[Congressional Record Volume 168, Number 107 (Thursday, June 23, 2022)]
[House]
[Pages H5872-H5875]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PENDING ECONOMIC DISASTER
The SPEAKER pro tempore (Mr. Lieu). Under the Speaker's announced
policy of January 4, 2021, the gentleman from Arizona (Mr. Schweikert)
is recognized until 10 p.m. as the designee of the minority leader.
Mr. SCHWEIKERT. Mr. Speaker, just because we are doing some
organization and because we are all up against the tyranny of the
clock, I yield to the gentleman from West Virginia (Mr. Mooney).
Rugby World Cup
Mr. MOONEY. Mr. Speaker, as a competitive college rugby player at
Dartmouth College, I picked up a love for the game of rugby. I continue
to enjoy watching the sport as a Member of the U.S. Congress. I proudly
serve as the co-chair of the Congressional Rugby Caucus, and I am
honored to be an advocate for the Rugby World Cup. I am thrilled to
rise today to celebrate that the United States has been named the host
site of both the 2031 Men's Rugby World Cup and the 2033 Women's Rugby
World Cup, a monumental accomplishment that brings the third largest
sporting event in the world to our shores.
Earlier this year, my caucus co-chair, Democrat Eleanor Holmes
Norton, and I introduced a bipartisan concurrent resolution to
recognize and support the efforts of USA Rugby and its partners to
bring upcoming Rugby World Cup tournaments to the United States. Rugby
is one of the fastest growing sports in the United States with more
than 100,000 USA Rugby members playing in over 2,500 clubs nationwide.
The United States possesses all the necessary state-of-the-art
infrastructure in its stadiums and potential host cities to ensure that
the tournaments set a new standard of quality, comfort, security, and
safety for players, fans, and sponsors. The eventual location of U.S.-
based Rugby World Cup events will be chosen from a group of over one
dozen cities in the United States.
Rugby is about so much more than the tailgaiting and tackling. At its
core, rugby teaches comradery, resilience, and respect for the
opposition. It is also a sport with a massive international reach. With
rugby boasting 405 million fans across the globe, the Men's Rugby World
Cup has become among the most popular sporting events in the world. I
congratulate all the hardworking individuals at USA Rugby who have
spent a huge amount of time and effort on the lengthy and involved bid
process. I would also like to recognize the efforts and vision of the
leadership from World Rugby and the World Rugby Council.
This moment marks a pivotal turning point for the sport of rugby in
the United States and around the world. This will be the first time a
Men's Rugby World Cup has been held in North or South America. A new
hosting concept has been put in place as the United States stages
consecutive men's and women's events within the same organizational
structure.
A projected 4.1 million fans will attend both the men's and women's
Rugby World Cup events in the United States. Recent Rugby World Cup
tournaments have brought more than 242,000 international fans from
around the world into the host countries and seen more than 1.7 million
spectators flock to the stadiums, generating significant revenue at the
local and national level.
USA and World Rugby will now lead a multi-year effort to build
anticipation for 2031 and 2033 while developing infrastructure to
guarantee successful tournaments. Additionally, USA Rugby will use the
next decade to drive significant investment in the game at the youth
level, increase access to and diversity in rugby, take rugby to the
next level at the high school and college levels, and grow USA Rugby
membership to 450,000 members.
Bringing this event home is great news for our country and for the
future of the great sport of rugby in our Nation.
Mr. Speaker, I thank the gentleman from Arizona for yielding.
Mr. SCHWEIKERT. Mr. Speaker, I am going to try something tonight
because I am very, very concerned this place isn't paying attention to
the numbers and how much trouble I believe we are in. My argument and
my thesis is very simple: If I am wrong, I am wrong; but if I am right
and this place didn't prepare because of the numbers we are seeing,
then we will damage the people, we will damage the economics, we will
damage the country, and we will damage our future. We are not taking it
seriously enough on how the numbers are eroding and how fast--how
fast--the numbers are eroding around us economically.
Now, originally, this was going to be a 1-hour presentation. Now it
looks like I have 22 minutes because of the tyranny of the clock, so I
will try not go too fast, and I promise I will dispose of some of the
boards. As always, wave at me if I start rambling at high rates of
speed.
{time} 2140
This is our baseline. The problem is this chart is now a year and a
half old and the numbers are much worse. The reality, 29 years from
now, CBO--this
[[Page H5873]]
isn't some off group; this is our Congressional Budget Office--
functionally says we have $112 trillion. My back of the napkin now says
$120 trillion of publicly borrowed debt in today's dollars, not
inflated dollars.
