[Congressional Record Volume 165, Number 171 (Tuesday, October 29, 2019)]
[House]
[Pages H8590-H8593]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BUILD ROBUST ECONOMY TO KEEP PROMISES
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. Madam Speaker, this is one of those moments where, in
listening to my friend, Mr. Green, we are friends. We, I think, always
voted against each other on most everything, but we were always civil
to each other. That is sometimes hard to communicate with a lot of our
brothers and sisters, our folks at home, that you can sometimes have
very contentious issues that we absolutely disagree on, but it doesn't
mean that we have to be jerks to each other.
We have a family motto--I don't know if it works for someone on the
left--``conservative but not a jerk about it.'' And we try very hard.
Let's see if we can actually do something that actually is
interesting and real on the math. Because our other saying is: It is
about the math, and the math always, ultimately, wins.
The reason we often start these presentations with this board up is
if you look at our future, instead of the chaos that this place seems
to be bathing in so far this year, and care about what is happening to
the country, care about people like my little 4-year-old daughter, who
turned 4 last week, best little girl ever--what is her future going to
be like?
When you look at the CBO data, there are some really important data
points that are not Republican, not Democratic. They are math.
In the next 5 years, just the growth of Social Security, Medicare,
and healthcare entitlements, just the growth, every 5 years, equals the
Defense Department spending. That means, every 10 years, two full
Defense Departments is just the spending growth.
We expect, over the next 10 years, 91 percent of the spending growth
for your Federal Government will be Social Security, Medicare, and
healthcare entitlements.
Over the next 30 years, if you remove Social Security and Medicare,
we have $23 trillion in the bank. If you roll Social Security and
Medicare back in, we are $83 trillion in debt. That is not inflation-
adjusted. If you inflation adjust it, it is somewhere in the 50s.
[[Page H8591]]
The point I am making is: Could this body ever engage, in this
environment, on the real headwind that is up against our society and
against all of us? We have a moral obligation to keep our commitments
on those earned benefits, those earned entitlements, whatever you want
to call it. But how do you build a robust enough economy, a vibrant
enough economy, to keep our promises?
That is why we put up this slide. We have been working on this for
years. We try to make an argument that if you do certain economic
policies--tax policies, trade policies, immigration policies,
regulatory policies--the adoption of fairly aggressive changes in
technology to crash the price of healthcare--incentives for labor force
participation, incentives for someone who is older--if they are healthy
and choose to stay in the labor force, there are all sorts of things to
do here, even down to being honest about the demographics of the
country on how fast we are getting older, the fact our birthrates have,
in many ways, collapsed.
Now you have incentives for family formation and population
stability. It is complex. It seems to offend everyone when you start
saying: ``We have a complex problem.'' Guess what? There is not a
simple, trite solution. It is complex.
Let's talk a little bit about the good news, the proof that tax
policy, particularly, can have pretty substantial effects on the
society.
Last Friday, the Treasury posted up its numbers. You don't call them
revenues; you call them receipts. I was corrected on my first day on
the Ways and Means Committee.
Guess what happened post-tax reform? Do you remember the apocalypse
that was coming? Right here, at this microphone over here, we were told
of the apocalypse that was going to happen financially to the country
with the tax reform. The highest revenues in U.S. history, we had 4
percent growth in true revenues, true receipts. Inflation-adjusted, it
is the second highest in U.S. history.
We had a really interesting year in 2015. There was a number of
anomalies, but a very high spike in revenues. It is the second highest,
inflation-adjusted, in U.S. history, 4 percent growth in receipts.
The problem is that we had about a 7-plus percent growth in spending,
and you do that gap year after year after year. Now, to be honest, of
that growth in spending, I believe over half of it was on autopilot. It
was the population growth of our brothers and sisters who are baby
boomers, the 74 million of us who started to move into our benefit
years.
Back to my first comments, it is happening. It is just demographics.
The other part was spending decisions here where one side wanted to
fix underinvestment in the military. Well, for every dollar there, you
had to do certain types of social entitlement spending.
But what is interesting is if you look at the growth of the economy,
particularly in 2018, almost every social program, whether it be Social
Security disability, which has some other complications, and there were
some policy changes, to TANF, food stamps, they are all down, which
should be almost joyous.
