[Congressional Record Volume 167, Number 83 (Thursday, May 13, 2021)]
[House]
[Pages H2309-H2311]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               ECONOMICS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 2021, the Chair recognizes the gentleman from Arizona (Mr. 
Schweikert) for 30 minutes.
  Mr. SCHWEIKERT. Mr. Speaker, tonight, I am going to actually try to 
do something that is a little tricky, but I am going to first sort of 
explain the theme, and then I am going to sort of walk through some of 
the backup material.
  We understand right now, our brothers and sisters on the left have, 
what, another $4\1/2\ trillion of spending--maybe it is 5--in the 
pipeline, a couple major multi-spending of that, let's call it that 
$4\1/2\ trillion over the next 10 years. They claim to have about $3 
trillion in tax increases coming to pay for it. The reality--and 
hopefully I will be able to do this over the next couple of weeks as we 
try to get more details and work through it line by line--it also 
requires that you hit every mark on the revenue raised, that all sorts 
of programs expire, which is really unlikely around here, and also 
certain spending expires.
  It is just not real. So our top-of-the-napkin math right now is at 
best over the 10 years it is a couple trillion dollars in new revenues.
  Well, one of the sets of revenues that is being discussed is, well, 
let's tax the wealthy. Okay. Except when you walk through the math 
there, let's raise capital gains tax, let's raise basis, let's raise 
individuals' income tax, and also then you add in let's raise taxes on 
corporations, fine, but we are already starting to see the data coming 
in saying that just going to the 28 percent on the corporate tax rate 
is 1 million jobs over the next 24 months.
  Okay, so the Democratic Party wipes out 1 million jobs and takes, oh, 
I think it was a little less, like $119 billion or something off just 
the GDP from those 2 years, and you start to lay out--that is just the 
corporate income tax. Now start to do the capital gains which the 
beauty of capital gains is it is risk-taking. It is the type of 
investment that makes the working poor less poor. It is the type of 
investment that takes risks that makes us more productive, because, Mr. 
Speaker, you all remember your high school economics class.
  What are the two ways a worker gets paid more?
  Inflation, which means you got paid for more but it didn't get you 
anything, or productivity. Without that risk capital, Mr. Speaker, you 
lose that productivity investment.
  So, if the Democrats really intend to spend that much money and 
really intend to keep driving up the debt and deficits the way they 
are, then I want to make a modest proposal of where they can find some 
offsets. I am shocked this isn't discussed more around here. Instead of 
marching in and saying that we are going to tax rich people, even 
though much of that money actually goes to create jobs, investment, 
economic growth, and productivity growth for our brothers and sisters 
who are in the hardworking class, why don't we stop subsidizing the 
rich?
  I am going to show a number of boards here today on how this 
government takes some of the very, very, very wealthiest in this 
country and on one hand says: Pay the taxes and, oh, by the way, we are 
going to hand you back the cash.
  Mr. Speaker, I am going to show you one board where individuals with 
multi, multi, multi-million dollar houses on the beach then get 
dramatically subsidized flood insurance from the Federal general fund 
and over and over and over.
  If this is the path the Democrats intend to go, could they consider 
cutting spending?
  Because cutting that spending would be much less distortionary--that 
is an actual word---distorting the economy because the taxes being 
discussed right now are going to hurt the economy. They are going to 
hurt working people, and they are going to really hurt the working 
poor.
  So, if you need this much revenue--and our back-of-the-napkin math 
right now is about $1,400,000,000,000 over the 10 years in subsidies 
that could be cut for that very top fraction of income earners and 
wealth holders in the United States. So there is a place to get your 
revenue without creating the economic distortion being discussed right 
now.
  So let's first talk about the reality of where we are at as a people, 
as a society, and as a country.
  How many actually right now know the latest numbers from CBO on how 
much trouble we are in just on Medicare?
  The 30-year window right now on Medicare is a $71 trillion shortfall 
just in Medicare.

