[Congressional Record Volume 169, Number 150 (Monday, September 18, 2023)]
[House]
[Pages H4375-H4378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DANGEROUS DEFICITS
The SPEAKER pro tempore (Mr. Ogles). Under the Speaker's announced
policy of January 9, 2023, the gentleman from Arizona (Mr. Schweikert)
is recognized for 60 minutes as the designee of the majority leader.
Mr. SCHWEIKERT. Mr. Speaker, for anyone out there who is insane
enough to have C-SPAN on, I may suggest requisitioning a life.
If you don't want someone to talk to you like an adult, if you don't
want someone doing big math, big numbers, and being serious, I am sure
there is a video out there of a parakeet playing a piano someplace.
Please leave now.
Today I was actually going to try to come here and do the happy,
positive talk. I actually had put together some boards on some really
good things that happened.
Then we made the mistake on my flight; the staff actually looked at
the trust funds that were collapsing over the next few years.
People forget. The Medicare trust fund is gone within 7 years. We
can't actually work out the math of how devastating that will be
because about 40 percent of all Medicare spent comes through that trust
fund. It is almost all the money that Medicare patients receive at the
hospital level.
I do have one happy slide, so we are going to do that one, and then
we are going to go on to the reality.
Let me sort of make a point. We are going to have the fight over the
continuing resolution or the budget or these things.
People are going to do their political posturing, and we are going to
fight and fight. Please understand. It is all important. It is rounding
of the rounding of the rounding errors of what is really going on.
You are going to see some slides here where you have got to
understand every dime we vote on as Members of Congress is now
borrowed--plus another $300 billion--and that is in this fiscal year.
It gets dramatically worse over the next few years.
If you actually somewhere in your head think: Well, if we just got
rid of waste and fraud and got rid of foreign aid, we would be fine.
Foreign aid is 12 days of borrowing.
Why is it so hard for this place to grow up and understand the most
basic parts of math? I went off track there. I apologize.
Let's go back. How many of you saw this article? These are happy
things. These are also things that are moral. They could make
incredible differences. They could also save billions and billions and
billions and billions of dollars.
I have been tracking the researchers on this, and I think it is the
University of Chicago. They had this crazy idea. We will give people a
vaccine to train their body to attack things.
How about if we gave a vaccine to train their body not to attack
things? If you think about it, multiple sclerosis is your body
attacking your nerve systems.
One of the reasons I am interested in it, we had a horrible, horrible
family tragedy in regards to multiple sclerosis when I was very, very
young.
It is the concept of sort of an inverse vaccine to take on autoimmune
diseases, and it turns out type 1 diabetes is an autoimmune disease.
I have been coming to the mike for years talking about the research
on being able to replant islet cells back into the body, either through
stem cells or the one that has been now FDA approved which actually is
islet cells that are bleached from cadavers and adjusted with CRISPR so
your body doesn't need antirejection drugs to know this concept of we
are just going to teach your body not to attack. This is a big deal.
There are some wonderful things happening.
Now, here is the really interesting question: Will we be so broke as
a country and a society that the ability to actually make the
investment to do what is moral actually lowers future borrowing?
Look. Today, we finally crossed the $33 trillion, and some people are
going to light their hair on fire. It is a big deal. It is about to get
dramatically worse. We are going to look back fondly on this number the
way we are going right now.
{time} 1945
Do understand we now have--and we don't bet money--but we do have a
little pool going with some of our staff and some of our economists of
what will the fiscal borrowing be this year.
Remember, the administration is trying to play some games where they
are going to try to credit themselves back some of the student loan
money that the Supreme Court said they can't spend, so we are actually
looking at the real-life borrowing number, not the fiscal deficit
number, which has a journal entry fraud in it.
As of a couple of hours ago so far this fiscal year--and we still
have a couple weeks left--I think we have borrowed $2.158 trillion.
