Congressional Record, Volume 167 Issue 87 (Wednesday, May 19, 2021)

[Congressional Record Volume 167, Number 87 (Wednesday, May 19, 2021)]
[House]
[Pages H2602-H2605]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

UNFUNDED LIABILITIES

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, before I start my presentation--and I am
going to focus sort of on some of the economics, the debt and economic
growth, particularly in some of the proposals that are hitting the
House right now--I wanted to touch on something.
We just heard a number of folks get up and talk about their love and
caring for Israel, the Middle East, and the concerns of the conflict. I
want to do something that is a little bit different. I have intense
concern that our relationship with a fair and functioning republic in
the Middle East never become a partisan issue.
Maybe this will make sense. I have been here for a few years, and
there has always been the ability for those on the left and the right
to stand up and say: Look, we have a country that works. No country is
perfect, but it works, and it respects human rights, and it is a
functioning republic and a democracy in the Middle East.
I was really sort of heartbroken last week. Just before I did one of
these presentations, there was a presentation by not many Members, but
some who said some pretty awful things. So I hope as we all want the
country of Israel to prosper and do well--we want everyone in the
region to prosper and do well--but we have to accept there are other
bad actors particularly financing things coming through Iran to some
very bad actors to do horrible, horrible things in the region.
I wish we could sort of step back a few months and think of the joy
that many of us felt with the Abraham Accords that good things were
happening. The caring for Israel needs to be bipartisan, and my fear is
we are seeing that start to slip where some on the hard left are moving
away from supporting a fellow republic.
This is not a good thing for all of us, and we need to sort of
rethink that discussion, stand up for our friends, and tell our enemies
that they can have a home in our hearts if they stop the bad acts. And
maybe the Middle East, one day, really does have a future, as we saw
with the vision that came from the Abraham Accords.
Mr. Speaker, I get frustrated when I watch the floor. We all sit in
committee, and so often what comes through these microphones are sort
of trite talking points.
So let's go back to the big picture: What are we doing to actually
deal with it?
I have a new chart. I am trying to find over and over and over how do
we actually all come together and understand the reality?
This is our future. This is my 5-year-old daughter's future. It is
$101 trillion in debt adjusted in today's dollars. So this isn't 30
years of inflation. This is today's dollars. This is our future in 30
years.
Many of us want to get behind the microphone and say: This is
Democrat; this is Republican.
It is demographics. We are getting older as a society. We are getting
older as a people. And the reality of it is 67 percent of our 30-year
debt is the unfunded portion of Medicare.
Remember, Mr. Speaker, when you pay your FICA tax, you are paying the
part A, the hospital portion. The part B and D, someone, a retiree
contributes a little tiny sliver to. The rest comes out of the general
fund. When you actually take a look at our population, Mr. Speaker, the
cost of healthcare, those things, then you start to realize it is the
core driver of our debt.
The blue here is the unfunded liability with Social Security. So if
you believe Americans have the right to these

[[Page H2603]]

earned benefits--these are earned benefits--then why is it so hard to
have an honest conversation about the unfunded liability?
Because, Mr. Speaker, you will get behind these microphones and the
handful around here who would tell the truth about the math, then this
becomes an attack television commercial because you told the truth. I
am passionate that during my time here I am going to make these
programs survive and prosper, but you first have to understand the
scale of the problem.
Mr. Speaker, do you see the little green wedge over here?
At the end of 30 years, the $101 trillion of debt in today's dollars,
only $3 trillion of it is the rest to government. So when you get a
politician who will say: Oh, it is the military; it is waste and fraud;
it is foreign aid, then they are lying to you or they don't own a
calculator.
Once again, we have got to have this honest conversation: The
unfunded liabilities in Medicare and Social Security drive U.S.
sovereign debt.
So why talk about this today?
We have lots and lots and lots and lots and lots of spending that has
come up this year. I want to walk through what that does. I haven't
even been able to do the math on the charts if we continue just what we
have done this year, just in the few months what that actually means to
the future.
You would think we would be having this discussion: Hey, the economy
is getting better. Our society is opening up. Let's get Americans to
work, and let's get prosperity going. Because if we don't have actually
amazing and robust economic growth, then dealing with that $101
trillion of unfunded liability becomes almost mathematically
impossible.
So just to try to put some things in context, we held a hearing today
in the Ways and Means Committee on infrastructure. Now, most of the
discussion ended up becoming about infrastructure financing. But I
decided it was good to actually come up here and show what is actually
roads and bridges.
So, Mr. Speaker, do you see the orange right there?
Mr. Speaker, $115 billion out of the--what is it--$2-something
trillion is actually just roads and bridges. Much of the rest of the
spending, if you want to be brutal about it, is other things that come
shockingly close to paybacks for constituencies that help finance the
left. But a lot of them are things that ultimately don't belong in the
infrastructure: medical expansion and long-term care. It is something
that is real we need to deal with.

