[Congressional Record Volume 171, Number 99 (Tuesday, June 10, 2025)]
[House]
[Pages H2607-H2610]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MATH ALWAYS WINS
(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, Mr. Green caught us a little bit off
guard. He suddenly stopped, and I am not used to him doing that.
Mr. Speaker, we are going to try a couple of things tonight, and I am
going to try to do this as efficiently as possible. I hate doing it
this way, but part of what I am going to do tonight is respond to
basically a little bit--actually, a whole bunch of just a little bit of
misrepresentation that keeps coming into our office.
Every week for years, I come by here, and I sound like an idiot
economics professor when I walk through the math, trying to help our
brothers and sisters here in this body who might be crazy enough or
might not have enough of a life to watch a presentation like this. It
is a simple philosophy. At the end of the day, the math will always
win.
I am going to try to do three things here. I am going to try to
actually get the reality of what happens and how the tax system works.
When our brothers and sisters on the other side say to just raise
taxes, that that will cover everything, I am going to show, with our
history, that it doesn't work that way.
The second thing is that I am going to show a series of proposals
that we have made--and these are only my responsibility, so don't blame
another Member of Congress. We have this current reconciliation budget
and another one that sort of starts again this summer because,
remember, functionally, depending on timing, we could have three bites
at the apple on reconciliation.
Why do we do reconciliation? It is a way to get through the
filibuster in the Senate under the 1974 Budget Control Act.
I have brought pieces of legislation to reform Medicare Advantage
because you have seen The Wall Street Journal and ProPublica stories
of, functionally, the criminality that is going on. The MedPAC report
basically shows hundreds and hundreds of billions of dollars of waste
and fraud because of what some of the insurers are doing.
I am a big fan of a capitated healthcare delivery model because your
incentive is to help people be healthier, but if you have a system
where you can make stunning profits by scoring people as sicker, we
have a misalignment. That is not what Medicare Advantage was designed
to do. It was designed to actually provide a package of delivery to
make you healthier.
I am going to show a little bit of data on a talent-based immigration
system. Over the previous weeks, I have come here before and shown that
we have a demographic crisis. We have a shortage of young people.
Think about this bit of math. Twenty years ago and today, we
functionally have the same number of 18-year-olds, but the number of
people who are 65 and up has doubled.
Over here, I have my 18-year-olds. Over here, I have gone from 35
million to now almost 70 million of our brothers and sisters who are 65
and up.
[[Page H2608]]
You have a shortage of young people in this country. Unless you deal
with that reality--but you don't want to open up the borders. That is
the disaster. You make people poorer by bringing in people to compete
with your working poor. That is the cruelty of what the last
administration did. They crushed working people's wages.
I want to grow the economy, grow productivity, and make this society
wealthier. We are the only country in the entire industrialized world
that hasn't moved to a talented-based immigration system so that we can
grow and compete.
I am slightly off the rhythm I wanted to use.
In the 1970s and 1980s, the world competed for hydrocarbons. In the
last decade, we competed for rare earths. This decade, and the
economists say maybe over the next two decades, the world is going to
knife each other for smart people. In a world that basically is heading
toward flat population growth, maybe we should show up to that battle
because we educate people here. We educate them with our system, and
then we send them home to compete with us.
Have we lost our minds? To President Trump's credit, he has talked
about this repeatedly.
Forgive me, but I am going to have to reach over here to do a little
sorting of these charts because they are out of order.
First, I need to work out some principles. If you actually look at
our history--I am going to show a couple of charts of this--times when
we have had fairly high marginal tax rates--actually, let me do it on
this board. This one is actually a little easier to understand.
Actually, let me just use this one. It is not the board I wanted to
start with, but let's work through it.
If you take a look at what we spend and take in, in tax collections,
here is your structural problem. We have had times with very high
marginal tax rates and very low marginal tax rates.
Go back and, since the 1970s, we always seem to end up somewhere
between about 17\1/2\ to mid- to high-18s high marginal tax rates. We
are still getting 18 percent of GDP in tax receipts.
When we talk about these things, you will often hear us talk about a
percentage of the size of the economy. It is too confusing doing dollar
amounts because of inflation and those things, and the dollar amounts
change. When you hear someone pretending to be an economist, we are
going to talk in percentage terms.
We have had times where we have had very low marginal tax rates, such
as after the Reagan revolution. Yet, we still have the same percentage
of the economy in total tax receipts because the economy grew bigger.
Our crisis, particularly in the last decade or two decades, is this gap
here. We are heading toward now spending 25 percent of the entire
economy.
Think about this. This year, where the economy has actually been
fairly decent, we are doing okay in our tax receipts. We are right on
target, but with our spending, we are going to borrow about 7.2 percent
or 7.3 percent of the entire economy this year. That gap is the debt
and deficit.
When our brothers and sisters on the left keep saying things like
raise taxes, we have done that. Remember, we have been experimenting
with this since--what is it?--the 16th Amendment. We have had times of
raising the high marginal tax rates and low marginal tax rates.
Somehow, the size, the growth, of the economy is what fluxes.
Therefore, the receipts we get--we call them tax receipts; we don't
call them revenue--the receipts always sort of stay right there in that
mean.
If I can get my boards in some sort of order so they will make sense
to us--forgive me, as I get myself organized here. I put them in out of
order.
What should scare us to death is, right now, basically the percentage
of all tax receipts required to cover interest. This year, for every
dollar we take in, 16 pennies of it cover interest, just interest. In 9
budget years, 30 percent--actually, in 8 budget years, 30 percent of
every dollar we take in, in tax receipts will just cover interest.
