[Congressional Record Volume 171, Number 54 (Tuesday, March 25, 2025)]
[House]
[Pages H1267-H1270]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TELL THE TRUTH ABOUT MATH
(Under the Speaker's announced policy of January 3, 2025, Mr.
Schweikert of Arizona was recognized for 60 minutes as the designee of
the majority leader.)
Mr. SCHWEIKERT. Mr. Speaker, this one is going to be a little thick,
so put on your economics hat, and let's have a ride here.
On Friday, the Congressional Budget Office responded to a request I
made in my capacity as chairman of the Joint Economic Committee. I was
trying to get an answer to whether the economists' projections from the
Joint Economic Committee are correct. You have to understand that there
is actually a weird little battle going on here between the Senate and
those of us in the House and those of us on Ways and Means.
A number of our brothers and sisters over in the house of lords have
decided that we have current tax policy from the 2017 TCJA, the tax
reform, which I was on the committee and was one of the people who
helped author that, but they expire at the end of this year. They want
to play this game and say that we are just going to pretend that there
is no cost, that the law is not the law, that the policy is the law.
This is when you hear people say, current policy baseline, just do it.
We have been trying to do the math. The Congressional Budget Office,
a couple of months ago, actually did a projection saying that if we
want to maximize economic growth over the next 10 years, what you do is
extend those tax cuts but pay for them. The basic idea is that by
paying for them, you don't have government gobbling up the capital
stack that is used to finance growth, to finance business, to finance
when you want to buy a truck or a new home or your business wants to
expand.
We got an updated letter from the Congressional Budget Office.
Apparently, it didn't make me particularly popular with a few people,
which actually provides me a perverse joy. If you read it, in the 30-
year window, it looks like if we do all this without an attempt to pay
for, if we drive up interest rates by 1 percent, in the 30-year window,
it looks like you break CBO's budgetary model because you hit 250
percent of debt to GDP.
If I am reading one of the paragraphs here correctly, they are
basically saying our computer model doesn't go beyond 250 percent. The
point is, you have a government that--here is our baseline. Let's see
if I can make this make sense. At the end of this fiscal year, $37.2
trillion is going to be the country's debt. Over the next 10 years, we
are expected to borrow an additional $22 trillion.
On top of that, if you play with these folks that say we don't really
need to pay for things, just keep it going, that is about another $5
trillion, $5.5 trillion, another $1.3 trillion in interest. Then, if we
were to be able to make the President's wish list without finding
offsets or modernizations--and I am going to walk through a whole
series of things where it is not cuts. It is modernization, legalizing
the technology that disrupts the costs that makes our society better,
happier, more efficient. If you were to do all those things without an
attempt to pay for them, without an attempt to adopt policy to
modernize the way we deliver services, in the previous 240 years, we
borrowed about $28 trillion from the public. That is from investors
around the world, from your pension system, from everything. It would
mean, over the next 10 years, it pretty much would double. We are going
to double it or come close to doubling it in the next 10 years.
That is the perversity of what you have going on around here, yet the
people coming behind these microphones keep having a wish list and want
more stuff and more stuff. The people walking through our hallways here
are in our offices demanding more stuff. They want more carve-outs in
the tax code, barriers to entry to their competition, or just another
check.
I am going to walk through just how dangerous the game we are playing
right now is because when you look at these charts--this is online.
Just go on CBO from last Friday and read it for yourself. It is not a
hard read. Why are my brothers and sisters so terrified to tell the
truth to the public?
You have a country--I am going to show the charts--that in about 7.5
years, we have more deaths than births. You have a country that when we
get out of the extraordinary measures--remember, right now, we are
borrowing from our different funds because we are up against the debt
ceiling. We may be borrowing almost $70,000 every second of every day.
[[Page H1268]]
For those of you who turn to me and say, ``David, I demand you
balance the budget,'' I can do it tomorrow. Let's see, if I use the
2024 numbers, for every dollar we took in tax collections, we spent
$1.39. Tell me the 39 cents of the government you want me to cut.
The problem with that math is, when you look at the charts, do you
see what is in blue? That is everything a Member of Congress gets to
vote on, defense and nondefense. Your only problem is that it is 26
percent of the spending.
