[Congressional Record Volume 168, Number 99 (Thursday, June 9, 2022)]
[House]
[Pages H5438-H5441]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  SAVING SOCIAL SECURITY AND MEDICARE

  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. Madam Speaker, I appreciate you and the staff's 
patience as I am racing up the elevator.
  We are going to do something that is new to me today. And please wave 
at me if I start machine gun speaking.
  And I have gotten teased about it a bit, so this week, I got to 
become the ranking member for the Republicans, that is sort of the 
senior Republican over Social Security in the Ways and Means Committee. 
And it is an area I have had a fascination with since I got here 
because, you know, it is $1 trillion a year, and it is running out of 
money.
  So, the last few times I have come behind these microphones, I have 
turned to my brothers and sisters on the left and begged them to stop 
doing what they are doing because we have showed board after board 
after board after board of how many people they are hurting, the 
working poor, the poor, the working middle class. It is just being 
destroyed by Democrat policies.
  And I appreciate the virtue signaling. I understand maybe for many of 
them they didn't understand the most basic economics of what inflation 
was going to do and crushing people.
  But now, all of a sudden, I have the responsibility--I take this 
really seriously. How do you save Medicare? How do you save Social 
Security?
  And it is not a game, and it is not just little adjustments here. You 
talk to groups, even fellow Members, and they somehow think a little 
adjustment here, waste and fraud. A little adjustment here. We are 
talking trillions.
  Remember, our best math right now is functionally, over the next 30 
years, just Social Security and just Medicare, when you add them 
together, and then the financing costs, are close to $120 trillion 
short. So functionally, every dime of future debt is the shortfall of 
Medicare and Social Security.
  It is demographics. We got old. At the end of this decade, 22 percent 
of us are 65 and older. A country like Japan, it is 30 percent. Japan 
has dramatically higher savings rates.
  At the end of this decade, 22 percent of our neighbors will be 65 or 
older. And we functionally have nothing set aside for that.
  Medicare is moving to being 100 percent general fund. The Medicare 
trust fund, the part A, the hospital portion, we got a good number a 
couple of days ago, so now it is gone in about 5 years. And we have no 
idea how we replace that because the model right now, as it is written 
in statute, is hey, just stop paying doctors and hospitals. That is 
going to work really well, isn't it?
  And we will see here, the actuarial report for Social Security got 
extended out a bit. But functionally, in a decade, our parents, our 
grandma and grandpa, the model is at this moment, 27 percent cut. And 
that isn't the true story. It is much, much, much darker.
  And I am going to do my very best here. And look, I have got to be 
honest; I am only partially through starting to dig through the numbers 
that Keith handed me, and we are trying to understand the Medicare 
actuaries and the Social Security actuaries. They just published their 
report, but it is based on data that may be as much as a year out of 
date. They have missed much of the inflation cycle so--one of the 
benchmarks was February this year. Well, think about what has happened 
to inflation since then.
  And I am going to do my best right now to present the cruelty, just 
the cruelty of what the left has done to the poor, but particularly to 
the elderly poor.
  And once again, I will give them credit. I don't think it was meant, 
but there is a misunderstanding here of what inflation does, because it 
is not just today. It is not just this year.
  We are trying to build a model here of how many of our brothers and 
sisters who are older at the end of this decade are going to be living 
in poverty because of what this place did this last year.
  So my best model right now is about 22 percent of our brothers and 
sisters who are 65 and over are living in poverty today. And it is a 
back of the napkin math, and I may be wrong. God, I hope I am wrong.
  But if inflation stays substantially above the mean for a few more 
years, it is going to be a third of our retirees who are going to be 
living in poverty. This is what they did.
  And so, in past weeks I have come behind the mike and said, here are 
ideas to knock down inflation. If inflation is too many dollars chasing 
too few goods, let's make more goods.

[[Page H5439]]

  


