[Congressional Record Volume 169, Number 196 (Wednesday, November 29, 2023)]
[House]
[Pages H5979-H5981]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            THE SYSTEMIC THREAT TO THIS REPUBLIC IS THE MATH

  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, as I am getting myself organized here, I 
am going to try something tonight as a variance of something I have 
done now for years. I am going to try to walk through some of the math, 
but please understand to anyone who is insane enough to watch this, 
particularly to staff here on Capitol Hill, I am trying to treat people 
like adults.
  I am not spinning you. I am not going to give you the latest poll 
talking point. I am not going to give you magic math. This is a moment 
where we desperately need to understand the scale of the problems.
  Mr. Speaker, let's also please understand that the people you see 
come behind the microphones here on the floor--and there are a lot of 
issues. There are a lot of problems--but I will argue, though, the 
systemic threat to this republic is the math.
  First off, for anyone who actually doesn't have a life, I strongly 
encourage you to go to our office's website--I think it is Rep David--
and sign up for text messages. We call it the daily debt update. Every 
single day, 5 days a week, you will get a text message from me that 
says what we borrowed today per minute and the interest costs. I break 
it out per year. Then I also say what we borrowed so far this fiscal 
year.
  We give you 364-day clock, so we get rid of timing effects. Then I am 
going to show you what we have taken in, or what we call receipts. Some 
people call them tax revenues. That is wrong, technically. Government 
doesn't have revenues; we have tax receipts. We now have several 
hundred people who have signed up for this.
  The point is, if you got yesterday's text message, you would see we 
are borrowing about $78,000 a second.
  Now, try to explain to me there is not something horribly wrong. One 
of the points I am going to try to make here off these charts is the 
scale.
  Now, my brothers and sisters on the left basically turn to us and 
say, just tax rich people more. That will take care of it. They want to 
tax rich people more. They can read. It is their own economists who do 
these reports saying that that actually doesn't get you anywhere close 
to reality to deal with the gap, and I am going to show you their own 
numbers.
  Now, I need to throw some of my own side under the bus. A lot of my 
brothers and sisters here on the Republican side, we are going to say 
if you would just cut this portion of discretionary spending, that 
would make a big difference. No, it wouldn't.
  We were playing with some math--and it is not done yet because I 
haven't vetted it--that almost everything we have been debating here 
for the last 3 or 4 months, at the end of 10 years, it would basically 
be a rounding error. You would have trouble even seeing it.
  We were playing with one bit of math that in 10 years, we are 
functionally scheduled with these new interest rates, borrowing about 
$3.1 trillion in a single year and if all of our cuts actually happen, 
it might actually not be 3.1, it might just be 3.
  It is real money. I think we should still do it, but stop pretending 
that it is saving the Republic.
  Let's start from the beginning. Let me get my charts organized. This 
is important, and I am going to keep doing it till I start hearing 
fellow Members say this out-loud repeatedly.
  Let's ignore 1965, but do you see this here? This is last year's 
fiscal year--23 percent was on autopilot, mandatory, earned benefits. 
You turn 65, you have worked your 40 quarters, you get Social Security. 
You get Medicare. You might be part of a certain Tribal group that 
might be a contractual part of a treaty obligation. There are certain 
benefits you get out there that aren't earned if you fall under a 
certain income, but they are part of mandatory.
  We as Members of Congress don't get to vote on it. That is on 
autopilot purposely. It was the intention of the left to put it on 
autopilot so it just happens.
  Do you see the green? That is what you call nondefense discretionary. 
That is what you all think of as government. That is the FBI. That is 
the State Department. That is our salaries. That is the Supreme Court. 
That is everything.
  The blue, 13 percent of the budget is Defense. The punchline you need 
to understand is last year every dime of nondefense, that green part, 
was borrowed. Every dime of the blue part was borrowed. Plus, about 
$400 billion of the red part was borrowed. Every dime a Member of 
Congress votes on is borrowed money, plus a chunk of mandatory.
  If you said I am going to balance the budget, God bless you. First, 
you got to shut down all the Defense system. Defense Department is 
gone. You have to get rid of all of government and you have to figure 
out what $400 billion you have to remove from Medicare. That is the 
math. The math will win. The math is the truth, and we make crap up 
around here. You got to understand the scale.
  If someone tells you that we are not taxing rich people enough or 
someone will tell you it is foreign aid and waste and fraud. Fine. Then 
go after waste and fraud. We should be vicious on it, but don't pretend 
that it does anything. I think we did a calculation last year and 
foreign aid was like 7, 8, 9 days of borrowing.
  Remember, we are borrowing $6\1/2\ billion a day. That is several 
times more than most of what we have been debating here for months. I 
know it is great theater, but the math is the math.
  The point I am going to try to make in this presentation, if anyone 
is listening, is the left saying just tax rich people more, doesn't get 
you there. For my brothers and sisters--I am one of them--who want to 
reduce spending because government is too big--also doesn't get you 
there anymore.
  You are going to have to deal with policy. You are going to have to 
deal with policy ideas that make healthcare less expensive. You are 
going to have to deal with policy that makes it so it is something you 
want to stay in the labor force. You have to do things that not only 
reduce the cost of surviving in our society, but also make this economy 
grow, and those are policy. One thing we are almost incapable of doing 
here because it is complex and the armies of lobbyists in the hallways 
get upset because they don't want us messing with their current 
business model. Same thing with the bureaucracies. The bureaucracies 
here go to war with us when we say you could use technology to do that.