{time} 1845
But, once again, the chart I am showing here, I don't know why there
is not more talking about this because just a couple years ago when we
did tax reform, we were told this couldn't happen. We had lots of
experts come and testify, lots of folks writing apocalyptic articles,
and lots of testimony and debate here on the floor.
So for those of us who took a beating over our math--which turned out
to be right--do we ever get an apology?
Or is it just another occasion where the lunacy is allowed to engage
in the rage machine and yet when we actually see the math, feelings are
more valuable than the truth?
It breaks my heart, because how do you do good things for society if
you are not allowed to have honest conversation about the math?
So, once again, let's go back to the basics.
Do you see the red?
The first pie chart is 1960, and you see about 34 percent of our
spending is what you would call being on autopilot. Today, actually
now, over 70 percent of our spending is functionally formulaic. So we
come to the floor, and we vote on appropriations bills. But we actually
don't vote on that red, because those are benefits you get, Madam
Speaker, when you turn a certain age, when you fall under a certain
income, things that are automated.
But yet look at what is happening. Take a look. If you remove
Defense, think about that, so if you remove the 15 percent that is
Defense, and you start to realize that mandatory spending, the 15
percent of the budget is Defense, there is only another 15 percent that
is all the rest of government: health research, the FBI, the CIA, the
agencies, the Forest Service, and everything else, are actually only
about 15 percent of our spending. Your government is functionally an
insurance company with an army. I know that sounds a little trite, but
it is sort of a little bit funny and actually quite true.
So how do you deal with the reality?
Well, the reality of it is back to that very first board. There is a
path. It will require Democrats and Republicans to actually understand
a calculator, understand the benefits of growth, and growth being
moral, but growth also doing stunningly good things for Americans, and
also that growth gives us a fighting chance not to break the 95 percent
debt-to-GDP ratio that we are heading towards very, very soon, so
understanding where this debt is coming from.
Now, why this is important is, all day long Members of Congress come
behind these microphones, and we talk about all the things we want to
do.
But what happens when you can't do the things because the current
promises are consuming everything?
So remember our earlier comment, if you remove Social Security,
remove Medicare, and look at the 30-year window, you will have about
$23 trillion in the bank. When you move Social Security and Medicare
back in, then you start to see where we are at, Madam Speaker.
The goal here is to keep our promises, produce enough economic
expansion, and engage in a number of technology and healthcare
disruptions to make the math work.
Is that Republican or Democrat? It is neither. It is actually what is
really good for our society. But it is the reality.
So let's actually touch on just a couple of these things. I am sorry,
this is the best slide I have on this subject area. It is a little
noisy, but a Democrat Member and I have been working on this, trying to
actually promote continued investment in things like diabetes. It turns
out that if you can follow this noisy chart, we are modeling that the
projected costs of Medicare, about 30 percent of it is diabetes.
What would happen if we could actually have either a technology
breakthrough on everything, helping our brothers and sisters with
obesity issues to being able to grow pancreatic cells and reactivate
somebody's pancreas so it is producing insulin?
Those investments are worthwhile because they have such a dramatic
multiplier effect. We are actually right now in our office trying to do
the research of Alzheimer's.
What would happen if we had a successful treatment for even some of
the categories of dementia or even the postponement of Alzheimer's and
what it actually means?
So these are occasions where trying to build a formula, saying, okay,
we already know tax policy is working in expanding the economy--and at
the end we are going to talk about all the good things happening
there--we already know that these trade deals, like USMCA, our model
right now says it is half a point of GDP growth. You would think this
body would just be giddy to get that passed, because growth is moral,
Madam Speaker. It also really helps us have the resources to keep our
promises.
How about many of the other things we work on, where if you are going
to build an immigration system, do you design an immigration system
that maximizes economic expansion for our society?
That is why there are so many economic modelers who are talking about
moving, like the rest of the world is, toward talent-based immigration
systems. The beauty of it is, obviously, you don't care about
somebody's religion or color or whom they cuddle with or all these
other things, you care
[[Page H8592]]
about the talents they bring to our society to help us grow, because we
have trillions and trillions and trillions of dollars of promises. We
need the economic expansion to keep our promises.