                              {time}  1300

  Right now, it is the passive approach. We had Janet Yellen in front 
of the Ways and Means Committee yesterday, and it is basically: Well, 
we are going to let the Federal Reserve jack up interest rates, put a 
bunch of people out of work. We are just going to raise the misery, but 
it is their problem. It has nothing to do with the crappy economic 
policies that have been pushed through this body.
  How about some things the left and the right could agree upon? 
Instead of just spending trillions and trillions of dollars, how about 
incentives and mechanisms to create productivity because when you make 
more stuff, that is the most elegant way to knock down inflation. Of 
course, that would mean for our brothers and sisters on the Democrat 
side to accept something called supply-side economics.
  First, we need a little bit of a reference here. These numbers are 
almost 2 years out of date because we haven't gotten a CBO updated 
number yet, which I believe should have already happened. Projected 
2051, so that is basically 29 years from now.
  Outlays as a percentage of GDP--this is policy. This should be 
driving every bit of policy around here. We chase shiny objects all day 
long, but we are basically saying, hey, Social Security and Medicare, 
the dedicated revenues, the revenues we expect to be getting in over 
that 29 years are going to be about 6 percent of GDP. Outlays will 
almost be 21 percent of GDP. The rest of the budget, revenues actually 
exceed outlays.
  Once again, we have to get this through our heads. Medicare, Social 
Security, the baseline from a couple of years ago was $112 trillion. My 
math says it is about $120 trillion of borrowing. The rest of the 
budget is in balance.
  Why isn't this what we talk about every single day? Don't we care 
about the 22 percent of our brothers and sisters who are going to be 65 
or older by the end of this decade? Do we have not a moral, an ethical, 
an economic obligation to fix a system that is collapsing and has been 
collapsing for years?
  You have all heard the saying that it is the third rail. I have been 
teased by some of my colleagues here. ``Schweikert, you are an idiot,'' 
which may be absolutely true. ``Your willingness to take on Social 
Security, have you decided to end your political career?''
  You can't get in front of microphones and tell people the truth about 
the math. They don't want to hear that. They have been lied to for 
decades, and they believe the lies because the lies are comfortable. 
You can't show them the slides of what is actually about to happen.
  Yet, how do you fix something unless you admit there is a problem? 
This place is like an alcoholic who is unwilling to take that first 
step at their 12-step meeting, admit they have a problem. If this board 
doesn't tell you the problem, I don't know what will.
  This board is 2 years old. Once again, I don't have an updated number 
from CBO. This shows $112 trillion of borrowing solely from Social 
Security and Medicare. Obviously, Medicare is functionally three-
quarters of the problem. Social Security is a quarter of the problem. 
But that is $112 trillion, 2-year-old number, my current number, $120 
trillion of borrowing in today's dollars, so inflation baseline 
dollars. The inflation that has exploded in the last year because of 
Democrat fiscal policies makes these numbers much uglier.
  Just as a reference to understand why I am so concerned and why I am 
mad this place isn't on fire with almost a level of panic over these 
numbers, when you see this scale of debt, in a couple of decades, if 
the mean borrowing cost is 2 points higher, in about 20, 25 years, 
every dime of tax revenues, tax receipts, every dime is just the 
interest cost.
  Do you get that? Do you realize the level of fragility we have given 
to this country? Do you care about people, care about kids? Do you care 
about seniors? Then this should be the fixation because this is real 
math. Unless somehow the Democrats have come up with a way to repeal 
the laws of mathematics, this is what we are up against.
  Yes, you will be booed when you get up in front of an audience and 
say: ``Hey, do you realize with Social Security, in about a decade, you 
will get about a 27 percent cut? That is not even calculating the 
dramatic increase in your Medicare portion of your premiums that for 
many seniors will eat up every dime of their Social Security check.''
  This is real. It is the biggest thing going on in our country at this 
moment, but it is like a slow-moving avalanche coming at us. It is 
going to wipe us out, but it is not here yet, so let's worry about 
something else.
  Just to emphasize a little bit, Medicare faces a $78 trillion cash 
shortfall over the next--and this is now 29 years, and the number is 
worse now. Once again, I just haven't gotten an update because these 
are `21 numbers. We should already be starting to project the `22 and 
`23 numbers. But do you see that?
  We have about $20 trillion coming in in payroll taxes and almost $98 
trillion in projected expenditures, and this is before the inflation 
cycle. Medical inflation, baseline inflation, is going to drive these 
numbers up dramatically.
  Maybe this is too much of a current snapshot, but you are starting to 
see it. Everyone just got--if you are on Medicare, you just saw it, or 
you just got it. Functionally, your healthcare costs just bounced up 
for part B $250 a person, $500 a couple. The dirty number is that that 
is not even close to what is coming. That is what you just got. You are 
going, whoa, it went up $500. But functionally, 2 years from now, we 
may get as much as an 8 percent COLA because, remember, the COLA 
adjustment on Social Security is about 24 months behind. It takes that 
long to get the calculations.
  A community like mine--I represent the Phoenix-Scottsdale area--has 
the highest inflation in the Nation. My area is over 11 percent 
inflation. But they will do a national mean, which will probably be 
closer to 8-something, and you are not going to get that for a couple 
of years. You are going to get 3-plus, 3\1/2\-plus this year. You are 
going to get to live poorer, substantially poorer, for the next couple 
of years, and the COLA is not going to keep up.

