[Congressional Record Volume 169, Number 202 (Thursday, December 7, 2023)]
[House]
[Pages H6734-H6737]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MATH ALWAYS EVENTUALLY WINS
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 9, 2023, the gentleman from Arizona (Mr. Schweikert) is
recognized for the remainder of the hour as the designee of the
majority leader.
Mr. SCHWEIKERT. Mr. Speaker, thank you for your patience as we get
ourselves set up here.
Mr. Speaker, I obviously try to do this every week we are here, and
my goal is not to sound like some idiot economics professor. I am
trying to point out the biggest thing that is ahead of us, the reason
we are here, and the hardest thing we talk about.
I want to start off by saying that, apparently, I hurt some people's
feelings in the last two floor speeches when I walked through the math,
and I don't care. The math is the math, and the math will win. The math
always eventually wins. This is substantially a math-free zone.
Another thing I want to point out for some of the folks who end up
watching a video of this and they get cranky that there is no one in
the House. That is actually the way it is supposed to be. They are
supposed to be off in their committees or other places working.
This is our chance to talk to the body. Please understand that we are
on hundreds and hundreds and hundreds of televisions right now talking
to staff. The reason I show up with these charts is trying to see if
you can breakthrough and understand just the scale of what is going on.
Remember, we have a debt and demographics issue, and that is the
thing that just enrages me. If you are on the left, you say we don't
tax enough. If you are on the right, we can't cut enough, which I am
more on the cut side; however, you still got a mathematical problem.
I will show you in some of the slides that you can get rid of every
dime of Defense and every dime of discretionary and you are still
borrowing hundreds of billions of dollars.
Last year, we borrowed 8.4 percent of the economy. Ever hear these
discussions about having a 2 percent GDP growth? Okay. Fine. That is
what long-run projection is. We borrowed 8.4. That is just the
borrowing, not the spend. That is what we borrowed.
It is also one of the reasons we have tried now not to talk in
percentages of GDP because no one has any idea what the hell you are
talking about.
Mr. Speaker, let's actually have some fun here. We are going to
actually try to break this up in two or three different presentations
over the next couple weeks.
Today, I am just going to relay out the math, see if any of it still
sinks through. Then next week, we are going to try something that we
haven't done in a few months. We are going to come in with optimism
that the breakthroughs in healthcare, the breakthroughs in
technologies, the opportunities that are out there will help us bend
the debt curve.
{time} 1230
Once again, I am going to go back to a sentence I had a couple
moments ago, for those who will text my office, call my office, fuss at
me when I am in Costco and say, ``David, I want you to balance the
budget this year.'' I can do it. You just have to be willing to let me
get rid of all of defense, all of discretionary, and $300 or $400
billion of your Medicare. That is how upside-down the numbers are.
Let's walk through some of this. We are two-plus months into this
fiscal year, and the number one spend this fiscal year will be Social
Security. Now, let's talk about this for a moment.
Social Security is its own trust fund, its own funding mechanism.
None of the money is spent in the general fund; it is loaned to the
general fund. Social Security gets these special Treasury notes, and
then they are paid interest twice a year. If you ever geek out and you
are someone who watches U.S. debt and all of a sudden there is this
sudden spike, often that is actually because we made our twice-a-year
interest payment to Social Security, but it is separate.
You have also got to understand the flip side of that. In 8 or 9
years, when the Social Security trust fund is empty, it doesn't have a
claim on the general fund, either.
CBO put out a number of 2033. The Social Security actuaries, which I
think are a year behind in their reports, had projected 2034. However,
let's use CBO's number. CBO projects that a 25 percent cut in your
check is coming in 8\1/2\, 9 years.
For the average couple in America on Social Security, I think that is
like a $17,400 cut. We will double poverty in the senior population in
America. Okay. It is immoral, and the solution we get is, okay, just
raise these taxes, do the cap.
Now, we are still working on the math because it turns out Tax
Foundation, the actuaries, and CBO have vastly different modeling
numbers. We found a couple interesting nuggets, the Democrat bill does
cut benefits, it cuts benefits on high-income earners where they told
us they would never cut benefits.