If you ask a Member of Congress right now to balance the budget, we
can do it. We can do it. You have to get rid of all defense, all
nondefense discretionary. That is basically the Park Service, the EPA,
all the agencies, and then tell me what portion--because you have to
pay your interest or you blow up the world economy--tell me what
portion of Social Security, Medicare, Medicaid, and other things you
want to hack away at.
The reality of it is, in this fiscal year, our projection is up till
the recent--now, we are starting to downgrade our growth. For every
dollar we take in tax collections, we are going to spend, functionally,
$1.36.
Do you understand how screwed--actually, that is a technical,
economic term--we are when we don't tell the truth about the math? It
is not fixable, but it is possible to stabilize. We can stabilize this.
We just have to think and do things that are hard.
So often around here, the thinking part is complex, and it is hard
when we have to go home and tell our constituents the truth about math.
Remember, the math will win. How many of you have heard about people
out protesting? They are terrified there are going to be cuts. Okay,
let's actually have a moment of truth about math.
This was baseline. Over the next 10 years, we were going to spend $86
trillion. Next 10 years, CBO baseline, we are going to spend $86
trillion. The reconciliation budget had--what?--$1.3 trillion in cuts,
and if we got lucky and did everything, you might get to $2 trillion.
So, we are talking about $2 trillion in cuts over 10 years on $86
trillion of spending.
That is what the left over here is losing their minds over because
they need something. They have lost the working middle class. They have
lost so many American voters because they no longer trust them because
they have spent decades not telling them the truth about the math.
It is not hard, except the problem is 30 percent of that is borrowed.
People are losing their minds that we are trying to cut $2 trillion on
$86 trillion of spending. That is what this place has become. This
place has become a clown show of math.
Once again, I need to disclose I have had a stunning amount of coffee
today, so forgive me if I am a bit cranky.
We were trying to do projections of what our interest coverage would
be this year. Let's see if I can make this make sense.
How many of you saw on Thursday or Friday that the Federal Reserve
actually lowered economic growth for this year and, functionally, for
the next 3 years? They lowered us down to 1.7, I think. Just that
lowering, if you do the math on the back of an envelope, it is not that
hard. It is just a little less than $200 billion of loss of tax
receipts. If you plug that into our committed spending, it basically
means what we are going to have to borrow--you may have interest this
year of $1.1 trillion and a borrow this year when the economy is fairly
good of $2.2 trillion. One of my folks has a number that it is up to
2.3, but let's stick with the $2.2 trillion of borrowing in a year when
the economy is good.
Think about this. We are functionally going to spend about $7
trillion this fiscal year. We are going to take in about $5 trillion,
and this is in a time when the economy is good. We are not in a
pandemic. We are not in a war. We are not in a recession.
Understand that when you take some of these charts of interest
exposure into the future--there is one of my charts that shows, in 9
budget years, interest, just interest, is over $2 trillion a year.
{time} 1715
Why aren't we running around terrified here? I mean, if you care
about your retirement--or someone that is crazy, like my wife and me,
we are older parents. I have a 2\1/2\ year old and a 9-year-old. You do
realize for my 2\1/2\ year old, when he turns 23, 24, or 25, every tax
in the United States has to have been doubled just to maintain baseline
services. This is the morality of this place.
Look, the last slide I am going to pound on, it is called interest
fragility. We had Ray Dalio in one of our offices. Those of you who
don't know him, please look him up. He is the Bridgewater CEO, founder.
I think he has now stepped down from that. It is the biggest hedge fund
in America. He happens to have 50 years of being one of the hyper-
experts on interest rate markets and debt markets. He was saying: You
guys are screwed. You guys have a really interesting problem.
The United States and other countries are borrowing, bingeing on
debt. The United States borrows about 40 percent of all the world
capital that goes into sovereign loans. His argument is: Our problem
is, there are not enough savings in the world. We are consuming more
money; it is us, China, Europe. Now Germany is going into the debt
markets as they are raising their spending caps.
What happens in the world when there is a shortage of borrowable
money? Remember, every day when we borrow at $6 billion a day that debt
has to be sold. Most of it is actually financed domestically, it is in
this pension, it is in this bank. And then there are the foreigners,
except the foreigners have been lowering their U.S. debt because they
are having to finance their own governments.