  Let's actually walk through last year's budget. This is real. Seven 
weeks ago, we closed the books on the 2023 fiscal year. We spent $6.371 
trillion. Tax receipts were only $4.436 trillion.
  Does anyone see a math problem?
  This is why it is important to understand those numbers.
  That means we borrowed 8.4 percent of the entire economy was borrowed 
just last year--8.4 percent of GDP was borrowed last year.
  In a couple slides here, I am going to show you that taxing the rich, 
the Democrat proposals when you actually adjust for its economic 
effects, you might get 1\1/2\, maybe 1.6, 1.7 percent of GDP, but you 
borrowed 8.4 percent of GDP last year.
  I know that sounds geeky, but the reason you often speak in 
percentage of GDP instead of dollar amount is because of the amount of 
inflation we have had.
  Remember, if you live in my area, I think I have the highest 
inflation in the continental United States. In the last 30 months if 
you are not making 22

[[Page H5980]]

percent more, you are poorer in the Phoenix-Scottsdale area. You want 
to know why the working middle class and the working poor are so 
cranky, because it is brutal out there for them.
  The economy is actually okay. We are seeing some uncomfortable signs 
of really slowing down, which worries me. If you get my daily debt 
update, you are going to see something is wrong on tax receipts. The 
FICA numbers are falling, and it looks like they are about 5 percent 
where they should be which should be an alarm bell that something is 
happening in the labor markets, but if you are from the Phoenix-
Scottsdale area and you haven't had about a 22 percent pay hike in the 
last 30 months, you are poorer today. Then you wonder why there is such 
stress out there in our society.
  If I came to you right now and said what is the number one spend in 
the United States Government? It is Social Security. This year we are 
going to spend about I think--well, I have it on the chart--$1.450 
trillion will go out in Social Security this year.
  The punchline on this slide is, I want you to understand gross 
interest. That is interest we paid to people that bought U.S. bonds. It 
is also the interest, when the Treasury borrows money out of Social 
Security, we pay it interest. Interest will be over $1 trillion this 
year.
  Interest in the United States this year is the second biggest spend. 
The third biggest spend is not Defense, it is actually Medicare now. 
The growth rate of Medicare and interest are the primary drivers of 
future spending.
  Then we will talk about how many people lie about what is happening 
in Social Security, but we will get to that.
  Defense is now the fourth. Defense is now number four. Every time you 
run into a leftist that goes just cut defense, could you remind them it 
is actually number four now on the hierarchy of spending.
  If I had shown you this chart a couple years ago, you would have 
thought I was out of my mind. It has happened. Gross interest this year 
will top $1 trillion and the net interest, which just means to outside 
bond holders, now is well over $800 billion.