We are starting to realize rhetoric is often different than reality
when you are trying to make the math work.
Hopefully, in the next couple of weeks we will actually have nailed
down the actual impact, but right now it looks like raising the cap on
Social Security, doing these other mechanisms still does not close that
$616 billion shortfall. That is a $616 billion shortfall. That is the
very first year the Social Security trust fund is gone.
Why this isn't talked about constantly here, when defense is like
$830 billion, and just the shortfall in a single year in Social
Security is over $600 billion, does anyone see the scale we are talking
about?
Understand, if we use the tax solutions, where you say we are just
going to raise these taxes, we are going to take everyone over $400,000
or just everyone, and you are going to pay the extra 12.4 percent, and
then we are going to tax some of these unrealized capital gains and
these things to make up that difference. Okay. If that is the Democrat
solution, you have just used up your entire opportunity because there
is no more money.
What do you do with the other two-thirds of the borrowing, which is
the shortfall in Medicare? You have no more capacity. We are going to
walk through that.
Why this board here is so important to understand is: in 2024, Social
Security will be $1.450 trillion this year, so $1 trillion, $450
billion. Social Security is our number one spend.
Gross interest, that means the interest we pay to Social Security but
also the interest we pay to whoever has been willing to buy one of our
bonds, is over a trillion dollars this year. Interest now is number
two. Interest is now number two this fiscal year. That wasn't supposed
to happen for like 8, 10 years, and it happened.
Number three is Medicare.
[[Page H6735]]
Number four on our spend is defense.
When you have someone who runs around saying, Cut defense, that is
where all our spending is, they are either willfully ignorant or they
are just out of date, they are just so out of date.
Demographics is the driver of our debt, and it is so hard to talk
about that because for one thing, it is not Republican or Democrat. Us
becoming gray hairs, it is not Republican or Democrat, it is math. The
solutions may ultimately be partisan, but what we are as a society
isn't.
I am going to be much more gentle because I have someone behind me,
so I am not going to throw the boards. That was also one of the
complaints.
One more time, the exact thing I just said, but I made it into a bar
chart because the bar chart is much easier to see, particularly on the
television. This is our Social Security. This is interest.
Now, if you say, David, it is not fair to use gross interest because
we are paying ourselves. We are not paying ourselves; we are paying the
trust fund. Remember, we just talked about Social Security being its
own. If you want to conflate the two, then you are sort of breaking the
wall, but God bless you.
If you just go to net interest, it is still right there as the second
biggest expense we have in the Federal Government this year, and then
you have Medicare, and defense now is number four.
Why does this matter? The number of folks who live in this sort of
mathematical fantasy world--and just skip 1965, you can see, but do you
see this red here? This is last year's spend. Seventy-three percent of
the Federal Government's spending was on autopilot, we don't get to
vote on it. You get elected to Congress; you do not vote on 73 percent
of all the spending because it is formula.
You worked your 40 quarters; you got Social Security. You hit a
certain age and participate; you get your Medicare. You are part of a
certain tribal group, you get this. These are things that are formulas.
You fall below a certain income, you get these.
Defense was 13 percent of our spending last year. Well, defense is
really tricky. Yes, we need modernization. Maybe some of the large
weapon platforms need a revolution in technology, those things. That is
fine. However, the fighting you hear, the fighting that ultimately
removed the Speaker, the things that go on here are over this little
green wedge here that is 15 percent, 15 percent.
The punch line you need to just burn into your mind, all of this
green is borrowed, all this blue is borrowed, and last year about $400
billion of the red was borrowed. Everything a Member of Congress votes
on is borrowed money. Sink that in. Everything we vote on is on
borrowed money.
The frustrating thing is we have absolute battles here on the floor
and in our committees, trying to save a little here, trying to save a
little there. Fine, we should do it. One of the reasons the approps
bills are taking so long is we are breaking them down line item by line
item, saying, does this make sense? But stop pretending that at the end
of 10 years you will even notice those differences. They won't even
show up as rounding errors because we are borrowing.
This is really important to me and forgive me if it is slightly
narcissistic. I don't mean it to be. We are trying to find some way to
communicate math.