Now, I don't want to win because I am the idiot who said we are going
to borrow $2.2 trillion. Please understand, a year ago, the
Congressional Budget Office, 2002 May, said, this year we would borrow
about $860 billion. Does something seem wrong in those numbers--$860
billion? Now it looks like we are going to borrow $2.2 trillion and
almost every dime of that growth is healthcare costs which have
exploded, particularly Medicare.
Tax receipts have fallen fairly dramatically. So much for this Biden
socialized economy. We have handed out a couple of trillion dollars of
money to build factories, to subsidize this and subsidize that. This
was actually their modern monetary policy. You now have proof in the
pudding. They set off inflation, and tax receipts have actually fallen.
If anyone wants to write an academic paper on modern monetary policy,
you have got the laboratory right in front of you. It collapsed.
What is the third thing that has actually gone against us this year?
Interest. The bond market has not been treating us kindly. We were
playing with some math the other day, maybe another additional, on top
of everything else, $160 billion of interest. Those are big numbers.
Almost no one can process that sort of math, but let's actually walk
through it in a way you can all understand.
If you look at the last 12 months, we borrowed over $72,000. We
borrowed, not spent, borrowed because we are borrowing about 30 percent
of all of our spending. We borrow about $72,000 a second, and $20,000 a
second is interest. Next year, my math--look, I am a little more dour
than some of the people around me, but my math has us closing in on
$800 billion of interest, just interest, next year.
I am going to show you a chart. Please pay attention. That is almost
all defense. There was a time this place would have been losing its
mind if I came to you and said interest next year will be pretty much
what we spend on defense. Oh, David, that could never happen.
How many times have you heard anyone come behind these microphones
showing any concern? Instead, we are going to do the theater on
rounding errors. I am going to stop another $50 million here. That is a
big deal. It is fine.
Did I mention we are borrowing over 72,000 a second? This is really
difficult math, and it is really uncomfortable.
Let's go back to my opening statement. If you are someone that
doesn't like hearing something that is uncomfortable, please go watch
something else.
What is the primary driver of U.S. sovereign debt? A bunch of it, at
least
[[Page H4376]]
the current cycle, is a bunch of stupid things the Democrats did last
year when they had power here. But no. Right now, today, and over the
next 30 years, what is the primary driver? It is our demographics.
We got old. We made lots of promises. They are moral promises, they
are commitments, and we don't have the cash for them. We don't have the
cash flow for them, and we are going to run out of the borrowing
capacity for them, but we are not allowed to talk about them because if
you talk about them, you will get unelected around here because it is
the see-no-evil thing.
We had a President stand behind that podium on the State of the Union
and say, you are not allowed to talk about Medicare and Social
Security, and everyone got up and applauded. That was immoral,
absolutely immoral. In 9 years, we double poverty in America.
Last week, I came here and was showing some stories of the number of
baby boomers who are in retirement living on the street and in that
article it talked about how many more by the end of this decade are
expected to be living on the street. This is retirement in America, and
in 9 years we cut the average couple's Social Security by $17,400. That
is the morality of this place, but you are not allowed to talk about it
because that is difficult.
For those who are not good at math, but like pie charts, let's do
this one. The entire discretionary budget--and this chart is a little
off because the actual fully appropriated discretionary budget was
$1.831 trillion, but we will use the $1.7 trillion because that is what
they printed.
You have got to understand: What you see in orange, Members of
Congress do not get to vote on. We should, but it was this politically
safe thing to make Social Security, make Medicare, make veterans'
benefits on a formula, they just happen. What we vote on is all of
defense and the rest of what you think of as government--the State
Department, the Supreme Court, our salaries. Every dime of that is
borrowed.
My point here is just simple: If you have about $1.7 trillion, $1.8
trillion, that is the entire discretionary budget, including defense,
and we are going to borrow $2.2 trillion this year. Every dime we vote
on is borrowed, plus about $300 billion.
We will have people here who have little temper tantrums over
rounding errors. Because these numbers are so difficult and so hard to
get your head around, we will do the theater because the theater
actually sells. Let's actually walk through how ugly some of this math
gets.