                              {time}  1715

  You do realize that just the net interest, if you just want to play 
the game and say, well, I am not going to count interest we pay to 
borrow from our trust funds, the net interest is going to be more than 
defense.
  Why is this not our fixation? Why are there people who are terrified 
of a debt and deficit commission to actually tell the truth about the 
math?
  When I come to you and start saying $1 trillion is just interest, 
understand why that is so dangerous. This week, interest rates are down 
a bit. Three weeks ago, they were up. Our best guess is that this year 
looks like we are going to bring about $9.6 trillion to the bond 
market.
  This is going to be not borrowing internally. This is going to be 
issuing bonds out to whoever will buy them. We guess about $2 trillion 
will be virgin. We have excess spent this year, so we are going to have 
to issue $2 trillion of bonds to cover our excess spending. The rest of 
it is refinancing because the idiots--excuse me, that is not fair.
  There is a video of me, going all the way back to Secretary Lew, 
screaming: Interest rates are low. Go longer on the curve. Go longer on 
the curve. Sell 30-year bonds. Get us out on the curve. Lock in the 
low-interest rates.
  The arrogance of the Treasury: No, you don't know. You are a Member 
of Congress. You are an idiot. What do you know?
  Now, we are going to pay the price for it. We are getting our heads 
kicked in because of the short-term thinking that is Washington, D.C.
  What you see here in blue, that is refinancing. That is all the 30-
day paper, the notes, the bonds, much of which is coming due.
  You are going to bring $9.6 trillion to market at interest rates that 
are how many times higher than we would have financed 1 to 2 years ago? 
Welcome to our world. That is why this math is having such trouble.
  I just want to make a point. I will get behind these microphones and 
sometimes when there is a chance to do a colloquy with one of my 
Democrat colleagues, they will say, ``Well, you supported that 2017 tax 
reform, and it was going to cost $1.7 trillion.'' Then, we start to 
talk through that. ``But tax receipts went up dramatically in 2018, 
2019, first quarter of 2020. Income inequality shrank at its fastest in 
U.S. history.''
  It was in many ways the ultimate Goldilocks economy before the 
pandemic. We were having to rescore, rescore.
  Then, you will get, ``But you were going to spend $1.7 trillion. That 
is what you voted on whether or not more tax receipts came in.'' Okay, 
fine. In the first 2 years they ran around here, in the first 20 
months, they voted for $4.8 trillion of additional spending. Let's see, 
end of 2017, we did tax reform that grew the economy and made the 
United States competitive in the world. We shrank income inequality and 
had some of the greatest growth in income and wages without inflation. 
The tax receipts and revenues were coming in dramatically overprojected 
before the pandemic.
  Step up and be intellectually honest. In 20 months, they spent $4.8 
trillion of spending, and we are already finding it is rolling over 
already. Take a look at the tax receipts from the Treasury over the 
last couple of quarters. Even when you make the adjustments for the 
California declaration of emergency, there is something going wrong. 
This type of stimulus is not working. Keynesian economics is not 
working, for anyone who pays attention to that stuff.
  Let's go back once again to interest rate fragility. In 2022, 
interest was $475 billion. In 2023, interest was $569 billion. 
Remember, this projection was only from a couple of months ago. We were 
going to spend $805 billion. Now, it is almost $840 billion. If you do 
gross interest, it is over a trillion.
  If you see this chart, interest went up 38 percent last year in cost. 
I haven't done the math, but with the scale of the refinance, we think 
it is going to be up another 30, 40 percent in spend this year.
  Aren't you thrilled? This is the brain trust here. Our growth and 
spending is going to be healthcare costs and then interest. That is 
going to really help the economy.
  Once again, just to reinforce it, because I am finding if I don't say 
it over and over, there is almost this pathological avoidance of math 
and the truth around this place: Social Security, number one; interest, 
number two; Medicare, number three; defense, number four. I can't wait 
to see how many of our fellow Members and staff can repeat this.
  For a bit of the punchlines, my brothers and sisters on the left keep 
saying the solution to everything is we are going to tax people over 
$400,000. Let's pretend we all agree that is what we are going to do, 
that is how we are going to save Social Security. Remember, when you 
have a Member--and there are a couple of clowns around here holding up 
little whiteboards and doing these things saying Social Security 
doesn't add a dime to the debt and deficit. They are absolutely right 
that it doesn't--yet.
  I think it was some of the folks who are involved in AARP and those 
things who wrote letters to the editor over the last month saying to 
not blame Social Security for the debt. They are absolutely right. They 
are telling the truth, and I hope that is intellectually where they are 
at, that no money from Social Security should ever go into the general 
fund, but no general fund money should ever go into Social Security. Is 
that our deal?
  In 9 years, 2033--so that is like 8.5 fiscal years--there is a 25 
percent cut in Social Security checks. If you are the average couple in 
America, $17,400 is going to be your cut. We will double senior 
poverty. That is the moral imperative we are being given by the left. 
You can't talk about Social Security. When they do put something on 
paper, it doesn't come close to closing the gap.
  We are doing some scoring on a couple of the Social Security bills. I 
was going to bring the charts, but we are not done with the math yet. 
We think it might close 50 percent, 60 percent. However, the punchline 
is, you have to understand, if we do that, there is no more capacity.