Do you see, Madam Speaker, it is a broken record that needs to play
over and over, because we live in a world of distractions and almost
rage around here right now, and yet these are the types of issues that
are critical. These are the types of issues we should all run on. So
that is an example there.
So let's actually talk about a little bit of creativity. Last week we
had something called H.R. 3 in the Ways and Means Committee. It is
referred to by some people in the vernacular as reference pricing. Take
a handful of European countries, find their statistical mean, give it a
variance of from 100 to 130, and you have to price within there. If you
price outside that range, then you get a 95 percent tax, if you are the
pharmaceutical manufacturer or seller.
Okay, Madam Speaker, except within just a couple moments, a number of
smart people in the room were laying out saying, okay, you could scam
it this way, you could actually do a rebate over here, you could
actually backdoor--so raise the price on these pharmaceuticals, lower
the price on these, so the country of France, when they are buying,
their mean cost is the same. And there was no willingness in the room
by the majority Democrats to have a conversation of, this doesn't
actually accomplish what you want, and CBO has already come and modeled
to us that there will be a substantial falloff in new drugs that are
the disruption that we are trying to get.
Madam Speaker, do you remember how in the previous slide we were just
talking about the miracle, if you had a cure for diabetes? What would
happen if you had Alzheimer's?
What about some of the ones we know are here already? There is the
single-shot cure that cures hemophilia, one of the most expensive for
an individual medical condition in our society. It can be up to around
$600,000 a year, a single-shot cure is here.
We should actually have been having a discussion of how you finance
it, so every one of the 8,600--that is the best number I have right
now--of our brothers and sisters who have hemophilia A, we can cure
them, not over years, but over months.
It turns out for our brothers and sisters who are in the chronic
population--5 percent of the population is the majority of our
healthcare spending.
So what about the concept of a disruption like we were talking, a
healthcare disruption, where you start curing individuals who have
these chronic conditions and they are no longer part of the chronic
population that is the majority of our healthcare spending?
Instead of having the absurd debate we have had in this body for 10
years, the Democrats' version, the ACA, on who should get subsidized
and who should have to pay. And then, of course, the Republican
alternative, which was not on who gets subsidized and who should have
to pay, but who should pay and who should get subsidized.
We have been debating the financing of healthcare, not the disruption
of things we can do technology-wise and incentive-wise to crash the
price. You have already seen the charts. Medicare is three-quarters of
the unfunded liabilities. I just showed you that almost 30 percent of
it is just diabetes coverage.
How do you get this body to focus on the reality of the math and move
toward solutions that actually solve these problems?
So if you are going to try to be creative around here, what you find
out is by the time you make your first sentence of: Here is an idea,
you already have folks on the other side shutting it down saying: I am
not comfortable with that.
So I am just going to put up another board, just as a simple thought
experiment. So work with me here.
Fifty percent of the pharmaceuticals that will be picked up at
pharmacies today, the experts tell us, will not be used or will not be
used properly.
One more time. Half the pharmaceuticals that will be picked up today
will not be used or will not be used properly. Think of that. If we
could actually have some impact on that, if you want to do something on
drug prices, Madam Speaker, that is one.
Do we argue about that?
We don't argue on that fact. It just doesn't fit into the narrative.
So we have the technology today where we know when the pill bottle is
opened. We actually have the machines that if your mom or your grandmom
needs this pill at 8 a.m. and this pill at 12 noon, there is a little
machine that does, not only dispense it, but will talk to her and
actually also do a cellphone notification, and if the little cup
holding the pill isn't moved, it will actually even send you a text
message as a family member.
Think about that. That is a technology over here that has almost
nothing to do with actually being part of pharma, but actually would
help us on that portion of that 50 percent that is not being used
properly.
How about the other portion of that 50 percent that just isn't used
at all?
We have actually been trying to do the math, saying: How about for
high-value pharmaceuticals, put them in sterile packaging. Put them in
single-use packaging and let them be returnable for the high-value
ones. Because on one hand, we will get testimony of folks who are
outraged that these small molecule pharmaceuticals are ending up in the
water supply and in other places being flushed down the toilets. Just
this weekend we had prescription drug take-back day in so many of our
communities.