                              {time}  1915

  Remember, in Medicare only, it has the A, B, C, D. But part A, which 
is the hospital portion, is the only part we collect as part of your 
FICA tax. Everything else, ultimately, comes out of the general fund.
  We always talk about part B and part D because part C is the managed 
care portion. But if you look at the actual outlays of the program and 
then look at the interest costs and remove part A, the hospital 
portion, it is $71 trillion, and it is just Medicare.
  I am just stunned more Members of Congress don't understand this or 
are willing to tell their constituents the truth. That Medicare number 
represents 67 percent of the deficit debt shortfall over that 30 years. 
Once again, the Medicare shortfall is 67 percent of the debt we are 
going to be in, in 30 years.
  So, we take that. Now, let's add in Social Security. Social Security 
is in better shape. It functionally has only about a $28 trillion 
shortfall over the next 30 years because you reach in and you take the 
portion of the trust fund.
  Here is the trust fund portion. You see the green sliver?
  Then, the rest are what we predict as incoming payroll taxes. Here 
are the programs' outlays, and then the interest on the shortfall.
  Work with me. If Medicare is $71 trillion, Social Security is $28 
trillion, right there, you are at--what?--$99 trillion of the debt is 
driven by just Social Security and Medicare.
  Well, the good news is--if it is that--the rest of the budget over 
that 30-year window is only about $3 trillion short. So, in a perverse 
way, the rest of the budget is out of balance by only $3 trillion. It 
is pretty close to being in balance, in the type of numbers we are 
using here in Washington today.
  There should be just a fixation, if this body cared about retirement 
security, cared about the future, cared about everyone from my 5-year-
old daughter, who is going to be paying these taxes, to, hopefully, 
myself, who will be receiving some of these benefits. If we actually 
cared, there should be an absolute fixation on these numbers.
  Instead, there is a fixation here on spending more money and spending 
money that we can show you is going to shrink the economy and unemploy 
a lot more Americans.
  I am trying to speak as an economist with some passion. If you look 
at post-tax reform, post-some of the regulatory rationalizations, and 
maybe with some good luck, if you look at 2018-2019, that should be the 
goal, to get back to what was happening in the economy in those years. 
Because if you take a look, after the tax reform, workers were 
receiving a substantially larger portion of the value of that tax 
reform. It was substantially a miracle.

[[Page H2310]]

  But I want to show you one of my favorite slides here. If you look at 
the number of Americans in 2018, 2019, who were in poverty, do you 
realize we had a couple of the lowest years--actually, the lowest years 
in history of our brothers and sisters, our fellow Americans, in 
poverty. You look at the lines for African Americans, Hispanics, 
Anglos, this is supposed to be the goal.
  You do understand we had a couple of years where income inequality 
dramatically shrank, and it didn't shrink because rich people were 
getting less rich. It shrank because poor people, particularly the 
working poor, were getting less poor, and fairly dramatically less 
poor.
  Here is maybe a perverse reason the left is fixated on wanting, on 
one hand, to raise the taxes on the wealthy and, on the other hand, 
hand them a bunch of subsidies. Well, there is also a very ugly 
political reason. When you hand people subsidies, maybe they help your 
campaign, maybe they pay attention to you.
  But if you take a look at 2013 to 2016, see the orange bar here? That 
was the gain of wealth of the wealthy. The blue was the poorest portion 
of Americans.
  The income inequality gap under those Obama years actually grew 
dramatically. The rich did get richer. The poor did get poorer.
  When Republicans provided tax reform, when we cleaned up much of the 
regulatory system, you know what happened? The value of working 
people's labor went up fairly dramatically. Our brothers and sisters 
who we refer to often as blue collar, the working poor, they got 
substantially wealthier. Their income--their labor became much more 
valuable.
  The rich didn't even keep close. It was like three times the 
differential.
  When someone tells you during the last administration, well, the rich 
were getting richer and the poorer were getting poorer, they are lying 
to you. They are just not looking at the math.
  It turns out tax reform--regulatory reform, actually--made the poor 
much less poor. It didn't shrink the pie. It actually made prosperity 
across the country.
  Then, we hit this damn virus.
  So, we look at the brilliance of what we have done in this last year, 
and you start to realize the economic violence we are committing on the 
poor.
  Actually, before we do this board, what are some of the things you 
can do to really crush the working poor in your country? Open up the 
borders, and make those who may not have finished high school--what 
they sell is their talents and their labor. They may not have high 
skill sets, and for so long, that skill set didn't have enough value in 
this economy. Then, in 2018 and 2019, we saw the working poor get 
dramatically less poor because their labor became much more valuable.
  When you open up the border, you flood the marketplace with those who 
compete with them with similar skill sets.
  We have lots of data. A couple of weeks ago, I showed some charts 
that showed one of the most vicious things, the economic violence you 
can commit on the working poor with having an open border.
  What is the number two thing? It is what we have been hearing about 
the last couple of days. When you see this type of inflation on 
gasoline, on commodity foods, on being able to put a roof over your 
head, the middle class, it hurts. The upper classes, they make money 
because they hold lots of assets. They are getting richer now.