  There is this concept if, let's say, you are a high-income earner and 
have done really well in life and are making over $400,000 a year, 
today, if you live in Connecticut, New York, or California, you are 
probably already paying

[[Page H5981]]

at a 50 percent tax rate. If Congress adds another 12.4 percent, which 
would be just Social Security on that, now you are at 62 percent.
  There is actually lots of great economic data that say if we take it 
beyond that, your incentive, you are going to say: ``Screw it. I am not 
working. I am going to cut back my hours. I am going to find other 
ways. I am just going to live off my savings, my investments.''
  If you do just pieces of these legislations, they actually take that 
$400,000 population and push them into the mid-60 percent of their 
income. Maybe that is the Democrats' plan, but they need to look at 
their own economic literature written by their own leftist economists 
that basically say when you get into that low, mid-60 percent tax rate, 
the revenues go down. It is called a tax maximization concept.
  There is a good paper out there if anyone wants to read it. It is 
probably about 3 months old. Brian Riedl, Manhattan Institute, 
basically took a series of economic papers and said, what is the 
highest capital gains tax you can do before it rolls over, the highest 
estate tax you can do before it rolls over, the highest income tax?
  It is a nice paper. It is a little long, but it is a really simple 
read. They add it up, saying take people over $400,000 and maximize 
every single one of their taxes. Let's do it. When you worked up all 
the numbers--go read it for yourself--and then do the economic effects 
because you will change the economy, you are going to get maybe 1.5 
percent, maybe 1.6 percent of GDP.
  It is from the U.S. Treasury, the Tax Policy Center, OMB, CBO. I 
mean, this isn't rightwing Republican math.
  Does anyone remember what we borrowed last year? 8.4 percent of GDP 
was borrowed last year. Tax maximization on over $400,000, let's say 
you get 1\1/2\ because that makes the math easy. Does anyone see the 
math problem?
  Social Security and Medicare, when you start to look at it over the 
next decade and a half, go out to 2040, the best projection is it is 
running about 5\1/2\ percent of GDP short of cash. Does anyone see the 
math problem? You get 1\1/2\ percent by taxing rich people. Fine. 
However, just the shortfall in Social Security and Medicare is over 
5\1/2\ percent of the economy.
  Come on, guys, stop lying. Stop making crap up. I know it is great 
politics. It is great wedges, but at some point, we have a moral 
obligation not to have the doubling of senior poverty. How many baby 
boomers are you willing to put on the street by making crap up on the 
math?
  For our own side, I know every time we mention Social Security, I 
will get ads beating me up at home. Go online in the Phoenix market 
right now, and there is probably already an ad up saying: Schweikert 
talked about Social Security. Beat him up.
  I am trying to save it. Chart after chart, the reality of the math.
  Take a look at Bernie Sanders' oligarch tax, which is taxing unearned 
capital gains, taxing the wealth. It graduates up so that if you are 
really rich, they take a big portion of your wealth. With everything, 
it gets you up to a little less than $4 trillion over 10 years. Great, 
except the shortfall is like $18 trillion, $19 trillion in that time.
  Great talking points. It gets you on MSNBC. You can say crazy things. 
No one is going to audit your math. Does anyone actually care about 
what is going on, or is it more important to win the next election?
  We go back and forth over and over. Taxing the rich wouldn't pay for 
the deficit in 2033. We have done the tax maximization, and this slide 
is actually already out of date. We went back several months ago. The 
projection was that we were going to be borrowing about $2.5 trillion 
in the 2033 year. Now, we think it is $3.1 trillion, and most of that 
change is just interest.
  If you tax the rich, as proposed by the President, it doesn't even 
get you $500 billion when you do the economic effects. If you are 
someone on the left side and your answer to everything is just tax the 
rich, grow up.
  I mean, it makes it really hard to say, ``Don't you care about the 
elderly? Don't you care about these programs? Don't you care?'' If you 
care, pay attention to the actual math.
  Understand, just Social Security spending, this was earned. We owe 
this. We have no idea how we are going to cover the shortfall because 
even 2100 and some of the other bills will raise a bunch of taxes. They 
still don't cover the shortfall, and you have taken away all the 
optionality that was going to be--that tax hike was going to be used to 
cover the shortfall of Medicare. It was going to cover the shortfall of 
everything else in government.
  At some point, you have hit the wall, and understand, Social Security 
last year went up 11 percent. Our model right now says it goes up 
slightly under 9 percent this year. When you start seeing double 
digits--9s, 7s, 8s--on a program that this year will be $1.45 trillion, 
you start talking real money, and you have a math problem.
  This is the slide that gets the most angry calls to my office, so 
let's do it because it happens to be accurate. As a matter of fact, it 
is already out of date, but this is the last official update. From 
today through the next 30 years, Medicare and Social Security are 
pretty much 100 percent of all borrowing. The last update was about 
$116 trillion in borrowing. If you add in today's interest rates, our 
numbers come up closer to $130 trillion. If you add in today's 
interest, our number is getting closer to $130 trillion of borrowing.