But the fact of the matter is, how many pharmaceuticals that are
perfectly good, that if they had been packaged properly, could have
been returned?
So as a body we support recycling for everything else, but I had a
Democrat Member come up to me and say: Oh, I am just not comfortable
with that.
How about if it had a genuine, substantial price index?
How about if it became a way to help our brothers and sisters who
don't have access to some of these pharmaceuticals, a price-efficient
way to get them?
How about if it was just good for the environment?
It turns out the technology exists. There are a number of
organizations out there that are already experimenting with cartridges
that stay absolutely sterile, so that those that are unused are
returnable. It is a type of multilayer blister pack that stays
absolutely sterile that makes them returnable; liquid type of
pharmaceuticals that are in single-shot doses, meaning, the other ones
are returnable. It is a thought experiment.
But because it didn't fit the narrative of let's beat the crap out of
the pharmaceutical companies--and, look, I am not saying they are
saints--but it didn't fit the narrative to have something that was
creative. It was like talking to a blank wall. That is a problem around
here. I am willing to listen.
{time} 1900
Can I get my brothers and sisters who claim we want to do good things
for society? ``We want to lower pharmaceutical prices. We are going to
put every creative idea on the table, except for the ones that aren't
theirs.'' It doesn't work that way.
So last bit, in the previous couple of weeks, we have come to the
floor here--and we chose not to bring all the boards--but it is
something that I personally struggle with. If I had come to this body a
couple of years ago and said--and I hate this term, but it is the
proper term--our brothers and sisters in the quartiles where they
didn't finish high school, or a single individual without a college
education, we would have meetings in the Joint Economic Committee where
they were doing modeling, and we were functionally writing them off in
society, saying these populations are going to be part of--I don't have
a better term--the permanent underclass.
What has happened the last 2 years? It turns out those lowest
quartiles, those three or four lowest quartiles, are the fastest-rising
incomes in our society--single women, no partner at home, 2018, a 7.6
percent growth in income.
If I had stood behind this microphone a couple of years ago and said
this is what is going to be happening in our society, I would have
gotten crazy calls saying I had lost my mind. But it happened.
[[Page H8593]]
For those who live in Arizona, I believe, in the last five quarters,
we have had a couple of quarters where we have had the fastest-growing
income in the entire country, and it is not the folks at the top.
What happens when you have a country that has more jobs than
available workers? For those who follow numbers, if I had come to this
room a couple of years ago and said we are going to blast beyond 63
percent labor force participation when all the models said we would be
a couple of points below that and continue to fall--there are amazing
things happening out there.
You would think there would be a little joy for a body that claims we
care about working men and women, for a body that claims we care about
those who have had a really rough previous decade. You would think
there would be joy in this body.
Look at the math. Look at the fascinating things when--okay, we will
get the unemployment numbers--what?--this coming Friday. Look at
something that is called the U-6 data, and then start to see these
fascinating numbers out there, when you get some of the really broad
data on how many of our friends and neighbors who have developmental
issues, handicaps that have been barriers for them to participate in
the workforce. They are moving into the workforce because businesses
are so desperate for workers that they are making accommodations. You
would think that creates a little bit of joy.
Is that Republican or Democratic? It is American. We should be
joyful.
When we see the numbers of Hispanics, African Americans, women, these
other populations, all of these subgroups that we love to break up our
math into, all of them are record highs, tied for record highs. Why
isn't there joy?
When you look at what has happened to wages, why isn't there joy?
The reality is that the economic expansion that is helping so many of
the working men and women in this country also means your government
has had the highest receipts--income--in U.S. history, blowing the
wheels off of all the predictions, proving the sort of Malthusian,
malcontents were wrong. Something is working out there.
Why isn't this body fixated on figuring out what is working and doing
more of it? Instead, Congress has now become a place where we do public
policy by feelings instead of a calculator.
As my father used to say--and I am terrified I am quoting my father--
my father used to say, ``The math always wins.'' Madam Speaker, the
math always wins.
Madam Speaker, I yield back the balance of my time.
____________________