[Congressional Record Volume 171, Number 75 (Tuesday, May 6, 2025)]
[House]
[Pages H1876-H1878]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                THE MATH

  (Under the Speaker's announced policy of January 3, 2025, Mr. 
Schweikert of Arizona was recognized for 30 minutes.)
  Mr. SCHWEIKERT. Mr. Speaker, I could almost hear the joy from my 
staff saying: Hey, it is only 30 minutes this time, not an hour.
  Mr. Speaker, I want to do just a handful of things. One of these days 
we are going to have not enough noise about the facts, the numbers, the 
data, the debt, those things that we can come in and sort of do our 
boards, our charts, on things that actually reduce spending and 
modernize.
  I do want to sort of start with this. We have spent time since last 
summer working on pieces of legislation. The Wall Street Journal series 
and the ProPublica series came out about the scale of bad acts that 
were happening in what we call Medicare part C, which is Medicare 
Advantage for most of us, which is now I think about 55 percent of the 
Medicare population. We have been working on that to sort of modernize 
it, and so for all the lobbyists who are making money trying to beat us 
up for trying to actually fix it, I will warn you that the legislation 
is almost done. We now have to work with the economists and others to 
score it. We have been stunned though that it continues. Even last 
Thursday, I think, there was another whole set of investigations or 
indictments announced.
  Let's get on to some of the math here. Mr. Speaker, I have come 
behind the microphone many times and talked about the scale of debt. We 
borrow about $72,000 per second. Our math next year, that goes up to 
about $82,000 borrowing per second. If you are a country that needs to 
borrow about $6 billion a day, we borrow about $6 billion a day, what 
happens in a world where you actually--the liquidity of the debt 
markets.
  I grabbed an article that was in one of my--I think it was in one of 
my bond publications because I have some weird reading habits. ``Japan 
prepared to use its role as America's largest creditor as leverage in 
Trump's trade talks.'' The point I want to make by reading that 
headline to everyone is: Japan now is our largest individual creditor 
country. When you have a country that has $900 billion, maybe a 
trillion dollars of U.S. sovereign debt, and you walk in the door and 
say: We want to renegotiate some of our trade pact with you or we want 
to build an actual trade pact with you, they look

[[Page H1877]]

at you and say: But we right now take those dollars that you send us 
because you have been buying our stuff, and we are buying your debt.
  The fact of the matter is if you are a country that is borrowing $6 
billion a day, does anyone understand the fragility, and I am going use 
that fancy word a couple of times, because also interest--we are 
actually seeing some indications that when we get out of extraordinary 
measures--for everyone who doesn't understand, we hit the debt ceiling 
a couple months ago. Right now, the Treasury every day for that $6 
billion shortfall is juggling money internally and borrowing it out of 
the military retirement accounts or our thrift savings accounts, the 
cash accounts, and those things. We are doing internal borrowing. All 
that has to be paid back, and it all has to be paid back with interest.
  We are still working on the rough calculation. Treasury put out a 
number, but I don't like their number because I don't think it was 
real, and we had all the visibility. We worked on the dataset saying: 
When we finally raise the debt ceiling, let's say a month or two from 
now, Treasury is going to need to pay back those dollars plus the 
interest. They are going to come to market with $400 billion, $500 
billion, $600 billion of borrowing. Just be prepared for what is really 
going on in the interest rate markets, the debt markets, and will we be 
beyond some of the discussions of trade where countries like Japan 
aren't leaking stories that they are going to use our debt as leverage 
against us.

