[Congressional Record Volume 169, Number 20 (Tuesday, January 31, 2023)]
[House]
[Pages H566-H568]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                MOST AMERICANS POORER TODAY THAN IN 2019

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 9, 2023, the Chair recognizes the gentleman from Arizona (Mr. 
Schweikert) for 30 minutes.
  Mr. SCHWEIKERT. Mr. Speaker, I hope that my friend from Georgia is 
enjoying the experience. In the old days when you were bad, we used to 
put you in the chair to have to cover Special Orders.
  Would you believe I had to cover a lot of Special Orders as a 
freshman?
  We are going to spend a couple of minutes tonight doing all sorts of 
things, Mr. Speaker, but one of the first things I want to walk through 
is: How many understand we are all poorer today than we were just a 
couple of years ago?
  We have to stop this White House, my brothers and sisters on the 
left, and even others, talking about how wonderful the economy is and 
how well things are going. The fact of the matter is that for the vast 
majority of the population, you are poorer today than you were in 2019, 
except for a little bit of a quirk for some population in L.A.
  To give you a sense, Jason Furman--you know that rightwing economist. 
That was sarcasm. Real wages are lower today than they were in December 
2019 for every industry except retail trade and some leisure and 
hospitality. That is Jason Furman putting it out on social media 
because we have some updates today. This is off the Bloomberg Terminal 
from about 20 minutes ago.
  One of the reasons I am also here is I represent Scottsdale-Phoenix, 
one of the greatest spots on Earth, particularly during the winter. 
Please come visit us.
  My folks in the Scottsdale-Phoenix area, if you look at the index 
that has come out from BLS, the Bureau of Labor Statistics, their 
wages, they are 4.5 percent poorer today than they were just 1 year 
ago.
  Don't tell me things are wonderful if you are a family struggling 
just to figure out how you cover your gas and groceries.
  ``Well, David, gas is down.'' The data is the data.
  If you have had this type of wage growth but inflation in your area 
is dramatically higher than that, that gap is cruelty. That gap means 
you are poorer. That gap means your savings for your retirement is 
harder. That gap means taking care of your kids is more difficult.
  When you go to the grocery store and are just trying to buy stuff for 
your family, somehow you seem to have a lot more--what is that old 
saying?--month than you do paycheck.
  I am sure I just screwed up the colloquialism, but you know what I am 
saying, Mr. Speaker. This is our brothers and sisters out there.
  Please, will this body start to give a damn about people trying to 
survive?
  We chase shiny objects here all the time that get us on television 
and that make us look popular, or we can look outraged.
  These are families in our neighborhood. I accept it is pages of math, 
but behind this math are people who are out there trying to survive.
  Mr. Speaker, have you gone out and tried to buy eggs lately? I accept 
that is an outlier. But for the majority of our brothers and sisters in 
this country, you are poorer today than you were at the end of 2019, 
and in this, you are poorer today than you were 1 year ago.
  I say to my brothers and sisters on the left that we have gone 
through this multiple times. We know you are not going to take 
responsibility, step up, and accept the responsibility for the crazy 
spending you pumped into the economy. Then, you created incentives not 
to participate in the labor force, detaching work from the morality of 
being there, and just also the good economics. Then, we wake up and 
people are poorer. Then you look at us saying: Well, we need to 
subsidize more.
  We are looking at data on the Joint Economic Committee and Ways and 
Means Committee that some of this will cascade through us as a society 
for decades.
  Mr. Speaker, we all grew up understanding the concept of the elegance 
of compounding interest. I get a little bit today, but then I build on 
that and build on that. It is the same thing in your life. You build a 
skill, you get paid a little bit more, and then you build a skill.
  What happens when you basically create a barrier to your 
participation in the labor market? You have lost that compounding of 
life. Now, we are seeing in some of the economic literature that our 
brothers and sisters are going to be poorer for the rest of their lives 
because of economic policies that set off inflation and then crushed 
other things such as productivity.
  I am going to get to productivity in a moment.
  This chart is very recent. We were just looking at some of the cost-
of-living indexes, and you do this whole deflator calculation. I am 
trying harder to make the charts readable. Apparently, one of the 
complaints I get on YouTube all the time is: ``Schweikert, I can't read 
your charts.'' I am trying.
  Here is 2019. We were hitting this amazing spike in basically your 
wealth. The pandemic hit. This is where we spent a fortune subsidizing. 
This collapse here is your ability to buy things because your wages may 
have gone up, but they didn't go up as fast as inflation, meaning you 
are poorer. The dollars you have are less valuable.
  Who is the beneficiary of this? Who benefited by you getting poorer? 
Here is the dirty little secret here in Washington, D.C. Borrowers. 
Borrowers benefit when your dollars become worth less.
  Who is the biggest borrower? Seriously. Play with me for a moment. 
Who is the biggest borrower? Have you seen this thing called the debt 
clock? The United States Government is sitting around $31.5 trillion.