You start to look at our interest payments, and there is this concept
called a term premium. When we make the bond markets nervous, we pay
higher interest rates. So the clown show will go around and say: Well,
let's just not pay our debts. Hey, we are up against the debt ceiling.
Let's just not raise it.
Okay. Fine. I mean, enjoy your decade of world depression because
when you collapse the U.S. currency, you also collapse the world.
Stability is our goal. Stability is how you minimize interest rates. If
you are financing $37 trillion and another $22 trillion, plus whatever
else we are going to stack on top of that over the next decade, you
really want the debt markets to think we are acting like adults.
In many ways, when you look at these charts and you see our interest
coverage and how fragile we are, the bond market basically may be the
greatest influence on this government.
However, how many people have you seen come behind these microphones
and talk about debt?
Yet, the one thing we are not allowed to tell our voters, our public,
our staff, each other, is the truth about what drives debt. Over the
next 10 years, almost 100 percent of U.S. sovereign debt issued will be
to cover interest and Medicare.
In 7\1/2\, let's call it 8 years, the Social Security trust fund is
empty. That first year we have to make a decision, are we going to let
the poverty of seniors double when they get a 21 percent cut in their
checks? Or how much are we going to raise taxes?
Are we actually going to do something complex to fix the system and
make all the adjustments and those things?
Except the moment you actually talk about saving Social Security,
they have a consultant on the Democratic side writing an attack ad
because they care so much more about winning the next election than the
morality of not doubling senior poverty.
The brain trust runs around and says: Oh, just raise the cap. Okay.
Except you just covered 38 percent of the shortfall. What do you want
to do with the rest?
Mr. Speaker, 38 percent of the shortfall is our math, meaning that
first year--so if the trust fund of Social Security is empty in 2033,
2034 the full year, I think $608 billion was our estimate on that first
year.
Think about that. Think about that scale. Then you hold up a chart
like this. This is CBO's number for the next 30 years. Nondefense and
defense discretionary actually have a positive balance, meaning they
grow slower than tax receipts. Medicare and Social Security create $124
trillion of debt during those 30 years.
It is not Democrat. It is not Republican. It is just demographics. We
have
[[Page H1269]]
a saying in our office: debt, deficits, and demographics. Deal with the
facts. Deal with the math. Tell the truth.
This place has been so busy spinning stories, though. We were
listening to the Democrats a few minutes ago tell stories: There is an
enemy out there. No, these things, we can fix them. We can stabilize
it. However, so many care so much more about winning the next election.
The point I am trying to make is: You look at the next 10 years,
okay, there is growth. Mr. Speaker, 24 percent of the growth in
spending over the next 10 years is interest, 31 percent of the growth
in spending over the next 10 years is Social Security and disability,
28 percent of the growth in spending over the next 10 years is
Medicare, other mandatory and discretionary grows about 13 percent, but
a portion of that is actually, I think, defense and other things in
that. The fact of the matter is your government is an insurance company
with an army.
Now, here is the other part that makes doing the math so incredibly
difficult. Every year there are fewer workers, fewer working-aged
people to support our older population. This really seems to upset
people, but understand, look at our fertility, look at our demographic
charts.
Go back to 1990, the year we started to roll over. There is a dataset
out there--I don't believe it yet; I haven't had the chance to try to
prove it--saying even last year we may have had more deaths than
births. Okay. You want us to finance pay-as-you-go systems, which is
Social Security and Medicare, at a time when we have a shortage of
young people. There is a way to make it work.
Are you going to allow people like me, people who are here willing to
think to be able to refine the process, to modernize?
Look, we will try to touch on this if I have time. Here is the MedPAC
report from last week. A whole bunch of apparently really smart people
examined Medicare and walked up and down through the growth in spending
and what we could do to modernize it and use technology to stabilize
the prices. On some things, particularly on Medicare Advantage, they
have hundreds of billions of dollars in here that wouldn't require
cutting any service, any access to healthcare. It is just using
technology and modernizing.
You have got to understand, when we start to look at a chart like
this, we are functionally here. Let's call it 2024. We have 2.9 in the
population--there is another chart that is going to scare you even
more--for every one person receiving benefits. Then you see, it gets
down to 2 people in society.
I am going to bounce around just a little bit on some of these.