                              {time}  1730

  The discretionary part of the budget, because of its slower growth 
than tax receipts, is estimated to have almost $2 trillion to the 
positive over those 30 years.
  Medicare is $80.5 trillion when you add in the interest; cash 
shortfall. Social Security over the next 30 years is $35.8 trillion 
short.
  Shouldn't we fix these?
  Don't we have a moral obligation to keep our promises?
  Is the scam here--and, Mr. Speaker, this is the point of this floor 
time. I am trying to figure out a way to say, here is your policy 
split. The left wants tax hikes. The right--and I am one of them--wants 
spending cuts. You can maximize both of those, and it doesn't get you 
close.
  You have to do policy. Policy is hard. Policy requires thinking. 
Policy requires saying ``no'' to people that might contribute to you. 
Policy says, I need you to actually read something. There are things 
you can do.
  Mr. Speaker, may I inquire as to how much time is remaining.
  The SPEAKER pro tempore (Mr. Pfluger). The gentleman from Arizona has 
2 minutes remaining.
  Mr. SCHWEIKERT. Mr. Speaker, I will talk faster and not do all the 
boards.
  I have come to this mike how many times over the last few years and 
done things, saying, let's talk about the policy revolution.
  Cures are part of the solution: Cure disease, change technology, 
adopt things. If healthcare and interest are our fragilities, then do 
things to bend that cost of healthcare.
  I have come here and shown things where you could use technology to 
functionally, dramatically disrupt the cost of healthcare.
  We have come here and talked about things like this where you can 
blow into it. It is a breath biopsy. It is like having a medical lab 
home in your cabinet.
  Yes, we make things like that illegal because this place often is a 
protection racket. It is a protection racket for incumbent 
bureaucracies and business models.
  If we could disrupt the cost of so many things in our society, 
whether it be healthcare, whether it be the way we do regulation, you 
could actually set off GDP growth. You could lower the cost drivers of 
this government.
  By doing that, you lower the cost of the financing. You tell the bond 
markets how serious we are. Maybe they give us some love and credit on 
our interest rates.
  There is a path where this can work. You just need Members of 
Congress to deal with the reality. Tell the truth about the math.
  Mr. Speaker, I yield back the balance of my time.

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