                              {time}  1930

  Here is the great scam, and you are all party to it: The dollars we 
are going to pay back the national debt are less valuable. We stripped 
it from you. We stripped it from your savings. We stripped it from 
things you are going to have to buy in the future. We devalued you and 
your life and your savings, and we are going to pay back the debt in 
deflated dollars. Biggest wealth transfer in human history.
  How many people have come behind this microphone and at least 
attempted to apologize for what we did to working people in this 
country?
  That is why you are going to see some crazy calculations come out 
over the next few months of debt to GDP. It is because we devalued the 
dollars we are going to pay back the debt.
  Now, you and I are going to--it is a technical economic term--get 
screwed. I am sorry for the folks who have to keep track of what I say.
  The reality of it is, as in interest rates now, we pay higher 
interest rates because we have devalued the U.S. dollar functionally 
through inflation. You are devaluing your savings.

[[Page H567]]

  As interest rates go up, we are now looking at some data that says in 
25 years, if interest rates stay where functionally they are going 
right now, 100 percent of U.S. tax revenues go just to cover interest. 
There is no more military, no more Social Security, no more Medicare, 
there is nothing left because we are just covering interest. In 10 
years, the United States functionally has a structural $2 trillion a 
year deficit.
  When our brain trust comes in here and--sorry, I have got to stop 
being so mean. Let's back up a little.
  When we come in here and we talk about our desires, we are going to 
balance the budget in 10 years, incredibly noble. Absolutely necessary. 
But $1 trillion of that shortfall is interest. We have got to pay our 
debts. We have got to pay the interest on our borrowing.
  $1 trillion is mostly--it is a tiny bit of Medicaid, but mostly it is 
Medicare.
  What are you going to do, not pay for medical expenses?
  I am going to walk you through some solutions, and then I am going to 
spend the next few weeks coming behind this microphone every week we 
are here and trying to give solutions. There are solutions. I have got 
to get us all to think differently.
  You need an economy that is growing at a breakneck speed. You have 
got to grow the size of the economy because that grows tax receipts, it 
grows participation in the economy, it grows Social Security. And then 
we need to change the single biggest component in debt--healthcare 
costs. That is the punch line I am going to show over and over and over 
and over and over.
  The shortfall in Medicare is 75 percent of the next 30 years' 
shortfall. And it is $114 trillion. It is going to be reset. We are 
going to get new CBO numbers in a couple weeks, and I would bet you it 
is closer to $120 trillion, $130 trillion in today's valuation, so 
constant dollars. We are going to add 75 percent of that which is just 
the shortfall in Medicare.
  The brain trust here keeps saying: Well, let's do ObamaCare. 
ObamaCare was a financing deal. It is to subsidize this group, make 
this group pay. We are sinners, too, on my side. Those of us on the 
conservative side, we tried coming up--now, it was a much more 
efficient and much better distribution, but it still was a financing 
solution: Make this side pay and this side will be subsidized. Medicare 
for All is just a financing bill. None of those things change what we 
pay. If we don't change the structural costs, the future is pretty 
dark.
  So, look, you are poorer today than you were a year ago, even 
according to Jason Furman. You are poorer than you were 2 years ago, 3 
years ago.
  How do we fix it?
  First, I am going to give you a little bit more of how deep the 
problem is. I would have done this chart differently, but we were doing 
this in a rush because we were trying to do updated numbers. Why this 
is important is productivity growth is crashing.
  You all remember your high school economics class?
  What are the two things that functionally are your paycheck? The rise 
in your paycheck is functionally two things: It is inflation--well, 
that doesn't get you anything. When you get a bigger paycheck for 
inflation, you are just trying to keep up. The second thing is 
productivity. You get paid more because you got better, faster, more 
efficient, more expert at what you do, or the capital equipment you are 
making something on, or you are using made you more productive.
  We saw after the 2017 tax reform, and one of the dirty little secrets 
is much of that economic boom we got and those tax revenues that came 
with it was from expensing. It wasn't the individual tax cuts, though 