  I used this board a couple of times now, but I want it to make sense. 
This is the estimate for net interest as a share of revenues in 2035, 
so that is 9 budget years from now. The chart here and the bar here I 
want people to pay attention to is Moody's, who has this whole thing 
where they do analytics on debt and spending. Mr. Speaker, their 
estimate is in 9 years, 30 percent of U.S. tax collections, that is 
everything, corporate, individual, estate, the tariffs, everything, 
they estimate in 9 years, 30 percent of all those tax receipts that 
come into the Federal Government will just pay interest. This is based 
on sort of today's interest rate projections.
  I showed some charts a couple weeks ago that showed an estimate that 
if U.S. debt went up 1 percent in interest--selling our bonds, if 
interest rates went up 1 percent on us, in that 9 budget years, it is 
not 30 percent of tax receipts that go to just interest, it is 45 
percent.
  Are you prepared to have a world where here is $1 of taxes I am 
paying, and 30 cents of that just pays interest; or God forbid, 
interest rates go up, and 45 cents of that dollar just pays interest on 
the bonds?
  There is also a chart where we actually went back to the early 2000s 
when we were kissing up against 6 percent, and it was just like 
devastating, the amount of tax collections that get consumed by 
interest.
  Remember, when we finish this fiscal year, the CBO estimate is U.S. 
sovereign debt, all of it, the gross debt, will be at $37.2 trillion. 
The thing we are not supposed to tell people because it hurts their 
feelings, gets them upset, but it is called math, is over the next 10 
years, the vast majority of debt is interest and healthcare costs, 
mostly Medicare.
  Unless you are willing to have honest conversations about debt 
deficits and demographics, the demographics is the driver of U.S. 
sovereign debt. We have a shortage of young people in America. We have 
foreigners come and get educated here, and we send them home because we 
are so brilliant.
  Healthcare costs: We do all this game playing around here where our 
healthcare discussions are about healthcare finance, not about changing 
the cost of healthcare.
  The thing about this, the ACA, many of you know it as ObamaCare, it 
is a financing bill. It is a financing bill. It is who gets subsidized 
and who has to pay. The Republican alternative was a financing bill. 
Medicare for All is a financing bill.
  We don't have the discussion of how to revolutionize this either 
through technology, a healthier society, taking on obesity, the things 
that drive the cost of healthcare--how about this concept of we build a 
healthier society, and we use technology.
  I am wearing one of these Oura rings. We are doing experiments in our 
office with other wearables trying to build data. Is that Republican or 
Democrat? It is just data. I don't know why we haven't been able to 
build a love connection here or a policy connection or whatever the 
hell we are supposed to call it between the left and right saying: What 
would happen if we engage in policies that change the price of 
healthcare? Instead, we do these debates because everything in 
Washington is about the money.

                              {time}  1515

  The people marching up and down our hallways here are not coming to 
our office to say: David, adopt technology. Lower the price of living. 
Lower the price of healthcare.
  It is: We want more money, or we want you to build a barrier to entry 
to our competition.
  We call it rent-seeking, if you remember your high school economics 
class.
  Let's take a look here. I need you to understand how rough our 
position is in the world right now. Global 10-year borrowing rates. I 
brought the charts before. We have been bouncing between the 13th 
position--I think we fell to the 12th position, then the 14th 
position--where other countries are able to sell their bonds cheaper. 
Yet, the one that just enrages me, here is Greece. Greece can sell a 
10-year bond cheaper than the United States today.
  When you run around thinking that the United States is the gold 
standard, we are also screwing up our extraordinary privilege of having 
the world reserve currency, and the dollar is coming back to us because 
you start to see some slowdown in buying U.S. sovereign debt.
  Mr. Speaker, we don't know the real numbers because we are in 
extraordinary measures. We are not coming to market with new debt. Yet, 
think about this. Here are the countries that can sell a 10-year bond 
cheaper than the United States: Italy, Greece, France, Canada, Germany, 
China, and Japan all can sell a 10-year bond cheaper than the United 
States with lower interest rates. Does that make anyone concerned?
  I think I have a chart that shows that the United States will consume 
30 to 40 percent of all of the world capital that is going to sovereign 
debt in the next decade. Yet, we are not supposed to talk about that. 
Then, the absurdity from the left: Well, we tax rich people more.
  Okay, at best, you might get 1 percent, 1.5 percent of GDP. For all 
of the things we talk about cutting, we get about 1 percent. So the 2.5 
percent--Mr. Speaker, this year, we are on pace to borrow 7.3 percent 
of the entire economy. That is just this year.
  One of our charts--and I think this one comes straight from CBO--says 
that with that little change in interest rates, in 2035, we may be well 
over 9 percent of the entire economy that year in borrowed money. It 
doesn't have to be this way.
  We are doing these reconciliation negotiations, all of those things, 
and the inability of groups that come into the office and demand more 
money to come in with an idea, saying: Maybe we shouldn't be spending 
billions and billions of dollars on duplicative MRI scans or the things 
we just waste money on because it turns out that that waste--some 
people who come behind these microphones call it fraud--turns out to be 
the profit model of many of the bureaucracies and many of the business 
models. It doesn't have to be this way.
  Start to take a look at the actual data. Last year, the gross 
interest--that is what we sold publicly and had to pay interest out 
internally. When we borrow money from the Social Security trust fund or 
these other things, which all that money has already been borrowed, we 
have to pay interest back. When Social Security redeems its bonds, we 
pay them back the money they need for that next month's checks to come 
out because, remember, Social Security is running about a little less 
than a structural 25 percent shortfall from tax collections to checks 
out the door. We also pay them interest.
  Last year, we spent $1.133 trillion in interest. Our best estimate 
right now is your government will spend just a little shy probably of 
about $1.3 trillion