Does long-term care belong in an infrastructure bill?
Republicans and Democrats can nail this. We can get this here.
I will also give you another thing, Mr. Speaker. Many of us believe
infrastructure is actually much more than our traditional idea of roads
and bridges.
If you start to think it through, how much of it is technology?
If I came to you tomorrow, Mr. Speaker, and said: What is the street
down in your neighborhood going to look like a decade from now?
Fifteen years from now?
I am desperately hoping my 5-year-old never drives. I want her in an
autonomous vehicle.
If we actually have this technology coming, then what does traffic
look like?
What does a smart city look like?
I have done presentations here on the floor before of what does the
future of infrastructure look like in a world of interconnectivity,
where cars can be traveling at pretty impressive speeds talking to each
other, your carrying capacity on the existing roads today change.
How much discussion have we had that the future of infrastructure has
a huge technology base to it?
The information coming to your vehicle tells you when there is a fire
truck, when school is out, when there is a water main break to keep
moving and flowing traffic.
That is when my intense frustration is--much of the debate we have
today is: Let's pay back our political constituencies. Let's put this
much into roads and bridges. And, oh, let's completely be funding the
infrastructure of past decades instead of being visionary about what
the future looks like.

{time} 2030

I will give you a simple example of that just as a thought
experiment. I have a fixation on the future of healthcare as a type of
interconnectivity. Telemedicine becomes sort of a telehealth using
sensors and those things--cars talking to each other, transportation,
products, drones. Okay, you need broadband.
Broadband in the future for areas like my State of Arizona that don't
have it isn't running a copper line or a fiber-optic line out to the
middle of nowhere. It is a satellite. This last weekend, I think we
launched another 54, or whatever it is, low-Earth orbit satellites.
But we have $100 billion of spending for moving broadband
particularly out to rural America. Rural America, if we would
understand technology of today instead of sounding like we are a decade
behind, we have for my Tribal communities in the middle of nowhere
broadband. We just now need to get our laws, our financing, our
subsidies to this part of this century. That is part of the thought
experiment.
This is one I want to try to have a real, brutally honest
conversation about because the President has gotten up multiple times
and said his infrastructure package is paid for. Well, it is not. When
you spend some time on it, the new taxes, a substantial number of them
are fake. They are just fluff because when you look at the $265
trillion in spending that is the baseline in the bill, as best we can
score it, $1.95 trillion is the revenue. It is not real. A big portion
of it comes from, hey, we are going to get the entire world to do a
corporate minimum tax inversion so the companies leaving the United
States because we raised corporate taxes won't happen.
For the Biden tax plan, for Nancy Pelosi's, for the Democrats' tax
plan to actually work, there are components in here. You need the rest
of the world to adopt a minimum tax so we don't go back to pre-2016
when companies were abandoning the United States and taking much of
that tax revenue with them.
Another thing, there is a substantial area there where we believe
there are billions and billions--maybe a couple of hundred billion--and
we are going to collect more taxes. We are going to get those tax
cheats. Okay, let's say that is even real. How many years would it take
to hire, train, and be able to collect? Some of the estimates you are
talking about will take several years before that even becomes
effective.
There are a number of things like that on the revenue side that are
fanciful. Also, no one has started to score the raise of corporate
taxes that are in the Democrats' tax portion of the infrastructure
plan. We did a presentation last week that showed about a million
people will lose their jobs in the first 24 months. There will be a
million less jobs because of the corporate tax, and that is just the
corporate tax. That is not talking about the change of basis, the
capital gains, the tax on the wealthy, all of those other things.
We were trying to make an argument: If the hunger is for revenues for
some of these, stop subsidizing the really, really ultrarich. When they
buy their multimillion-dollar house on a beachfront, should we
subsidize flood insurance? If someone is really wealthy, should you
subsidize their electric vehicle, their solar panels, their power wall?
It turns out, we were coming up with close to $1.4 trillion in the
10-year window that looks to be subsidies for the very well-off. If you
do the ultra-well-off, it cuts that number down, but it is still a
stunning amount of money.
So, there is a path where you could cut spending instead of doing
things that would distort economic growth because, as many of you know
who may have watched some of these presentations, I have an absolute
fixation on the working poor. The miracle we had in this country in
2018 and 2019, where we were starting to crush the separation of income
and equality, it was working. We came up with something that I believe
Democrats supported, but they just didn't support how we got there.
We made working men and women's labor valuable. We made what talents
they brought to the marketplace valuable. We tried to once again say:
If you care and love the working poor, and