Functionally, 75 percent of that debt is Medicare. Twenty-five
percent is Social Security. The rest of the budget is in balance.
Well, what happens to Medicare particularly when you start having
inflation like we do?
And I represent a district that has had over 11 percent inflation. I
represent the district with the highest inflation in America.
Let's actually start to walk through what many of the experts are
saying. And remember, I am trying to make a very simple point here. I
am worried about my country. I am worried about our debt and the
ability to pay, and it is skyrocketing; and then the cascade effect of
how many people are getting poorer.
Remember, in the first 15 months of Democrat control here, Americans
are dramatically poorer today than they were a year ago.
So let's actually walk through this. When Larry Summers--when I am
coming to the floor using quotes for Larry Summers--you have got Larry
Summers. In order to do what is necessary to stop inflation, the Fed is
going to raise interest rates enough that the economy will slip into
recession. That is one of the Democrats, at least up until he had
heresy of telling the truth on Democrats' $1.9 trillion spending last
year, and then you put him on the outs. But up till that moment he was
Democrats' favorite economist.
But now he is basically telling us we have structurally built in so
much inflation, we are going to have to have the Federal Reserve force
us into recession.
Do you know what happens to people, what happens to poor people, the
working middle class, the working poor when you are in a recessionary
cycle, and how many years it takes for the public to get their lives
back?
The economy is heading for a hard landing when we are now starting to
see over and over and over the very economists that, a month ago, were
saying we might be able to negotiate a soft landing. Oh, we may just
tip a little bit of growth and unemployment and come back.
And now those same economists, a month later, are saying, no, we are
heading toward a hard landing. We are going into recession.
By the love of the Dear Lord, I hope they are wrong. But if they are
right, have you seen a single thing this body has done to prepare?
The U.S. economy is heading for a hard landing, and this one is
important. We have got to understand. We are starting to see numbers
now that--and we had a Member of the majority here, I think a couple of
days ago, come and somewhere they threw out, oh, but there is all this
excess money in the people's savings accounts. That isn't true anymore.
You do understand, the personal savings rate has plummeted from 26.6
percent a year ago, functionally, a year ago, to 4.4 in April, and it
continues to vault. And understand, that personal savings rate of 4.4
is below where we were before the pandemic.
If we start to hit recession right now, our brothers and sisters out
there don't have that cash reserve in their bank accounts.
Do you understand the concept of fragility?
And now we actually start to see the other thing that really
genuinely terrifies me, and we are going to do a couple of slides on
this. And I know I am going fast but we are up against the clock here.
We have a mandatory shutdown in about 20 minutes.
Treasury yields are really starting to decline. And you have got to
understand, we basically had budget projections, Congressional Budget
Office and others, who had been basically building analysis of what
will the debt look like? And they were using remarkably historically
low interest rates.
A year ago we had expert after expert coming in front of the Ways and
Means Committee and other places, Joint Economic Committee, oh, we are
going to be in historically low interest rates because we are getting
sold as a society. We have all these people saving. We are going to be
more like Japan. Turns out they are wrong.
Remember the previous slide? The savings rate from the largesse of
the giveaways, just structurally we are getting demographically older.
We should be retaining. It is gone. The savings are gone.
And now we are going into an interest rate cycle where they are
having to start to raise interest rates on Treasuries and everything
else to attract capital from around the world. If you have been
watching the U.S. dollar, you understand what is going on with this.
What happens when U.S. sovereign debt--if interest rates are 2 points
historically--so we go a 30-year run, and if we are just 2 percent
higher than what CBO modeled last year, 2 points, in about 25 years, I
believe the math is, every dollar of tax receipts, tax revenues, goes
just to pay interest. There is no more government. We are just covering
our debt.
Do you understand the fragility we have done to ourselves with this
inflationary cycle?
The average interest rate being paid on Federal debt--and this, I
know this board is a little hard to read and hard to see. But
historically, go back to the 1960s, 1970s, 1980s, the period that we
have modeled is way down here. This was not normal.
God forbid, if we go back to normality in U.S. sovereign interest
rates, and then we are functionally running $30 trillion of debt, do
you understand how much of--the left wants to spend money on these
things. The right, we want to defend the military. There is no money.
And you saw the first board that basically said the massive, massive
shortfall in Medicare. Remember, Medicare is mostly a general fund
expenditure. It is like only 20 percent of it really is a part A trust
fund, and that is gone in 5 years. And it has begun. It has begun.