we loved that, but it was because businesses, organizations were 
incentivized to buy the best, fastest, most efficient piece of 
equipment because you needed to do that to be able to compete.
  Expensing is a timing effect. This may be a little geeky, but let's 
say you go out and buy a piece of equipment, and you make widgets. 
Remember, we all talked about widgets. You get to depreciate it over 7 
years. We changed the tax law so now you get to depreciate it this 
year. It is still depreciation, it is just a timing effect, whether you 
depreciate it over 7 years off your taxes or you take it off in this 
year. It is a timing effect on when we get the taxes.
  The elegance of the expensing side was I bought the capital 
equipment, and I got more productive. Two years later, my competitors 
are doing the same thing. I need to buy the next piece of capital 
equipment. Now I need to buy the next piece of capital equipment. If 
you look at it on a horizon of time, it makes the entire economy, the 
entire society healthier, wealthier, more productive. By doing that, 
you actually get tax revenue growth.
  Think of that, you get tax revenue growth over the horizon because 
you let businesses say, I made a capital investment to become more 
effective, more productive, and over the horizon we end up with a 
bigger economy, meaning  we have more tax receipts.

  Why wouldn't we stop the reductions that are happening right now in 
expensing?
  Because when you look at this chart, you realize, we have got a 
productivity crisis. We have flatlined.
  A few years ago, you know, we were running a point and a half 
productivity growth, meaning every year we basically got about 1.8 
percent more productive than the year before. Then we hit the 1980s and 
through the mid-2000s, and we were less than 1 percent productivity 
growth. Real problem.
  We are falling below 0.6 percent productivity growth since 2010. The 
only spike we had is that time after the December 2017 tax reform where 
suddenly, for that little time before COVID, we saw that investment in 
capital goods. If we could have just kept it going. But we went through 
the pandemic, and now this year there is no more 100 percent expensing. 
Now, I think you get to expense 80 percent, next year it is 60 percent. 
It goes down. We are going to lose that tool that incentivized that 
capital equipment.
  Why that is important, I will do this in the coming weeks. The 
demographics of the United States is the primary driver of future debt.
  Remember, I was talking healthcare?
  It is also one of our greatest headwinds in productivity.
  If we are getting older as a society, we have got to figure out how 
to encourage our older populations, would you be willing to stay in the 
labor force? What incentives can we do?
  We have this freakish thing that I can't figure out, males under 35 
aren't entering the labor force as they should, and we can see it in 
our productivity numbers. We have got to deal with the reality, and a 
lot of this makes people unhappy when I do these presentations, but it 
is the math.
  So once again, let's go back to why this is important. This chart now 
is almost 2 years old. We are going to get an update in a couple weeks; 
and I promise you, it will be uglier. This is a combination of CBO 
numbers, and I think this one even--yeah, this one is CBO and I think 
it even had some OMB, and others on it. Punch line, we are functionally 
going to borrow $114 trillion from today through the next 30 years.
  If you are a young person, we are about to destroy your economic 
future. Look at the gray hair. I have a 7-month-old boy we are 
adopting. When my 7-month-old boy is 25 years old, his tax rate will 
have to be double--double--what I pay, just to maintain baseline, and 
that is because of this.
  Medicare has an $80.5 trillion deficit over the next 30 years, 
shortfall.
  We do Social Security over here. Just assuming that 10 years from 
now, if anyone bothers to look at even the CBO update from just a few 
days ago, in 10 years, because they moved up the date because the COLA 
actually took away a year of actuarial life, you have got a 23 percent 
cut. If you read it, every year the cut gets a little bigger because 
the demographic mismatch because Social Security exists on today's 
receipts.
  So is this place also ready to allow senior poverty to double in the 
country? That is what this is talking about.
  But yet I was so angry last week when I came behind the microphone--I 
am trying not to curse here--because the left and the press were 
saying: Republicans are talking about cutting Social Security.
  No. We are talking about trying to find some way to save it.
  Do you understand? You can't pretend the math isn't there because the 
math will win.