[[Page H1878]]

in interest this year. Why that is important: Realize that is more than 
defense. Let's take a look at this. Think about that.
  Starting at about 2022, our interest became more than the Department 
of Defense budget. How many of the public understand that interest, if 
you actually calculate the gross interest, is now the second biggest 
spend in the United States? Social Security comes in at about $1.480 
trillion. Interest this year will probably come in at, what, $1.2 
trillion, $1.3 trillion?
  Interest now is No. 2. Defense right now is actually coming in around 
No. 4--Social Security, interest, Medicare, defense.
  How many times do you hear people come behind these microphones who 
actually at least know their basic math or want to tell the truth to 
the voters? Once again, is this Republican or Democrat? It is just 
math. It is an obligation that we have to pay.
  We are going to do what about it? We are going to squeeze out our 
ability to do the things that we believe are important for protecting 
the Constitution and the society because, God forbid--the bond markets 
forbid--that we all of a sudden start to have a spike in interest 
rates.
  You start to understand that many of our brothers and sisters who 
come behind these microphones--I show the chart all the time saying: 
Here is the pie chart of all of our spending. Today, about 75 percent 
is on autopilot. Mr. Speaker, you and I get to vote on 25 percent of 
the spending. About half of that is defense; about half of that is 
nondiscretionary. Every dime that a Member of Congress votes on today 
is borrowed.
  Think about that. Other than when you are in reconciliation where 
Members actually get to have a vote or try to work on mandatory 
spending, which is formulaic, all defense and all nondefense 
discretionary is borrowed.
  My colleagues have heard a number of Members come behind the 
microphone and talk about how much nondefense discretionary has gone 
up, and it has. We have lied repeatedly when we did sequestration.
  Paygo, how many times--paygo, I actually think was a Democratic 
proposal from years ago that, if we are going to add new spending 
beyond the 5-year window, there needs to be an offset. Members saw a 
number of bills that expired just before the fifth year so that they 
don't set off the paygo, or like we did back in January when we owed 
approximately $1.2 trillion in cuts to meet the paygo--pay as you go--
rules.