We started something in our office a couple of weeks ago where you
can go to our official website, and you can sign up. Just give me your
name and your cell number, and every day we are going to text you--and
I know this is really exciting--what the day's borrowing was and what
the day's tax receipts were. We are going to do it two ways, so we are
doing it absolutely intellectually honest. We are going to give you a
364-day clock, so no timing effects because you know Treasury, at the
end of the fiscal year plays some game where they roll some of the
spending into the next year. There are all these timing effects.
Following that, we give you the actual fiscal year.
Mr. Speaker, I won't ask you to actually answer this because I am
actually not supposed to have the dialogue with you, but it is always
fun to point at you.
What would you guess we are borrowing per second, a per second
borrow? I think as of yesterday, because we printed this a couple days
ago, we were at $78,480 per second.
You can sign up on our website and get this wonderful text message
sent to you every day with the actual facts, not the made-up crap that
goes on here. The number of times I hear people speaking behind these
microphones, and you are pulling out your calculator and wondering,
where did they come up with that? They just make things up because
these numbers are so difficult.
If you actually do so far this fiscal year--and it will change as tax
collections come in--we are over $112,000 per second in borrowing; and
of that $78,000 we are borrowing right now per second over the last 364
days, $30,000 to $35,000 of that now is interest.
It gets worse because a lot of the bonds we sold over the last couple
years--because we are idiots--we sold short on the curve, so we had
incredibly low interest rates, and now those bonds are going to have to
be refinanced at these higher interest rates.
I am going to put this chart back. We are just trying to help people
understand. Interest is one of our great fragilities. What that means
is, what happens when Congress is no longer in charge of the Federal
budget, but the bond market is? The bond market gets cranky.
Look, 3 weeks ago we had a 30-year bond auction--I appreciate the
chairman of the Ways and Means Committee letting me take my
subcommittee, and we brought in some of the bond market experts. The
hearing, once again, denigrated back into Republican-Democrat talking
points, which frustrated me because we were supposed to have a serious
conversation.
Three weeks ago, we had a 30-year bond auction where the broker-
dealers, the market makers had to take 24 percent of it. Now, everybody
that is listening, you just went, huh?
What happens when there are so few buyers or there is so much
inventory that has to be sold that the broker-dealers don't have enough
credit line to take it all down?
Does that become a failed bond auction?
Do we start to see stress in the world bond market?
Remember, the entire world uses our bonds as the oil, the liquidity
that keeps financial markets working here and around the world, our
mortgages, everything else.
Intellectually, I don't think we understand the serious nature of
what a chart like this tells you when you start looking at gross
interest just marching along, and then this is functionally the last 12
months, so you had some of the lower interest rates in the beginning of
2023. Remember, interest rates didn't really start to move until April
last year, and this is showing, just in the last 12 months, we
functionally added $923 billion in financing costs on those interest
rates. This year it is going to be over a trillion.
Then you come over here, and you start looking at things like net
interest. Net interest is ultimately going up, gross interest is
starting to--the two lines are meeting. Why?
Because the trust funds are getting smaller and smaller because they
are shrinking. Remember, the transportation trust fund is gone in a few
years. Medicare part A, the hospital portion, is gone in 7 years,
Social Security is gone in 8\1/2\, 9 years. You have got to understand
that also has an effect on our borrowing because we can't borrow
internally.
I don't think you need to see this board because I have said it like
six times, we are borrowing $1 trillion gross interest this year.
This one is important. I feel like an idiot, I feel like I am the
only one coming up here and screaming about this. It is like,
Schweikert stop telling us things we don't want, there is math
involved.
What was the movie, there was a joke, or is it Chevy Chase on
``Saturday Night Live,'' 30 years ago I was promised there would be no
math?
This chart is very, very simple. We have done an estimate with the
Joint Economic economists that we are going to bring this fiscal year
$9.6 trillion to the bond market. About $2 trillion of that will be
what we call virgin, that is new borrowing to cover our shortfall
because about 30 percent of everything we spend is on borrowed money.
The rest is being refinanced.
[[Page H6736]]
You go, what do we care, it is refinancing?