  The basket that is used to calculate doesn't keep up, and it has 
already begun. The eating up of how you survive in retirement has 
already begun. The money is disappearing. We are working on this. This 
is a work in progress.
  This is a dangerous speech for me to be giving because I am going to 
anger a number of people who don't want to know the truth. I am going 
to anger a bunch of my brother and sister Members here who are 
terrified their voters find out.
  The fact of the matter is, I will be back in a couple of weeks 
revising these numbers, but this is from some of the best literature we 
found when I found out I was going to be taking on the responsibility 
over Social Security.
  What this board is basically saying is this is your cost. If you are 
65 years old today, and you are stepping into retirement, we expect 
your out-of-pocket to have gone up about $85,000. It is an assumption 
that healthcare inflation remains at 1.5 percent over the Consumer 
Price Index for 2 years. This is the change you get if it is 2 years.
  The problem is my Joint Economic Committee is saying the structure of 
inflation may be with us for a decade. Now, it may not be running at 
like my neighborhood, 11 percent, or your neighborhood, probably 8 
percent, for another 7 to 10 years, but it is going to be higher than 
normal. We are having to rebuild all of our models.
  What does this mean, though, if it is just for 2 years? If you are 45 
years old, the change in your cost when you hit retirement that you are 
going to have to be contributing to the healthcare portion--so you get 
your Social Security check, the portion that is put off for the 
healthcare, for Medicare. You are 45 years old; just these 2 years of 
the above inflation. It is a quarter million dollars, and that is out 
of your pocket.
  We keep talking about, well, here are your fuel prices today. Fine. 
Be outraged about that. You should be. But understand the cascade 
effect, that we are going to drive so many people into poverty through 
the rest of this decade and at the end of this decade, and this place 
is silent.
  We are just silent on the damage we are doing to people's survival 
because

[[Page H5440]]

the shiny object is what is at the gas pump right now. You should be 
enraged. The economic devastation, the misery the left has foisted on 
this country--and I am sorry. I am being a bit of a jerk, but they did 
it, and they were warned.
  They were warned by my kind. Well, they were warned by my kind, but 
they were warned by their own economists. Yes, they have about a dozen 
economists that said, go ahead and spend the trillions. It won't make a 
difference. Please stop listening to them.
  But you did have a number of your leftist economists who said: Don't 
do this. You are going to hurt people. But it buys us votes, and they 
did it. Congratulations.
  This is your future, and this is only if the increased inflation 
lasts for 2 years. What if my model is correct, and it lasts throughout 
the decade?
  This isn't my math. This is some literature we are finding out there. 
We haven't had time to break it down and do our best vetting, but these 
all came from big boy researchers, well respected. This is a little 
hard to get our heads around, but we are going to do our best here.
  Short-term healthcare inflation can have devastating retirement 
consequences. What they are saying is with the spike today in 
healthcare costs, you turn 65, you start getting your Medicare, you 
start getting your Social Security, the change in cost you have for the 
next 20 years is in these numbers.
  They are basically trying to say, what happens if you are 65, you 
have 1 year of the current medical inflation, and this is 
underestimating it. The latest number I had as of this week was in the 
high 16s for healthcare inflation. This one is 15.8.
  But just the increase in your healthcare cash; this isn't your 
Medicare payment. This is cash coming out of your Social Security 
check, out of your bank account. So, you are 65. It is going to be an 
additional $72,000.
  But if you are 45 today, and this increased inflation is only for 2 
years, it is $434,000 of additional spending you need to be prepared 
for in your retirement. This is the math.
  Just a little bit of healthcare inflation today. So if the baseline 
is 8.3--that is my prediction for tomorrow's May number. We will see 
how accurate I am. Healthcare is almost double the baseline inflation.
  If it ran at that for 2 years and then went back to the mean, and you 
are 45 years old today, so you retire 20 some years from now, the 
change in the baseline of your future cost is now approaching a half 
million dollars. Well, in this case, $434,000. Let's be a little more 
accurate.
  Is anyone here talking about this? How many people, with the savings 
you have right now, with just trying to survive buying that tank of gas 
today, are going to be able to save enough money for future expenses? 
That Social Security check you have basically disappears, shrinks away, 
because you are now having to deal with the inflationary costs.
  That is why my back of the napkin math or back of the envelope math, 
if I can use the colloquialism, is starting to say, oh, my God, I hope 
my math is wrong. But where this is going right now, I think we are 
heading toward about a third of our retirees being in poverty in a 
decade.
  Remember, Social Security was an antipoverty program. But, once 
again, crappy public policy here by the left, and this is the decades 
and decades of future misery they brought to us. Does anyone on the 
other side own a calculator or actually showed up at their economics 
class?