[[Page H2604]]

you want them to become much less poor, you can't devalue their labor.
But that is what we are doing right now.
The number one thing you can do to do economic violence to the
working poor is open up your borders. What happens when you import
substantial numbers of people with similar skill sets? We have great
data on this. You functionally have subjected that working-poor
population in your country to a decade of misery where their wages
don't flatline. They actually go down.
The other thing you do is inflation. Inflation concentrates
punishment on elderly who have saved and the working poor because now
the ability to buy that house, now the ability to buy an asset becomes
so much more difficult to get to.
I am not sure the left has processed what is going on at this moment
and how much economic violence is actually being done by the economic
decisions that have happened the last few months here. So, let's take a
quick look here.
Do you remember a couple of years ago, you know, way, way back, maybe
like 2019? We would engage in debates here on how we are spending too
much money on the military, too much for this, and 4.7 percent of GDP
that year was going to be in borrowing. People were really upset on the
left, and many of us were upset with too much spending on the right.
This year, we are over 20\1/2\ percent. If you want to understand
inflation, if you want to understand what is happening to asset prices,
if you are wanting to understand why that first-time homebuyer can't
buy the home, why that working-poor family can't seem to dig themselves
out, this is the beginning of what we are doing.
We are pumping so much spending, and the Federal Reserve is having to
finance it, to create functionally fake money, because here is what we
are doing. We sell bonds. Right now, the Federal Reserve is buying our
bonds like crazy--in many ways, just creating cash out of thin air.
There is this old saying: What is inflation? Inflation is too many
dollars chasing too few goods.

Instead of financing production and productivity in our society like
the tax reform did in 2017, where we saw incredible wage growth with no
inflation, what we did now is we helicopter-dropped money. Now, we have
lots of cash in our society, which has all been borrowed, chasing not
enough production because we didn't incentivize production. We
incentivized buying things. Great politics until you start to blow up
people's lives with the cost of their goods.
How dangerous is inflation? You hear a number of our friends from the
Federal Reserve--I talked to one a couple of nights ago, one of the
region presidents. She said: David, it is transitory. How many of you
have watched a lot of the leading economists, even the leading
economists on the left side, in the last 3 or 4 days? They are now
sounding the alarm. This inflation rate is not what they call
transitory. It is not just a blip for 90 days, and then it is going
away.
There are geeky things. I am the senior Republican on the House side
for the Joint Economic Committee, and there are things we will look at,
being able to buy a futures contract on a steel that you are doing a
multiyear project on, things like that. You almost can't buy those
right now.
There are so many industries that say their inflation curve is
already out beyond this year and into 2022. This is really dangerous,
where we are at.
Think of this. Last month, if you had annualized, we were at 4.2. But
the important thing is, look at the explosion. Functionally, as soon as
the administration started rolling out this functionally deficit
financing, even though the President says, hey, I am paying for it--but
you just saw, on giving credit for everything, there is still another
$600 billion of borrowing in just the infrastructure proposal, not all
the others.
This is a problem. There is a canary in a mine. Some folks should be
really starting to make a point on this.
Mr. Speaker, how many minutes do I have remaining?
The SPEAKER pro tempore. The gentleman from Arizona has 10\1/2\
minutes remaining.
Mr. SCHWEIKERT. Okay, I will talk faster.
I know this is a little bit geeky, but this is important. Open
borders, inflation, these are components that just crush the very
people who we were having so much success with for a couple of years.
We all talk a great game about caring about working men and women,
but we are engaged in economic malfeasance right now. I understand it
is complicated, but the numbers don't lie.
When you start looking at these charts right now, when you start
seeing just parts of the PPI hitting a 12 percent annualized in the
commodity goods last month, we really, really, really need to start
taking this seriously.
Do you continue to float more debt to chase more helicopter money to
go out and buy more constituents? You are going to see sort of a false
economy for some of the calculations this year, where you may see a
number that says: Hey, income inequality also shrunk this year because
we gave out so much cash, but we also created economic violence because
we created detachment from work.
Remember, losing a year of work, losing a year of skills, losing a
year of progress in your career path even for the working poor has a
multiplier effect that if you look over the lifetime career, it is
pretty devastating.
You saw the decisions that were made to keep schools closed and the
amount of economic violence to working women in our Nation. In 2019,
there were more females in the labor market than men. Today, that just
isn't true.
The last one I will give, for those folks who fixate on monetary
policies, you are in an unusual moment. Remember, there is a difference
between fiscal policy and monetary policy. Monetary is Federal Reserve:
Hey, we are going to shrink the money supply. We are going to increase
the money supply. We are going to do this to protect the purchasing
value of the dollar for overseas, for in the country. We are going to
use interest rates. We are going to use bank reserves. We are going to
use those things as tools.
The fiscal side is: We spend money. We borrow money.
What happens when we are borrowing, because we are spending so much,
we are borrowing so much that we distort what they call monetary
supply. All of a sudden, the Federal Reserve is having to step in and
finance our chaos. It turns out Congress, because of its spending now,
is distorting monetary supply.
What this chart shows is--just take a look--this was the Federal
Reserve balance sheet. Just before COVID, it was shrinking. The economy
was doing so stunningly well. We had economic growth. The working poor
were getting dramatically less poor. We had almost no inflation.
Productivity was beginning to spike in the economy.