  But if are you part of that working poor, that blue-collar working 
class that did so well in the previous couple of years, they are 
getting their heads kicked in right now because we have pumped in so 
many dollars chasing so few goods. We are kicking the poor in their 
heads, and it is the policies coming out of this place that are doing 
it to them.
  Yet, the third leg of how you make the poor less poor is work, that 
attachment to the value of their labor that businesses, concerns, 
others that need them, that help them raise their skill sets, that help 
them build their seniority.
  Yet, we have a system right now where, as you can see in this chart, 
in much of the country, we are paying people more money to stay home 
than take the employment.
  You do realize right now you may be a hero if you are a Member of 
Congress and you have been voting to do enhanced unemployment benefits. 
But in the future, when those things start to run out, and they have 
lost a year to 2 years of skills, of seniority, of moving up in the 
organization they are employed by, you explain to them why their 
lifetime wages have been crushed.
  Some of this is also driven by the teachers' unions playing games of 
not opening up.
  Do we understand the level of economic dislocation that these 
policies are going to give us, not this year, not next year, but maybe 
for the coming decade?
  Let's go back to my previous theme. We see that economic robustness, 
vitality, opportunity, economic growth is moral. If this place truly 
cares and claims they care about workers and the working poor--now, we 
are about to do the next round of economic kick-in-the-head. We are 
going to call it taxing the wealthy, but we are also going to remove 
the very capital out of the markets that go to the investments that 
make us more productive, that make it so we can hire and pay people.
  You already saw the one study--I have it right over here on the 
chair--that says that just the corporate tax hike will unemploy 1 
million Americans in the first 24 months.
  Let's walk through and see how bold and economically literate the 
left is around here. Here is the National Flood Insurance Program. It 
turns out that if you look at the chart over here, where much of the 
subsidized spending is coming from the general fund, it is for the 
folks who are 165 percent of the mean income and up.
  We were trying to work out another chart that showed it was some of 
the top 1, 2, 3 percent of income earners and wealth holders in the 
entire country who were actually getting the substantial portion of the 
subsidized flood insurance.
  If you need more money to keep spending, maybe cut some of the 
spending where you are subsidizing the very people you are threatening 
to tax. It is a really creative, simple idea: Cut some spending. And 
you can cut the spending on the very people who you vilify so much.
  Look, a couple of these are uncomfortable, but it is still the math. 
If you look at some of the top wealth households in the Nation, and you 
take a look at how much money will go to those individuals in 
everything from Social Security, Medicare, other types of programs--you 
really need to understand. Does it make sense to play this shell game 
of saying Democrats are going to raise taxes on the rich? Okay, but we 
are going to turn around and hand you all these benefits and hand you 
all these subsidies through the other hand. It is an irrational sort of 
washing machine of the money.
  Another one I will give you is, you take a number of the subsidies 
that go to agriculture, and take the sliver who are the wealthiest 
holders of those agribusinesses. Guess where the substantial portion of 
the subsidies go?
  So, on one hand, you are saying we are going to tax you more, but we 
are going to turn around and hand you back the commodity subsidies. It 
is an irrational plan, once again, devoid of basic math and basic 
economics that the Democrats are proposing.
  Who knows, maybe it is great politics, saying we are going to tax the 
rich. I mean, we see the polling. Many in the Republican base aren't 
particularly thrilled. We know the Democrat base vilifies it, even 
though that is where much of the left actually gets their money. But it 
is just bad economics.
  Do we want to step back into the days when, for great politics, we 
did things that truly crushed the workers, the working poor, in this 
country by making the economy smaller than it should be, slowing down 
economic growth but slowing down also those investments that make us 
more productive, that make it so we can pay our brothers and sisters 
more?
  My challenge to the left is: We have been working up the numbers now 
for a couple of weeks. Brian Riedel, of the Manhattan Institute, has a 
great article that is about to be published walking through lots of 
these numbers. Take it for your consideration.
  Brian's number is about $1 trillion of subsidies that go to the rich. 
Our number is about $1.4 trillion over the 10 years that go to the 
rich. We have

[[Page H2311]]

added in flood insurance and a couple of other programs that we have 
thought about.
  But the last part of this thought experiment, you are telling me it 
is absolutely ethical that saying, on one hand, I want to tax these 
folks more. But, oh, by the way, here is your subsidy to buy your 
electric car. Here is your subsidy to buy the solar panels. Here is 
your subsidy to have a multimillion-dollar house in a flood zone. Here 
is your subsidy.
  This is irrational economics. It is irrational policy. And the only 
reason a political party would continue to support it is they 
understand it is the shiny objects that get used for additional 
political support. That is a cynical, dark thing for our friends on the 
left to continue to do.
  So that is my thought experiment for this evening. We are going to 
try to add some more detail on these numbers over the coming weeks.
  Mr. Speaker, I yield back the balance of my time.

                          ____________________