We are now refinancing at much higher interest rates. If we are
blessed, you know, 10 years, a little over 4, but that thing used to be
at 0.6, 0.7. That gap is why we estimate--and so does Treasury, so does
OMB--that we are going to spend over a trillion dollars in interest,
and now it is our second biggest expense. It just continues.
{time} 1245
How do you think about this? We actually had 2 months last year--now,
this is timing effects when tax receipts come in and those things--
where we were borrowing to make our interest payments.
Think about that. We were borrowing to be able to pay for our
borrowing. Does anyone care? Is it just too complicated? This is the
reality.
Yet, if you ever listen to us, and, in particular, my brothers and
sisters on the left, they will be behind this microphone saying, if we
just tax rich people, we will be fine. Let's keep spending.
These are major components of the 2023 Federal budget. I am not going
to walk you through all the line items, but here is the basic point.
If you break it out per household, last year, our spending was over
$48,000 a household. Okay. Receipts, that means tax collections,
everything, you know, from excise taxes to income taxes, capital gains,
all of them.
We spent $48,000 per household last year. We took in $33,800. Anyone
see a problem? Structurally, this gets uglier every year, uglier the
next year, uglier the next year.
It is not because of mandatory spending. It is not because we are
spending more money on foreign aid or spending more money on this and
that. It is demographics.
I can show you slides, and I am going to show a couple of these. It
is always the ones I get the most angry emails about.
Mr. Speaker, 100 percent of the spending from today through the next
30 years, 100 percent, according to the CBO--and if anyone has ever
read the CBO reports--Medicare and its interest for its shortfall.
Remember, its cash shortfall is I think $88 trillion over those 30
years and Social Security, if we choose to backfill it, in 9 years when
the trust fund is gone.
It is functionally healthcare and if we choose to backfill Social
Security. So Medicare--healthcare, is the primary driver. It is 70-plus
percent of all future borrowing.
The brain trust here, we will come behind these microphones, and we
talk about financing it. ObamaCare is a financing bill. The ACA is a
financing bill, who gets subsidized and who has to pay.
Let's be honest. Our Republican alternative was a financing bill. It
is who had to pay and who got subsidized.
Medicare for all is a financing bill. None of it is about the
adoption of technology that makes people healthier.
I have come behind this microphone a handful of times this year and
showed the data from the Joint Economic Committee, the Republican
report, go to Chapter 3, and we did some very difficult things, and
they worked very hard.
I vetted this for weeks. We did the thing we hate to talk about, but
it is amazing, the numbers. We talked about diabetes and obesity in
America.
What would happen if I could come to you right now and say the most
powerful thing you could do to roll down U.S. sovereign debt is take on
obesity in America? The morality.
It is also one of the most powerful things you can do for income
inequality, for my Tribal populations, for the rural poor, for the
urban poor.
We actually had some other crazy data talking about the labor force
participation that would go up and family formation.
Is that Republican or Democrat? It is just moral. It is a solution.
It was a few trillion dollars over the 10 years--the single most
powerful thing you could do.
How many people have you had come behind these microphones and want
to talk about we need to help our brothers and sisters live? We are
about to have a fifth year of life expectancy falling in America. Our
brothers and sisters are dying.
If you look at the data, drugs are right up there. Obesity is even
higher. Is it just because you are going to get nasty people saying
horrible things about you on social media? Well, screw them. Morality
is on our side. It is great economics. It is also the right thing to
do, and it is really hard around here.
Let's actually talk about one of the other things. If I get one more
leftist, well, you guys supported tax reform. Okay. The single biggest
movement in closing income inequality, single biggest movement in
raising wages without raising inflation because it allocated money.
Smartly designed tax reform actually puts the money where it gets the
greatest amount of productive growth.
Remember your basic high school economics class. What are the two
ways you get paid more? Inflation. Well, that doesn't get you anything.
When your check goes up for inflation, you are just treading water.
Productivity. We had stagnant productivity for a couple decades. We
did tax reform at the very end of 2017, and we had 2018, 2019, the
first quarter of 2020 before the pandemic, and it was the ultimate
Goldilocks because we were growing. Wages were going up. The poor were
getting less poor. We didn't set off inflation. Income inequality is
shrinking.