And the other thing, it is more than what we borrow today. It is the
amount of U.S. sovereign debt. And I didn't bring that board, and I
probably should have, that has to be refinanced every month. So you may
borrow $1 trillion this year, but you had to refinance 5 or 6 or $7
trillion, and every dime of that now is reset at the new interest
rates.
And the higher interest costs--and I am going to do a couple of
variations of this. But this is functionally, 9 budget years from now.
If it is going where we think it is going, publicly held debt--you are
now in the 126 percent of GDP. And most of this movement here, when you
start to see this movement, it is the financing costs. It is the
financing costs of this government. Because the real explosion of our
demographic spending, you know, the fact that in 7 years, 22 percent of
our country is 65 and older, that explosion of the baby boomers costs--
it really starts--it has already begun, but it really, that curve
really starts to take off at the end of the decade; at the very time we
are already pushing 126 percent of debt to GDP.
{time} 2150
Does anyone understand the level of fragility? It is this
inflationary cycle. Democrats did something horrible March last year.
They didn't listen to their own economists because they were so busy
living in this fantasy world of free money. Give it away. People will
love us. Don't require them to participate in the economy. Now we are
paying the price.
If you are trying to save for retirement; if you are a young couple
trying to get ready to buy your first house, there is a technical form
for it in economics. You are screwed. Because every single day that
savings you have is worth less.
If you are a saver, your savings today is functionally about 7
percent less valuable than it was a year ago.
I mean, those of you who intend to retire one day, have you actually
started to think about that the value of the savings you had, if you
put it in safe things like bonds or savings accounts, is substantially
less valuable today. Its purchasing power is less today than it was a
year ago.
If this continues for a couple years, do you understand how many more
years you really need to work? Do you understand how much more savings
you have to have? Do you have an understanding of how much you are
going to have to help your kids buy that first house? This is not a
game.
[[Page H5874]]
Two weeks ago, I came here, and we tried to do some of the math on
the board of how many seniors. If the current inflation cycle lasts for
about 24 months, we basically were trying to do the math of, okay, here
is what happens to seniors' savings. It falls, the value of it. It is
functionally transferred to government.
What happens to the COLA? Well, the COLA and Social Security never
gets close to keeping up to the actual inflation rate because of the
lag problem.
That 20 percent copay you have on your healthcare, and if healthcare
inflation is almost double the CPI rate, and you've got to pay that 20
percent, we were looking at math that said you could potentially double
the number of seniors in poverty in a decade.
Has anyone here actually wanted to dig into that math and start to
understand? This is not a game.
I know there is a desperate attempt by the administration and my
Democrat colleagues, oh, this is inflation because of a war in Ukraine.
This is greedy oil companies.
No, it is not. You believed in modern monetary policy, and it blew
up.
Remember, much of this inflation was structurally built in before the
war in Ukraine. You see it in these sorts of numbers.
By the end of 2021--and remember, that is before Russia's invasion,
right?--credit card debt climbed to $856 billion. It is a 28 percent
annualized increase in the fourth quarter of last year.
It had already begun. People were already borrowing on their credit
cards because prices were going up so fast. So the way they were
supplementing their consumption is they were building up debt.
I have showed you the board before. Savings rates have collapsed. We
are now seeing credit card debt explode. When those hit up the wall--
you see what happened 3 weeks ago--consumer sentiment collapsed.
It is because all of a sudden I can't keep financing my lifestyle by
using up my savings and chewing up credit card debt.
This is going on right now. Where is the concern? Does anyone here
care about people and what is going on to them economically out there,
outside the walls of this building?
The U.S. economy is heading for a hard landing, and this is just
functionally that same thing, once again, by other sources talking
about the growth of credit card debt--or, excuse me, the collapse of
savings rates.
Credit card balances, once again, really, really--from other sources,
saying the growth. This is a real problem.
If we were in a time of prosperity--a couple minutes ago, I was in
the back room. I saw the spokesperson for the White House. These are
fine economic times. Have they lost their minds? Do they own, like, a
subscription to any economic journal?
To say things are fine at the same time you can see the aggregated
data of savings collapsing, credit card debt exploding, interest rates
going up, interest rates and sovereign debt, and now start to
understand what that is going to mean in the financing of this
government.
Now you have got to deal with the Democrats' policy set. The fact of
the matter is, thank God, the Senate has a couple Democrats that
actually may have saved the country--it is hard to say that--by
stopping the Build Back Better and the just stunning amount of debt the
left wanted to build on.