                              {time}  1315

  Social Security income functionally gets erased by rising healthcare 
costs. Now, this is what brought me to do this on the floor. This last 
weekend, I had inklings I was going to get the responsibility over 
Social Security for the Republicans, and so I don't sleep well. The 
only way I fall asleep often is I sit up and read, and I try to read 
stuff that is actually important to this job.
  I came across this article that didn't have good math in it, but it 
was functionally alluding that the healthcare inflation--and this is 
beyond just all the other inflation of just trying to buy food and pay 
for your rent and everything else, just healthcare inflation--was going 
to destroy, was going to consume many, many, many seniors' entire 
Social Security check.
  I don't get credit for this. My staff actually found this. But let's 
actually go back to our 45-year-old, this bottom line. This is for a 
couple--because they found this on someone else's literature, so I 
can't take credit for the math. A couple, they are going to get about 
$1.153 million, $1,153,000 in Social Security benefits when that 45-
year-old couple basically enters their Social Security benefits.
  Okay. But with the inflation that has been built in--and this is, I 
think, only a couple years of inflation, but the calculation over 20 
years, with the change of inflation, so they are going to get 
$1,153,000 of Social Security benefits, but they are going to spend 
functionally out of their pocket $1,543,000 in healthcare costs, and 
that is with Medicare.
  Does anyone see a problem?
  So you start looking at the lifetime retirement healthcare costs when 
it is 1.8. Based on cost projection, two years of inflation cost 
projection, functionally their healthcare costs in this model are 156 
percent. So every dime of their Social Security check, plus another 56 
percent that they are going to have to find other resources to pay for, 
just to cover their healthcare because of inflation.
  The couple that turns 65 today--or actually a month or so ago when 
this calculation was done. Remember, this calculation under calculates 
inflation. This was done almost back in February with those numbers, 
and inflation turned out to be much worse. That couple, as a mean 
across the country, is going to get about $968,000 in Social Security 
benefits over what we calculate as the average mortality numbers 
lifetime. Seventy-one percent of their Social Security income is going 
to healthcare costs driven by, substantially driven by this increase in 
inflation.
  So if anyone is listening right now, God, I hope I am wrong. Start 
saving every dime you can because this government's Democrat policies 
from this last 2 years have absolutely screwed you over. We are going 
to spend the rest of the decade fixing the damage that was done in the 
last 15 months. The math is the math.
  If I am being hyperbolic, I am doing it because it is important. I 
don't want to live in a country where a third of my seniors are in 
poverty because of a decision they made a year ago.
  This is the actuarial report on Social Security and Medicare when the 
trust funds are gone, and there is a problem with their math, and that 
is it was done on February's baseline. Inflation is dramatically higher 
than what we thought the February baseline was. Now, the economists are 
saying it is going to last much longer, meaning these dates are going 
to erode.
  But functionally, you are 66 months, according to the actuary report, 
and Medicare part A, the hospital portion, is gone. So functionally, 
you go into your hospital, and your doctor doesn't get paid to see you. 
How is that going to work out? Seriously, who is going to pay?
  The new number is about 150 months for Social Security. I think that 
is wildly optimistic in this inflationary time. But the baseline model, 
how are you going to do it? Do you plan to live for another 10 years? 
Okay. Whether in those 10 years you are on Social Security or you are 
heading into retirement, are you prepared to have not 25, but 27 
percent of your Social Security check disappear? At the same time, I am 
showing you charts saying, hey, you are 65 today. Because of medical 
inflation--if it lasts where we are at, 2 years--76 percent of your 
Social Security money is going to healthcare costs, and we are also 
then going to reach over and reduce your Social Security check by 27 
percent.
  Does anyone else see a problem coming?
  This place doesn't own a calculator, and yet as I used to get teased 
when I was a child, the math always wins. But this place will avoid the 
math because it is hard. It is the sort of thing that gets you 
unelected. It is the sort of thing that makes your voters mad.
  It is your absolute moral obligation to fix these programs without 
lying.
  In a future presentation, I am going to come back here, and I am 
going to

[[Page H5441]]

also overlay the private pension systems, the multi-employer pension 
systems, all the other shortfalls, and if any Member here uses the 
words ``retirement security'' and isn't bathing in fixing these 
numbers, they should be ashamed of themselves.
  Madam Speaker, I apologize for the amount of caffeine I have had 
today, but I am not here to be hyperbolic. I am here to beg of this 
place to stop chasing the daily shiny object that may get us some 
press, get us a few minutes on cable television. This is the hard work 
we are elected to fix, and it is also our moral obligation to save the 
future.
  Madam Speaker, I yield back the balance of my time.

                          ____________________