When you actually look at the Social Security trustees' data,
something is happening out there where some of these numbers may be
much worse than we expected because it turns out people actually are
taking retirement earlier than we expected, meaning the participation
in the labor force is actually starting to get soft on the high-skill
populations, higher income population.
Actually we had a debate on this one about how upset this would make
people. Here we are, we are going to start the 2026 budget year. We are
actually supposed to be working on that budget. Without immigration,
working-aged people will start to disappear from the labor force. You
go: Huh? Huh?
Basically, 2026 is the last year where the age population is
functionally stable. Then the next year you start to actually fall in
your numbers of working-aged people in the population. It is
demographics. It is not Republican or Democrat, it is just math.
One more chart of this, and then I am going to give you the one that
scares me the most. This is Social Security and disability benefits.
Here we functionally are, and let's get about to where we are. Right
now if you add both those programs together, you have 2.67 workers for
every beneficiary. At one point, it gets all the way down to just a
little over two people working for every beneficiary.
If you actually do the big chart, which is how many people are
actually in the labor force compared to how many people are receiving
benefits. Remember, I am not talking about changing people's benefits.
I am talking about dealing with the reality of our demographics and
ways we can deal with it, particularly when we start talking about
healthcare.
Let's take a look at 2023. Functionally, for every 100 people we had
working in America, we probably had 36, 37 people receiving benefits.
Remember, the whole concept of labor force participation. I have done
presentations here about, functionally, the 7 million--that was my old
number--of prime-age males that are missing from the labor force.
What do we do as a society to make it possible to encourage our
brothers and sisters who are not working to actually get into the labor
force? Yet, my colleagues on the left say: Oh, you are going to have
work requirements. You can't do that.
If you don't do it, tell me how I make these numbers actually work.
That is some of the miserable stuff. Let's actually sort of walk
through how I make it work. Okay?
I have come here and done a presentation showing that if this is our
demographics, we are going to have to be willing to have a brutally
honest conversation.
Let me walk through a concept. Back in the 1970s and 1980s, what was
the world conflict? It was for hydrocarbons, oil. The previous decade,
much of the world conflicts were for rare earth materials. I will
argue, we are in a decade right now where the conflict is for smart
people, people with skill sets. Yet the United States has barely shown
up for the battle.
When you hear President Trump talk about the insanity that we educate
people and then send them home to compete with us, the President is
absolutely right.
We have a whole presentation we have done here showing a talent-
based, a STEM-based immigration system that turns out to be remarkably
beneficial for tax receipts, for economic growth, and for prosperity.
It turns out you need that as one of an entire unified theory of things
to do.
I want to walk through just a handful of quirky things. When you hear
people talk about DOGE and how upset they are, one of the primary
things that is being discussed is that the United States has a handful
of huge databases. The problem is, they don't talk to each other.
You saw the story last week of, hey, we just looked at some of the
Social Security death files. The oldest person in America is, what, 114
years old? We took people over 114 years old and then wondered how they
were getting loans at the Small Business Administration.
Forgive my math. I am doing this from memory from last week. There
were like 3,300 people who were over 114 years old who got SBA loans.
Mr. Speaker, $300 million in loans. Can you believe not a dollar has
been paid back?
What would happen if there was a way to eliminate waste and fraud
without an army of auditors, without an army of bureaucrats? It turns
out it is technology. You actually have to start having your data talk
to each other. Is it really that scary? The government already has the
data. Why can't they bounce against each other saying, hey, this person
is on the death file. Maybe they are not actually applying for a Small
Business Administration loan.
{time} 1730
Mr. Speaker, some of our Democrat colleagues remark that, oh, waste
and fraud doesn't really exist except for the billions of dollars we
are identifying.
Let's walk through a couple of other frustrating things. We provided
$42.5 billion for the Broadband Equity, Access, and Deployment program.
Stick with me on this one. We have spent over $42.5 billion to get
broadband to communities. Not a single community, not a single house
has been connected to that broadband; but we spent $42 billion doing
it.
Between Christmas and the new year, I took my little girl out on the
Navajo Reservation. For those of my colleagues who are not from the
Southwest, the Navajo Reservation is immense. It is bigger than many
States.
We chased around, and we met with a number of people who said they
were tired of waiting. They weren't going to wait another decade to get
that wire or that fiber, whatever it was, to their chapter or to their
community so they could get broadband. They were doing something crazy.