Remember, how do you pay people more money? You pay them more because
of inflation and productivity. Well, when you pay someone more for
inflation, they don't get anything. When you pay them for productivity
because there are new plants and equipment and these types of economic
investments, that is the golden child. That is where you are paying
people more because we have invested in them and in plants and
equipment.
That is also what is so devastating about the left's tax plan right
now. When you raise capital gains the way they are talking about doing
without incentivizing investments in productivity and investments in
people through those organizations, they are going to be paid less
money.
When you raise corporate taxes, there will be less money for those
things that make jobs more productive, and we have already seen the
numbers. We are going to unemploy a million people if the current
corporate tax model comes in.
We are now spending so much money that we are just distorting the
monetary supply for us in the world because the Federal Reserve needs
to keep buying our bonds. They try to keep interest rates as level as
possible for as long as possible because, God forbid, when you are
floating the scale of debt we are floating today, could you imagine if
the next set of refinancing, the next set of bonds, were at
traditionally the interest rates we had a decade or two decades ago?

{time} 2045

So I want to sort of close on this.

[[Page H2605]]

This over here is 2013 to 2016. This is 2016 to 2019. Most of this
economic change was really 2018 and 2019.
This is mean family income. If you take a look, the blue is the
poorest quartiles in our society. 2016, 2015, 2014, 2013, going back,
they were getting their heads kicked in. Income inequality really was
growing, but it was growing under the Obama's administration's
policies.
If you take a look at what happened after tax reform, income
inequality shrank. The blue here is our lowest quartiles. I hate that
number, but it is economics. Working men and women, particularly the
working poor, saw almost a 10 percent increase in their wages in those
couple years. The wealthy only saw about 2.9 percent.
If anyone ever wants to really dive into it, the discussion between
supply-side economics and Keynesian economics and the distortion that
politics have turned to those things, if you actually care about where
we are going--you remember the very first chart that showed $101
trillion of debt that is coming at us. We are making our society and
our country incredibly fragile to an interest rate spike, a military
conflict, or another pandemic.
If we need infrastructure, let's build infrastructure. We can work
out the financing mechanisms. But does long-term care really belong in
the infrastructure bill? We need a revolution in what healthcare is,
because you saw on the first chart, healthcare is the primary driver of
U.S. sovereign debt. Once again, understand the ACA, Obamacare, the
Republican alternative, Medicare for All, are not pieces of legislation
that change the cost of healthcare. When you see them, the percent of
GDP that goes to healthcare stays the same. They are financing bills.
This is one of the thought processes here that has been so difficult to
crack through our skulls. We keep having debates on this floor that are
about who pays and who gets subsidized. We don't have conversations of
what we can do to unleash creativity in technology, whether it be in
environment, whether it be in infrastructure, whether it be in
healthcare.
Until this place starts to see this in a holistic sort of continuous
circle of healthcare actually has something to do with infrastructure,
but the way you keep debt financing it, the debt becomes our fragility,
and the debt is what is going to crush our future and do true economic
violence to the working poor, and even to my 5-year-old daughter's
future.
Mr. Speaker, I yield back the balance of my time.

____________________