[[Page H568]]

  Does anyone care? This is the math.
  In 10 years, according to CBO from just a couple days ago, Grandma is 
going to take a 23 percent cut in her check, and year after year it is 
going to get bigger unless we do something big.
  Now, you look at Social Security, up until last week I was the senior 
Republican over Social Security, so I am pretty good at the math. We 
have one actuarial dataset that if you do the 75-year life, which is 
how you actually look at Social Security, it is like $500 trillion 
short over the 75-year window. It is more than the wealth of the world.
  Every day we don't do something here because it is politically 
distasteful because you are going to walk out the door and the press is 
going to run up to you and say, well, Democrats are saying a rumor that 
you Republicans intend to cut it.
  We are trying to find a way to save it. You have weaponized it.
  Then you want to know why this place runs away from the issue?
  This is one of the things where if we don't hold hands and jump off 
the cliff together, you have just screwed over grandma and everyone 
else heading toward retirement.

  These numbers aren't fake. This is your future.
  Then I got up here last week. And I want to double-check; there was 
someone very smart. I do look at most of the comments. This one has had 
300,000 views on YouTube since last week. Thank you for those who are 
insane enough to watch this because a year ago I would have like 12 
people, and I couldn't even get my family to look at this stuff.
  When we look at all--this is for the average, the couple that pays 
into Social Security, they will pay in over a lifetime--so let's just 
use, I think it is based on, the 40-quarter formula--about $625,000. 
You are going to get back about $698,000, and that is in constant 
dollars, so you get a little spiff.
  You would make a hell of a lot more money if 20 or 30 years ago we 
had allowed workers to take a little sliver of their Social Security 
and put it in the market, you would have been much wealthier, but that 
became a political war. Remember, AARP and the Democrats beat the crap 
out of President Bush for even talking about it.
  The question we had on YouTube was, is this both sides? Is this the 
employer contribution and the worker's contribution?
  Yes, it is both sides. When we look at these numbers it is the total 
in. Social Security, you get back most of your money.
  The folks on there who say, well, for Social Security and Medicare, 
just give me back my money, and I will be happy, we would take that 
deal as a government in a moment. We will give you back every dime if 
you promise never to take another dime of Social Security and Medicare.
  Here is the punch line: On Medicare, remember three-quarters of 
Medicare comes out of the general fund. The tax portion of your FICA is 
just the little portion we call Medicare part A. It is hospital and 
some doctor there.