They ordered a satellite dish, and 48 hours later they had broadband.
They were sharing it with
[[Page H1270]]
WiFi repeaters. For a few hundred dollars, they were fixing something
that was going to take another decade and how many hundreds of millions
of dollars.
Think about adopting technology. Is the morality that we want to
spend lots of money to actually subsidize these people who should be
running wire; or do we actually want these communities to have
telehealth, tele-schools, and tele-monitoring of their lives to help
them? Adopt the technology. Make it so it is actually useable. Instead
of saying we will never get that wire out to our rural communities, put
up a satellite dish.
Why does this scare people? It is because there is no good lobbyist
running around here saying: Have ever thought about doing this? What we
do is archaic.
Another example is millions of taxpayers call the IRS for help. Two-
thirds don't reach anyone. Think of this. The auditors of the IRS last
year put out a report that only 31 percent of phone calls were getting
answered at the IRS.
Folks are trying to fill out a tax form and give the government
money. They call and call and can't get the phone answered. There was a
little pilot program done. It was an experiment. Let's actually do a
chat, like a ChatGPT, that picks up the phone 24 hours a day, will stay
on the phone as long as the caller needs, will help them fill out the
tax forms, will actually email or text the PDF of the form, and maybe
even send the YouTube video on how to fill out the form.
Why does this scare the hell out of the IRS? It is because the IRS is
the second most unionized bureaucracy in the Federal Government. It
turns out the union loses its mind when we start talking about
technology to take care of the American people. Wouldn't we like to
pick up the phone and call, whether it be the Social Security
Administration or the IRS, and get the phone answered?
How do I get my brothers and sisters here to help us adopt this
technology? I have a handful of articles here using AI to functionally
crash parts of the cost of delivering healthcare. Here is one about
actually making the environment much cleaner, much faster, much
cheaper, and actually identifying bad acts with almost no bureaucracy.
Here we have ability to fix our logistics.
We live in a time of miracles. When we start to say just our
baseline, just a couple of the pieces of legislation we have, we think
we can get $100 billion a year just using technology and healthcare.
How about another $100 billion to $150 billion to actually step into
supply chains and these others? With the adoption of technology, we can
crash parts of the price of this government. Is that a cut? Is that a
chain saw? It is just doing things that aren't scary.
Mr. Chairman, the last one I will talk about is in the MedPAC report.
The majority of Medicare recipients in America now use Medicare
Advantage. For those of us in the Scottsdale-Phoenix area, we actually
have a much higher penetration.
According to the report and even with the adjustment of the portion
of the population that only takes the Medicare part A, which is the
hospital portion, the trust fund, and which also runs out in 12 or 13
years, it is 20 percent more expensive than fee-for-service.
If we take it back to the fact that when Medicare Advantage was
designed and it was supposed to come in at 95 percent of fee-for-
service, do that delta. That is approaching $100 billion a year.
Mr. Speaker, what if we got together--and we have been working on
this for months and months--and we said we need to align the incentives
with the insurance providers, with the healthcare providers, and with
the person receiving the benefits. How about if we make the profit by
helping the population be healthier?
A capitated model or something of that nature, which actually I think
a capitated model makes the most sense, is here is our cost; and we
make more money by helping our population be healthier than what is
happening today, according to this report, saying we sign the public up
and then we spend lots of time and resources to score them as sicker
and sicker because we get spiffs the sicker we score them.
Is that a cut? In today's world, when we know diabetes is 31 percent
of all Medicare spending, let's get the incentives aligned so it cuts
the cost, cuts the debt, but we end up with a healthier country.
There are solutions here. The problem is it requires doing difficult
things and thinking. I beg my brothers and sisters. Let's go do the
hard stuff. If you have ideas, bring them to us. We are working our
hearts out right now on everything from technology to auditing the
Pentagon because we had our eighth or ninth year where the Pentagon was
not auditable. We are trying to design a talent-based immigration
system that maximizes economic growth from tax receipts for the
country.
How about saving Medicare Advantage for everyone who loves it but in
a way where it also will provide hundreds of billions of dollars of
savings? We can do this. We can do this. We just have to do hard
things.
Mr. Speaker, I yield back the balance of my time.
____________________