When you start seeing numbers saying that if the Democrats' package
had passed, we functionally would have gone from about $17 trillion of
publicly-held borrowing before the pandemic to $44 trillion by the end
of the decade. This is if the Democrats' spending plans and borrowing
plans had passed.
An absolute, absolute lie, and we have shown it over and over, oh, it
is all paid for; except it wasn't. It wasn't even close.
I think in the Build Back Better, the best estimate we were able to
come--and we used their math--was they were covering about 30 percent
of the expenditures, and they were covering it in a way where they were
going to raise certain taxes that would have actually slowed down the
economic growth that we are desperate for.
Now you start to see my fear for the country. When we start to model
what happens to the projected Federal debt under various interest rate
scenarios--and I know I am sounding like a highly caffeinated
accountant on steroids, but this is the stuff we are paid to read and
understand.
We are not paid to stand behind these microphones and virtue signal.
But, God, that seems to be what we do here. We do policy by virtue
signaling.
Let's come here for just one moment. Here is functionally where we
are at. If you start to say, okay, the mean of U.S. sovereign debt, the
30 years, the 10 years, the 20s, you know, up and down, CBO's baseline
basically says we are at 202 percent of debt to GDP.
With a small increase going back to almost normality, with the
historic average over the last 30 years, we are starting to hit numbers
close to 300.
If we actually were slightly above historic normal, you are at 357
percent of debt to GDP. Does anyone believe this economy doesn't
collapse long before that?
People run from the U.S. dollar. They dispose of U.S. debt. Can you
imagine what the chaos, what the misery, what the dystopian nature of
economics would be in this country if you start to run up these levels
of debt.
You already saw in a previous chart we are heading toward 126 percent
of debt functionally at the end of the decade. Debt to GDP. That is
publicly held borrowed money.
At the same time, you are going to be up against the Social Security
trust fund running out of money. Social Security recipients are heading
toward a 25 to 27 percent cut. The Medicare trust fund will have
already been gone for 5 years, so we still haven't figured out what is
going to happen to the payments to doctors and hospitals within that.
This is not a game, and it is in front of us. If we get here a couple
years from now, and all this is blowing up on us, and this place
pretends they didn't know, maybe I could sit them in front of the hours
I have spent behind this microphone going over the math. The math is in
those binders that are sent to us two times a year.
Here is one of the things that truly terrifies me, as you start to
get into the new interest rate scenarios. This isn't long term. This is
basically, yeah, we start to think of what mean rates mean, and you
start to add in just a 2 percent change.
That 2 percent--and this is within the current 10-year window--you
start to basically add $13.4 trillion additional--well, debt, and this
marginal here is just the marginal increase because you start to chase
your tail.
I have a chart, and I need to actually have it graphically made so it
is easier to see. We will be financing the debt that we are financing.
We will be chasing our tail, and that is where we are heading.
Now the cruelty.
Mr. Speaker pro tem, may I ask, because I am looking at the clock
above. Can you tell me how many minutes I have?
The SPEAKER pro tempore. About a minute and a half.
Mr. SCHWEIKERT. I promise you, I am going to use all 5 minutes.
This is the cruelty now to poor people, to the working poor, to that
hardworking middle class, to those retirees. When you come to them and
say, all right, let's take a look here.
Forgive the colors, but the green would have been if we had hit the 2
percent sort of Federal Reserve benchmark inflation goal. This here is
where we seem to be annualizing right now, and this is some of the
newest projection for the next couple years. It is about 7.4.
But when you see this bar come down, it basically means the $100 you
had in 2022, if you get to 2032, so a decade, that $100 you have, if we
stay at this sort of inflation rate, functionally, you have lost half
of its purchasing value.
So you have saved and saved and saved and saved and saved, and if you
start running--if the current interest or current inflation environment
were to hang around for a decade, at the end of that decade, half the
value is gone. You have lost half of your savings.
This is what is going on. What if it is just for 2 years? You start
just doing it for 2 years, and you start to realize you have lost
almost a quarter. Then you compound that out to you want to retire one
day. You want to finance your kids' school. You want to do these
things.
[[Page H5875]]
Do you understand how the difference of your earning power has to
change just to make up for the loss of the value? I represent a
community that is going through 11 percent inflation rates.
Then the last one in the last how many seconds I have. Please.
Please. Someone hire an economist to talk to the White House. A gas tax
holiday? I mean, you can hear the economists rolling on their backs
laughing right now.
Mr. Speaker pro tem, thank you for your tolerance tonight. I yield
back the balance of my time.
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