  Now we just waive it, just like we have done with sequestration and 
all these other things. We tell people that we are going to be fiscally 
disciplined. As soon as it is uncomfortable, then we will just waive 
it.
  Why this is important is we will say that there is a 45 percent 
increase in discretionary spending since 2019, and it is. Yet, when my 
colleagues actually look at it, it is a lot of money.
  Did I mention that we are borrowing $6 billion a day? We went from 
$662 billion--this is nondefense discretionary, this is the Park 
Service, this is the IRS, this is the State Department, all of the 
things we think of as the government--it went up to $960 billion.
  Yet, why this is important to understand--I would vote to roll that 
back to the 2019 budget. Yet, if you see it as a percentage of GDP, the 
size of the economy, we are spending, which is the proper way to do 
big-boy math on budgets.
  In 2019, nondefense discretionary was 3.1 percent of the economy. 
Last year, it was 3.3 percent of the economy. It went up, but the 
economy got bigger. It turns out that, if you are borrowing 7.3 percent 
of the economy this year, you could get rid of all of what you think of 
as government, nondefense discretionary, and you could get rid of all 
of defense, and my math on the top of my head--I probably should have 
calculated this before coming behind the microphone--you would still 
need about another $400 billion to cover borrowing that covers 
Medicare. Think about that.
  There are those who say: David, balance the budget today.
  I can do it. Of course, you are not going to have a military, you are 
not going to have what you think of as government, and I need to find 
$400 billion in the mandatory space.
  There is this lack of understanding of the scale. Getting old, when 
it is healthcare and interest, that is the primary driver. No one wants 
to hear that. That doesn't set off the dopamine receptors. It doesn't 
make people mad. It doesn't get you on television.
  If you tell the truth about the drivers of U.S. sovereign debt, you 
will never end up on MSNBC or FOX News or any of those because no one 
wants to hear the actual math. We want things that anger people. It 
turns out that good accounting isn't really that exciting, but it is 
math.
  Mr. Speaker, here is the punch line which worries me and why I beg my 
brothers and sisters: For those of us in the House, we have a 
reconciliation budget. We are trying not to let the expiring provisions 
raise people's taxes. We have a reconciliation budget in the House 
that, if we do everything right, we get a couple trillion dollars of 
savings over 10 years. We are going to spend over $68 trillion in the 
next 10 years.
  How many Members of Congress have had protesters outside of their 
offices saying that they can't cut things. We are talking about a total 
of $2 billion or $2 trillion in savings over 10 years when we are 
spending $68 billion. Have we lost our minds?
  Yet, if we were to do the Senate's reconciliation budget, which has 
almost no cuts in spending in it, we will borrow approximately--I am 
conflating publicly sold debt with the debt we would create in the next 
10 years. What took us 240 years to build, we will double in 10 years, 
or come close to doubling in 10 years.
  Does this body, the lobbyists in the hallways, the groups in the 
hallways demanding more spending, or any of the staffers who might not 
have a life so they are watching this really think that the bond 
markets aren't going to go: They are doubling U.S. debt, maybe we 
should ask for a little premium, which is called term premium, on U.S. 
sovereign debt, but I just showed you and told you what happens if we 
go up 1 percent.
  Just that 1 percentage point is $3 trillion of additional interest. 
It is more than everything we are talking about trying to cut.
  Here is your balance: How do you communicate to the people we borrow 
money from that we are a good credit risk? We are going to pay you 
back. We are going to pay you back appropriately. We are not going to 
say crazy things: Maybe we should force you to go longer on the bonds, 
or maybe we should ask you to do this or that. You can't do that. You 
don't screw with your bankers.
  Just as in the article, we are already up against the leverage of 
Japan in this one, but I don't know why it is not about other countries 
using the fact that we have used them and we have needed them to 
finance our debt. Then we intend to leverage them?
  Okay. They need trade with us. Let's use that leverage, but let's 
also be respectful of the fact that they are one of our bankers.
  Understand the fact, Mr. Speaker, that if we don't get our act 
together, the United States is on track to double its borrowing over 
the next 10 years. If that becomes the perception in the world debt 
markets, we are going to pay a penalty for it, and that penalty is 
really expensive.
  Mr. Speaker, I am going to go back to the office and have more 
coffee. I appreciate the Speaker's tolerance, and I yield back the 
balance of my time.

                          ____________________