The Democrats keep saying, well, the face cost of that was going to
be $1.7 trillion. Yes, we were taking in dramatically more tax receipts
than we ever expected, and it actually added a whole bunch to the life
expectancy of Social Security. Stunning amounts of money came back
repatriated from overseas, but it was a tax cut.
The same brain trust on the left who is attacking tax reform forgets
in just 20 months, President Biden's initiatives have added $4.8
trillion to the 10-year deficit.
They come at us hard. We did tax reform, and the face value of that
was $1.7 trillion, but they have added $4.8 trillion, and it is like
they forget.
This also set off--the best economists--I want to be honest on this--
set off half of inflation. Some of it was supply chain. Half of it was
the amount of stimulus the Democrats dumped into the economy.
I have done it here on the floor showing that the 30 months of
inflation we just had was the single biggest modern tax hike. Whether
you know it or not, you have been crushed.
If you live in the Phoenix-Scottsdale market, and you are not making
22, 23 percent more today than you did 30 months ago, you are poorer.
The brilliance of the left's not liking inflation but not screaming
about it or trying to crush it because there are things we could have
done in this body to help roll down inflation, but it would have
required policy, and it would have required them to admit it was
crushing the working population, particularly the working poor, and the
dirty little secret is it changed the debt to GDP because inflation
devalues the existing debt. You get to pay it back with inflated
dollars.
Whether you know it or not, you are about 20 percent poorer today
than you were 30 months ago. If your paycheck hasn't gone up, if you
are in the Phoenix-Scottsdale area, if you haven't gone up about 22
percent, you are poorer today. It is math.
We keep coming back to the understanding of the scale of the drivers
of our debt. I am not going to belabor this board. I have done it
before.
We can get rid of every dime of discretionary. There is no defense.
There is no State Department. There is no Supreme Court. There is no
Congress. That might actually be a good thing, but there is nothing.
You are still borrowing. Even at the end of 10 years, you are still
borrowing.
To help you understand the scale--and this one I have done entire
presentations on, and this is the one where I get the most interesting
comments from Democrats.
Well, we need to tax people over $400,000 more. Okay. Dirty, fun
little secret. If you made $400,000 4 years ago, 3 years ago, today
your purchasing power is probably 320, 328.
Part of the scam here is let inflation run a bit. You have heard of
bracket creep; same sort of concept. There is a great paper out there.
It is on the Manhattan Institute's, Brian Riedl, where
[[Page H6737]]
he basically took all sorts of studies, leftist studies, OMB studies,
CBO studies, and said, Mr. Speaker, what would happen if you basically
maximized every tax rate, if you took people over $400,000 and said, I
am going to maximize their income tax?
There are formulas now because we have really good modeling for this.
We can get them up to this tax rate before it changes their economic
effects, and the revenues actually go down.
Maximize their capital gains. Maximize their estate tax. Maximize
everything. Adjust for the economic effects.
If you don't believe me, go read the paper. You will get about 1.1 to
2 percent of GDP in new tax receipts. Okay.
Let's split the difference. Let's call it 1.6 of new taxes by
maximizing every tax rate of those over 400,000. Okay.
The reality is the majority of the people that make over $400,000
vote for Democrats anyway, so I don't know why we keep trying to say,
but the economics are theater.
Back to the point when we began. What did we borrow last year? Anyone
listen? We borrowed 8.4 percent of GDP--8.4.
The Democrats' solution covers 1.6 of it. When they do that, the
capacity we need to be able to cover the shortfalls in Social Security,
Medicare, if there is a disaster, if there is a war--we have no more
capacity. This is how fragile we are as a society and intellectually
vacuous, the debate here is.
Mr. Speaker, how much time is remaining?
The SPEAKER pro tempore. The gentleman from Arizona has 9 minutes
remaining.
Mr. SCHWEIKERT. Mr. Speaker, I will try to wrap this up in the next
couple boards so the gentleman from Texas can have his time.
This is pretty much the same thing. We actually did the modelling on
the permanent deficit, its interest carrying costs. That is what is
over here in whatever earth tones that is.