I have done entire presentations of this concept of interest rate
fragility. I just showed you that we crossed over the $33 trillion of
borrowing. About $27 trillion of that is what we call publicly
borrowed, the rest is actually transfers from trust funds.
The money that is in the Social Security trust fund gets borrowed by
the Treasury, Treasury gives them interest. We are going to pay $50,
$60 billion at the end of the month. It is our monthly interest that we
pay out to the trust funds through borrowing. That is why I think my
$2.2 trillion borrowing this year is correct. You forget about all the
other bonds that have to be refinanced.
If any of you like to watch markets, go grab your phone and go look
at what interest rates are right now on a U.S. 2 year. How about a U.S.
10 year?
You are at the very top of the range. You are seeing interest rates
that we have not seen in a dozen years and that is what we are going to
be refinancing, and here is the punch line: $9.6 trillion, $2 trillion
of that will be new issue, new borrowing, but the rest of that is what
we call refinancing. It is the bonds that come due.
When we are talking about these higher interest rates, it is not on
the new virgin borrowing; it is on almost $10 trillion of U.S.
sovereign debt that is coming to market.
There was this old adage that if I have a U.S. debt instrument that
when it comes due, I will just put it right back in. That is not what
happens.
Foreign governments start to roll out of U.S. sovereigns, but you
also see other people that say, look, I can go get this interest rate,
but now I can go buy corporate paper or I don't trust U.S. inflation, I
got to go put it some other place.
If you are bringing almost $10 trillion to market in 2024, is there a
chance of a stressed bond auction? Is there a chance of a spike? Sure,
there is.
Now, we have some games with the fed and the Treasury we can play to
gobble up an issuance, but the moment that happens, be prepared that
the interest rates we have today look charmingly quaint.
This is the reality. This is what we have done to ourselves, but we
are not allowed to talk about it because that requires math.
I sort of already gave this one away, but let's do it anyway. The
defense appropriation bill is about $830 billion and our best guess for
interest is $800 billion next year. Think about that. I just need you
to process.
Do you remember the old days when you would meet a liberal and the
first words are, just raise taxes on rich people and cut defense
spending; we will be fine. However, interest now is pretty much equal
to defense spending. Does anyone care? Will anyone talk about this?
Will anyone pay attention, or will we just go back to our theatrics
because there is no reporter that is going to write this? There is no
blogger out there paying any attention to it.
If you are selling clickbait on the internet, you are not going to do
any of this. This requires an intellect. This requires thinking. It may
even require a calculator. I have just grown so weary.
How do you save a society? Remember, the very first lie: There are
good things happening if we would embrace those things and run with it.
I have done entire presentations here week after week on showing if
you took on diabetes--I even came here and talked about things you are
not allowed to talk about. I took on obesity in America. Turns out it
is the single most powerful thing from a debt standpoint and economic
growth standpoint and morality standpoint of making your brothers and
sisters healthier or letting them be healthier.
A handful of academics were just thrilled to death that Schweikert is
willing to talk about this. Everyone else goes, yeah, but it didn't
make me angry. The political class around here on the left and the
right, we just sell having people be pissed off. Great. Did I mention
we are borrowing over $70,000 a second?
I do this almost every day with reporters. The working middle class
in this country have every right to be angry. It would be crazy if they
weren't. They are poorer today than they were a couple years ago. If
you live in my community, Scottsdale, Phoenix, and you are not making
20 percent more today than you were 2 years ago, you are poorer today.
This is what the left brought upon us, and when they go, oh, no, it
wasn't us; it was supply chains. Read your own academic papers. Even
the most moderate academic papers say about half the inflation came
from the excessive spending the Democrats engaged in, their insanely
named Inflation Reduction Act, and now the last several months is 100
percent the derivatives of their excessive spending. Read your own
literature. You might need a dictionary.