                              {time}  1945

  So the average couple will only pay about $161,000 in a lifetime. 
That is someone who is retiring right now; $161,000 in Medicare taxes, 
and they are going to take out 522. See the 1-to-5 ratio? This right 
here is the primary driver of U.S. sovereign debt over the next 30 
years. It is healthcare costs.
  How many Members of Congress are stupid enough to get behind this 
microphone and tell the truth? But it is the truth. It is the math. And 
you can't pretend.
  And you read the comments and you want to just reach out and say, I 
know the political classes lied to you for years but you have got to 
stop living in the lunacy world.
  Well, get rid of salaries for Members of Congress.
  Okay. It pays for 28 minutes of an entire years' worth of borrowing.
  What would you like to do with the rest of the year?
  Well, let's get rid of foreign aid.
  Okay. You just got rid of a couple weeks of borrowing for an entire 
year.
  People don't see the scales. It is hard to do 14 zeros in your head, 
but we have been trying to put this together, even all sorts of the 
Democrat proposals.
  Well, go to a 70 percent tax rate. Great, we took care of another 6 
weeks of borrowing.
  The political class has been unwilling to tell the truth. Republicans 
get up: Oh, well, we will get rid of waste and fraud and foreign aid.
  The Democrats: Well, rich people don't pay enough taxes.
  You lay them all out, you don't get near the borrowing. And 
understand, the borrowing doubles in 10 years because of the structural 
deficit driven mostly by what I was showing there. And you start to 
look at the math. This is all the entitlements. Yes, there is other 
crap that are mandatory spending. These are earned entitlements. You 
earned it. You worked a certain amount of quarters. You hit a certain 
age.
  You see the chart. It is everything. These over here, this is Federal 
retirement. This is veterans benefits. Those are also earned.
  We call them mandatory because it is a fixed formula but you can't 
pretend this isn't real. What scares me also on this--I know this chart 
is almost unreadable--we mapped out the Congressional Budget Office's 
modeling. And it would just show you they are almost overly optimistic 
all the time, that the numbers historically come in much worse than the 
models we get, because it is hard to predict the next pandemic, the 
next recession, the next war. So be careful, because often the 
Congressional budget numbers we get, are the best-case scenario.
  Now, I am just going to do this really quickly. If I came to you 
right now and said, okay, healthcare is the vast majority of all future 
debt. Change the price of healthcare. Well, the moral thing is legalize 
technology, legalize the type of technology where you can take care of 
yourself, but it also cures.
  There are amazingly wonderful things happening. And I am going to do 
more of this over the coming weeks. The optimism that, if we would 
actually understand, instead of just moving the pieces around on the 
table, Oh, we will cut this but we will shift it to the State. We will 
cut this, and we will shift this to the individual. That is not a cut. 
The spending stays the same as the size of the economy.
  There is a reason you didn't go to Blockbuster Video last weekend. 
There was a technology revolution. You no longer get that silver disk. 
You hit a button at home.
  We are on the edge right now of curing stunning numbers of cancers. 
What would happen in healthcare when you start to see that, when you 
actually start to see ideas like this?
  Not too far from here, I think it is 60, 70 miles, there is a co-op 
going up here in Virginia that is going to make eight types of off-
patent insulin, and they are going to do it less than the subsidized 
price than the Democrats passed last year. As a matter of fact, what 
the Democrats did almost screwed up the co-op's model.
  How do we encourage more competition? If you want to crash the price 
of pharmaceuticals, get everyone and their cousin making 
pharmaceuticals.
  Remember, the vast majority of drugs you and I consume of 
pharmaceuticals are off-patent. Humira is off-patent; the most 
expensive drug in our society. We are waiting for that competition to 
come in to start to crash that price.
  The other things that are happening around us, when we start to see 
early Phase 1's, that there are paths that are having remarkable 
opportunities to cure our brothers and sisters. I have come here and 
done entire presentations on the stem cell CRISPR treatment for 
diabetes. I am going to end on this:
  Diabetes is 33 percent of all healthcare spending. It is 31 percent 
of all Medicare spending.
  I know it is hard. I know it means changing. The six people cured 
right now are on type 1. Type 2 is difficult. It has some real societal 
implications and would be the most moral, compassionate thing we could 
do as brothers and sisters here, to put the resources in. And maybe a 
decade from now you could crash the deficit by curing our brothers and 
sisters and changing their lives.
  Mr. Speaker, I yield back the balance of my time.

                          ____________________