One of the things I have heard the Progressive Caucus talk about,
there is some absurd thing called the oligarch's tax where they are
going to find really rich people, and the richer they are, they are
just going to take portions of their unearned income or their assets.
Okay. Fine.
I guess that is where the left's brain is, but you have to stop lying
to people about the math. It only covers a tiny fraction of the
borrowing.
Part of this even comes from one of the progressive group's own math.
It is revenge for people who made a bunch of money, who vote for them
and contribute to them, and then they make up the math.
This is such an absurd place. Look. Maybe no one actually cares. I
have come here in the past and sort of showed the trajectory we are on
to the amount of our economy that will be in debt, and we are already
right here.
Remember, this is a chart that if you actually start to do the
baseline, and you start to actually do different baseline annual
growths--you have to understand, in less than a decade, if our annual
growth does not exceed the mean, meaning we only grow at a half a
percent over those years, we are already at 125 percent debt to GDP.
Now, because we are the reserve currency, we get a little bit of a
SPIF for more capacity, but basically you have to understand the
number.
The time for doing something was actually a couple years ago. Every
day we wait, the policy options--and this is going to be part of my
closing, and I am going to say it two or three times.
The policy options close because there are things you need to do
policywise. If you look at all the taxes the left wants to do--I just
showed you a slide--it comes in about 1.5, 1.6 percent of GDP. We
borrowed 8.4 last year.
The things we can cut. I can get you a couple of points of GDP we can
cut, and I am willing to do some very difficult cuts.
Is it rational for us to borrow money on our nondefense discretionary
and send it to States and jurisdictions that have their own taxing
authority? We are basically playing a game of here is some free money
that we are borrowing. Well, that is $300 billion of the discretionary,
but that is a fraction of the GDP.
The two ends here, that means the actual structural deficit that is
actually from the demographics, you need a revolution in the costs. You
can't tax enough, and you can't cut enough. It is math.
{time} 1300
Once again, another model out there that shows once you do the actual
economic effects of taxing the rich, it gets you only a fraction of the
10-year deficit.
I am going to close on this board because it is the board that
enrages most people. It is the one that has been modeled by left
groups, right groups, some of the honest universities, back to the
point I have made. This board is already a year out of date, meaning
when it says over the next 30 years, we will have $116 trillion in
borrowed money, we have a model in our office that is approaching $130
trillion with the higher interest rates.
On this one, $77 trillion of that shortfall over the next 30 years is
Medicare. It is healthcare costs.
Another one is a $38 trillion shortfall if we backfill Social
Security and the shortfall there.
It is immoral what this body is doing by avoiding, and every day that
we avoid, you find yourself saying taxes are your only opportunity,
though I have just spent the last half an hour trying to explain policy
is where the money is at.
Making people healthier is the single-biggest thing you can do to
reduce the U.S. debt. Actually, you reduce it but stabilize it because
we are going to continue to grow it because we are getting old, and our
healthcare costs are going to go up.
Can we use technology? Can we use cures? I could come to you tomorrow
and point out the simple fact that 33 percent of all healthcare
spending is diabetes. A revolution in our brothers and sisters with
diabetes, which we know how to do it now--we actually have
pharmaceuticals that are remarkable, and I am not thrilled with talking
about pharmaceuticals, but the math is the math. We sometimes have to
deal with the reality in front of us.
If we can cut diabetes in half in America--let's see, 15 percent of
U.S. healthcare costs is about $700 billion a year. If you cut 33
percent and then get the economic effects of people being able to work
and other things, so a trillion dollars a year.
I mean, you start to understand this doesn't have to be dour. It
doesn't have to be dystopian. There is hope. It just requires thinking
and maybe owning a calculator and reading.
We are too busy saying the same crap to our voters because they
applaud for us. Even though it is 20 years out of date, we say the same
crap over and over.
I have been here 10 years. When I first got elected, 1 out of 8 was
65. Today, it is like 1 out of 5.8 is now 65. Demographics is our
destiny.
Why are we incapable of telling each other the truth?
Mr. Speaker, I yield back the balance of my time.
____________________