To my brothers and sisters on the left: Take responsibility for what
you did. You made people poorer and now you want to know why they are
angry. Next year every dime equal to defense will be borrowed. Does
that not set off any alarm bells?
Some of these next slides are just going to get geekier and geekier,
but they try to make a point. This isn't Schweikert math. We grabbed
these things from CBO and OMB and some of the academic institutions
because it has been shocking.
We spent hours and hours and hours today trying to work on the
Medicare trust fund, which is gone in 7 years. It is empty in 7 years.
You have to understand how hard it was just trying to find out where
that several hundred billion dollars that goes to hospitals, what is
the remaining cash flow able to cover if the trust fund is gone? We
will have to spend another week working on that. You think that would
pop. It is within 7 years.
We couldn't find any decent research that was walking us through the
math. That gives you an idea of how sick this place is. These aren't
little numbers. These are the types of things you plan decades for,
except we are not allowed to talk about things like that.
{time} 2000
Look, I have been trying once again to sort of show even the numbers
we
[[Page H4377]]
know today. I am not going to take a shot at CBO. CBO's job is to do
projections as they know it. But, darn it, they have been missing the
numbers.
First off, the interest rates we are at, we weren't supposed to be
here right now. Remember, we were all supposed to be in the economic
slowdown, interest rates were supposed to be falling, so we are even
doing some math just sort of showing things. Even in some of our worst
case scenarios, we are off by hundreds and hundreds and hundreds of
billions of dollars in additional interest if we start using these
current interest rates.
We did this one because this one is the simplest to understand. If
interest rates rise by 1 percent over the CBO projections--remember,
CBO has already missed the projections by I think it is 1-plus percent.
The fiscal year 10 years from now budget deficit will be about $500
billion more than we already expect.
Are you prepared in the 10-year window, so 9 budget years from now,
we will functionally have a $3.7 trillion deficit. That is 9 years from
now. This isn't a projection. This is pretty much where we are at. We
are at $3.7 trillion in 9 years because our brothers and sisters on the
left needed to spend lots and lots of cash, hand it out, buy their
votes, buy their industries, buy their love from corporate America,
which they did.
They set off inflation, and they won't admit it. They made people
poorer. Now they wonder why they are angry. Now we have to figure out
how to survive this.
Let's actually walk through some of the Democrats' solutions. How
about we use this one, even confiscating all income over $500,000, so
we will actually take--first off, the deficit number on here is
absolutely wrong, but this is an old chart. If you took one of the
Democrat proposals saying if you make $500,000, the next dollar is all
government. You pay your regular taxes, and then if you make over
$500,000, every dime over is government money. It is Federal Government
money, not your State and local. The Federal Government takes every
dime of it.
We are now actually seeing a deficit projection of a couple trillion
dollars next year. Taking every dime over $500,000 produces about $1.5
trillion. It wouldn't even come close to covering this year's deficit.
This is taking every dime over $500,000. Huh? I was told by Bernie
Sanders we would be fine.
I have done this dozens of times, so I am not going to belabor it. We
have actually--one of the real ways you would do this sort of math is
you do it by percentages of GDP. We did those, and we walked people
through showing that all the Democrat tax proposals of confiscating
money or doing something that is probably unconstitutional, we will
know probably this time next year, of taxing and confiscating
unrealized capital gains; you know, the oligarch taxes and those things
some of the hard left are pushing where you actually just say, well,
you have got a building, you have a family business, you owe us 8
percent of the business.
This is a chart, and this one is easy to find. Just go Google
Manhattan Institute, Brian Riedl. He has done all sorts of charts like
this where he just takes CBO numbers, OMB numbers, and makes them sort
of understandable. You see all the little tax ideas don't get you
anywhere close, but we can lie and pretend, right?
Let's do a little more of this. As you start to understand the
drivers of what is going on, remember, I told you one of the deep, dark
secrets we are not allowed to say, 100 percent of the borrowing that is
scheduled for today through the next 30 years, Medicare is 75 percent
of it, Social Security is 25 percent. That includes interest, so if you
want to throw interest in there, but that is rolled into those, the
financing of those programs. The rest of the budget is actually pretty
much flat.
