossible.
  So our job is to balance it, so, as we are getting older as a 
society, we don't blow through that debt-to-GDP ratio which all the 
sudden blows up our interest costs, which consumes every next 
incremental dollar.
  And you start to see, when you look at charts like this, it helps you 
understand the growth and the amount of our entire society's economic 
productivity that is just going to go to cover these promises. They are 
earned benefits, but it is going to consume a huge portion of our 
entire economy's vitality just to cover those benefits.
  So my friends on the left will often come and say, well, raise tax 
rates. Except you have a classic problem. We actually have decades and 
decades and decades and decades of data.
  So you see the black line here? It is when we have had very high 
marginal tax rates. It is when we have had low marginal tax rates. It 
is when we have taxed capital gains aggressively, when we haven't taxed 
capital gains aggressively. The reality of it is, or somehow it may be 
a law of nature or maybe a law of economics or a law of taxation, taxes 
always fall back into a certain range of the amount of GDP, the size of 
the economy. And this has been under liberal Congresses, conservative 
Congresses, liberal Presidents, conservative Presidents.
  If you look at that black line, it has always fallen back into, sort 
of, a certain range of a percentage of the size of our economy comes in 
as Federal taxes: payroll taxes, the FICA we are talking about, and 
income taxes over here. It is just history. And there has been all 
types of tax schemes attempted.
  So from a public policy standpoint, adopt those policies that grow, 
that grow the size of the economy, because if you are always going to 
come back and get a certain percentage of the size of the economy, how 
do you get more revenue? You grow the size of the economy.
  Mr. Speaker, may I request the amount of time remaining.
  The SPEAKER pro tempore. The gentleman from Arizona has 7 minutes 
remaining.
  Mr. SCHWEIKERT. I have come up this year, this may be the two dozenth 
time, walking through both the math, the reality. Some of the times I 
am behind the mike I am much more optimistic because there is a 
technology disruption, there is economic growth, there are things 
happening around us that give us a fighting chance.
  But some nights I will sit down and I sit here and highlight the 
different reports, and I am terrified for my little girl and what her 
future will be like because, right now, the math says her marginal tax 
rates have to be more than double what I pay today just to maintain, 
just to keep the wheels on. The economic growth crashes in our society. 
The opportunity is taken away.
  And then we have crazy around here where we are getting proposals 
from the majority that offer another $40 trillion-plus of spending in 
the next 30 years.
  Help us find our calculators. Help us find some compassion, some soul 
that we can make this society work. But you can't do it by living in a 
fantasy world. The math is the math, and pretending it isn't dooms our 
future.

                              {time}  2100

  I truly believe we are at a moment of inflection where if we do the 
right things, we actually could have a couple of great decades ahead of 
us, my three-and-a-half-year-old can have an amazing future, every 
other child can have an amazing future, every retiree will know they 
are secure.
  But if we don't take care of these things, how do we deal with the 
other wave that is coming at us: the multiemployer pension crisis, the 
municipal pension crisis, the State pension crisis, the amount of our 
brothers and sisters heading towards retirement that actually have 
almost no capital set aside for their retirement other than that Social 
Security and those medical benefits that are Medicare?
  If you love and care about people, learn the math, tell the truth 
about it, and work with those of us who are passionate on working to a 
solution, instead of chasing the shiny object of the daily chaos that 
is the House of Representatives right now, on what gets you the most 
clicks on your social media, what might get you a television hit 
tonight.
  This is not particularly sexy, this is not exciting, this is not what 
a lot of our constituents want to hear, because it is painful.
  It is also the single most important thing any elected Member of this 
Congress can do, is fixing the greatest threat to our society, and that 
is $100 trillion of promises over the next 30 years to our seniors that 
there is no mathematical way to cover.
  Let's go do the right thing.
  Mr. Speaker, I yield back the balance of my time.

                          ____________________