When you look at charts like this--and you can find this one
everywhere; I think we have even put it up on our website--you start to
understand, when you start to see the explosion here, these three lines
are net interest, Medicare, and Social Security, and everything else
just lays flat or actually falls as a percentage of discretionary.
However, we are not allowed to talk about this because it doesn't fit
the narrative where the political class has not told the truth.
Let's be honest, those of us on the right, it is waste and fraud, it
is foreign aid, and then the Democrats are saying, rich people don't
pay enough. I am going to show some more rich people don't pay enough
slides and show you complete fraud in math.
Then there is the thing I am fixated on, and I am going to do more on
Social Security because I am not comfortable enough with my Medicare
numbers yet, but you have got to understand, highway trust fund, that
is gone in 3 or 4 more years. Okay. It is big, but it is not ginormous.
The Medicare trust fund, we have gone in 7 years. It is big, but it is
nothing compared to Social Security, which is gone in 9 years.
Did anyone notice something there? The three big trust funds are gone
within this 9-year window. How much discussion have you heard on how we
are going to recapitalize these? We have a moral obligation to keep
Social Security. We have a moral obligation to keep Medicare
functional. Anyone here talking about how to do it?
I have come behind this mic over and over and over walking through
how you could revolutionize the cost of healthcare. You have got to be
willing to legalize technology. It turns out that upsets people because
much of this is all about the money, but there are so many things we
can do. There are so many good things happening out there, it is just
will we allow the good things to come to us before we have got
ourselves in such a debt crisis that all we are doing is just paddling
to survive?
All right, let's do the thing that they train you the day after you
get elected, a bunch of really smart consultants sit down with you and
say, David, welcome to Congress. There is this thing called a third
rail. It has something to do with subways. I am from the desert. We
don't have subways. You are not allowed to talk about things like
Medicare and Social Security because they will run nasty ads about you,
and you will get unelected.
Therefore, let's tell the truth, let's talk about Social Security. In
9 years--it could be 8 years--this chart has a mistake on it; this is
2033, not 2034. In 2033, the Social Security trust fund is empty, and
that causes about a 25 percent cut to the average recipients in
America. This is 9 years away. That average cut will be $17,400, as we
had testimony in the Ways and Means Committee. That will double senior
poverty. Doubling of senior poverty is 9 years away.
I was here on the floor last week already showing you that because of
rents and other things and Bidenflation, you are already seeing the
number of baby boomers in retirement who are ending up homeless. This
is 9 years away, $616 billion.
When you show this to someone on the left, Well, David, if we would
just tax people over $400,000 a year and not give them any benefits,
but we make them pay the entire 12.4 percent FICA tax, we are going to
be fine. Then you do the math, and you realize they have never actually
put a calculator to that, have they? One more time, in 9 years, $616
billion is the shortfall. In 9 years, everyone is getting a 25 percent
cut.
Let's do the first suggestion given to us by our Democrat colleagues.
Just create a doughnut hole. You pay your FICA tax up to $160,200
today. It will go up with inflation over the next few years. You create
a doughnut hole, then people $400,000 and up, you get to pay the 12.4
percent tax from that to the sky's the limit, whatever you make, but
you get no benefits for it. It turns out our best estimate, we have to
work at these numbers to do this because for some reason no one wants
to actually put these on charts. Our math comes out to about $86
billion.
You remember the chart before, let's do this again. Sorry, but this
is important because almost no one ever wants to talk about this. Do
you see the $616 billion? That is the shortfall in 9 years. Take taxing
people the full FICA portion of Social Security at the 12.4 percent
produces $86 billion. Does anyone notice a math problem?
Let's do the hard left suggestion, David, we just need to get rid of
that Social Security cap. We will let them have benefits up to that
$160,200, but every dime above that still pays the 12.4 percent tax,
but you don't give them any benefits.
[[Page H4378]]
All right. So this is lifting the cap. I have had some of the most
arrogant leftists over and over say that solves the problem. Does it?
One more time. The shortfall in 9 years, our estimate is $616 billion.
Lifting the cap, our best estimate produces about $164.7 billion. You
get about 20 percent of it.
This is what the brain trust around here has as the solution. We are
going to force the Republicans to just lift the cap on Social Security
taxes, and we will be fine.
Really? Really? You have $420-some--$427, $428 billion, you are still
short. That is in the first year. That is in one year. You are still
doubling senior poverty at these numbers. This is the left's plan for
us?
Come on, people. This shouldn't be Republican or Democrat. We had a
President get behind that microphone and say we are not allowed to talk
about this.
Please understand, it is absolutely just abysmal that we are going to
spend the next couple weeks doing theatrics and fighting, and we will
scrape out some savings, but those savings are going to be tiny
compared to the scale of this sort of nuclear debt bomb.
This isn't way off in the future. This is no longer about your kids
and your grandkids. This is you. This is your retirement.
Let's actually do a couple other pieces of math that really upset
people, but it is math. Okay, we are going to do something called
expected present values. Why this is important is you have a lot of
folks who somehow believe that they have paid in stunning amounts of
money into Social Security and Medicare and they are getting cheated.
In some ways you actually are, but it may not be what you think.
What we are trying to show is lifetime taxes, lifetime benefits. The
blue here, or is that purple, is Social Security, Social Security.
Medicare and Medicare. On Social Security, the average couple, you get
every dime back plus about $72,000.
Now, remember, if 25 years ago when George Bush tried--and he was
absolutely nuked by the retirement--I have got to come up with a name
for the folks that basically want to nationalize retirement and the
Democrats. President Bush ran around saying could we just take a sliver
of it and allow people to have their own private account? Oh, you are
trying to privatize. Too late now. That window is long past.
You are going to put in several hundred thousand dollars into Social
Security through your taxes. This is an average couple who works their
40 quarters. You get about a $72,000 SPIF. It would be several times
more than that if over those working years you had been allowed to put
that 15 percent or so into a private account, but water under the
bridge. This is the left's brilliant economics.
Primary driver of debt, though, turns out this is the lifetime
Medicare taxes. It is about $200,000. We are still working on updating
the number, but our newest number is maybe just shy of $700,000 per
couple on the benefits they are going to get from Medicare.
Does someone see a problem? Average couple--remember, there are 76
million baby boomers--that couple will put in a couple hundred thousand
in Medicare, and they are probably getting close to $700,000 in
benefits. That gap right there is the primary driver of U.S. sovereign
debt. Almost no one will ever tell you that.
{time} 2015
Mr. Speaker, the reason I keep coming behind this microphone is I
truly believe there are people out there in the public that want to be
talked to like adults. Yes, some like getting the stimuli of having
someone say something angry and crazy, but that is not how you save the
Republic.
There are ways to stabilize this. There are ways for this to be
another ``American Century,'' but that clock is ticking on us. Do you
think we are going to recapitalize if the Medicare Trust Fund is how
many billion dollars of shortfall starting in 7 years? I just showed
you Social Security is 616 in the first year; transportation is also
gone in that time. Plus, we are heading into 3 trillion-dollar-year
deficits at the end of the decade. We are going to do 2.2 this year.
This is moving away from us very, very, very fast, and I do need
people out there to understand the difference between a million, a
billion, and a trillion. Play with your calculators to see how many
zeros are the difference. Don't let someone trying to get your vote
pander to you by making crap up if they are not being serious with you.
I will argue, this is the thing that destroys your Republic. This is
what will make you much less free. This is what will take your freedoms
from you, destroy your retirement, and heaven knows the misery we are
leaving to our kids.
Mr. Speaker, I yield back the balance of my time.
____________________