I didn't bring the chart. Maybe I should have because they have been
mixed up. If we had a 1 percent increase from what we expect baseline
interest rates to be, Mr. Speaker, would you dare in your head guess
that, in 2034-2035, 30 percent of all of our tax receipts is just
covering interest?
{time} 1840
Mr. Speaker, 1 percent interest increase, we get up to 45 percent of
all tax receipts is just covering the interest. That should scare the
crap out of people.
Are we allowed to explain that almost every dime--well, the vast
majority of the debt increase over the next decade is interest. God
forbid, we tell the truth. It is Medicare. We got older. We have a
shortage of young people.
Let's actually sort of walk through some of the reality of what our
brothers and sisters say on the other side.
I have used this article before. It is one of the best in explaining
the reality of the math and also the reality of the lies. They are just
outright lies. We have to tell the truth.
This is written by Jessica Riedl in 2023. What was done is, they took
all these tax proposals that the Democrats have proposed, the ones we
have scored, and then did the economic modeling.
Let's raise the capital gains tax on rich people. We will take
wealthy people and we will raise their marginal income tax. We will
raise their estate taxes. All the things that we get in our townhalls
and discussion groups, everyone says just tax rich people. That takes
care of the problem.
Here is the math. The beautiful thing about what Riedl did here is
she actually took economic data from all sorts of studies from leftwing
groups and from just statistical modelers. When you read it all, almost
every proposal the left has given us, if you add it up--so raise the
estate tax, raise investment taxes, raise corporate taxes, raise
individual income taxes, by the time you are done, you might pick up
another 0.5 of GDP in taxes for the U.S. Treasury.
Did you hear my voice a couple moments ago? This year we are
borrowing 17.3 percent of the entire economy. Next time you have
someone on the left say just raise taxes on rich people, go online to
the Manhattan Institute, pull up the study, and walk them through the
actual math.
I have a chart for those on the Republican side when we walk through
some of the things we want to cut. We can have a revolution in the cost
of government if we are willing to redesign.
There is a difference between redesigning programs and cuts, but many
of the things we talk about cutting, we get only 1 percent. Once again,
why this is so important here, when the left says, well, you don't have
to cut anything. Just raise taxes on rich people. That is not what even
their own economic literature says. Of course, that would require
literacy, wouldn't it? Someone would actually have to sit down and read
the stuff with a calculator.
We have a crisis. Having a society that is getting older is not
Republican or Democrat; it is just what we are. It is math.
Look, if we are not willing to tell the truth, we can continue to use
our campaigns--all right. I will take a slight non sequitur.
We are going to get a new Social Security-Medicare actuary report in
the next couple weeks. I know we will all be just giddy to actually
read it and see what it says. If we look at last year's, it basically
said: In 2033, so 7 years, 8 years from now, the trust fund is gone. It
is empty. That is because every month Social Security gathers payroll
taxes and there is a shortage, so they take their special T-bills,
because they have loaned money to the general fund, and they cash those
in. They get that money back from Treasury. Treasury goes out and
borrows the money, but they get that plus interest. In 7 years, they
have no more special T-bills to cash in with the general fund at
Treasury.
In 7 years, if you get a Social Security check, you are taking a 21
percent cut. We will double senior poverty in America in 7 years. It
will double senior poverty.
This is a really moral place. How many idiots--excuse me--electeds do
you see come behind these microphones and say: It is a Democrat
problem. It is a Republican problem. It is a human problem. We are
going to fix this. And then the lying that goes on here.
[[Page H2609]]
Last year, I did an entire series of charts, which the Democrats
turned into attack ads, that showed raising the cap. If every dime
someone earns is subject to the full Social Security tax, it only
covered 38 percent of the shortfall. We didn't even do the economic
effects as to how much the economy slows down when you do that.
The solutions you hear repeatedly from our brothers and sisters on
the left just mathematically aren't true. They will say just raise
taxes. You get 1\1/2\ percent of GDP. In 9 years, we are borrowing 9
percent of the entire economy.
Well, for Social Security they will say just raise the cap. Okay, but
don't give any benefits. That is the other part. Keep the benefit
formula where it is today. Tax people on every dime above that formula.
What is that today? It is about $170,000 today. Take every dime above
that, put the full 12.4 percent Social Security tax on it, but don't
give any benefits for that. It will only cover 38 percent of the
shortfall.
I think we were modeling it for 2034, the first full year, the
shortage--they even said we will just pay for it out of the general
fund. I think it was $608 billion, so almost two-thirds of our entire
military budget.
If you are someone that comes to me and says: David, I want to
protect the country. I want to protect the military. I want to do this.
I want to do that. Well, tell the truth about our demographics and the
earned benefits that actuarially are collapsing around us. We are
terrified to step up and do the math and then tell you the truth.
We can start to actually walk through actual solutions. If I came to
you right now and said--let's see if I can find the right charts here.
I did a whole presentation over and over the last 3 weeks on Medicare
Advantage. In 2005, the Republican idea was to buy capitated managed
care policies for seniors. The idea was that there would be a benefits
package and the insurer would actually make money by helping people be
healthier.
Over the years, some of it was in ObamaCare and other things. It got
screwed up when the insurers were making money by scoring people as
sicker.
In 2005, the model for Medicare Advantage said it is going to come in
at 95 percent of the fee-for-service cost. Look, I am sorry to geek out
on this, but this is important.
Remember, 55 percent of Americans are on Medicare Advantage. I
represent an area with terrific penetration because we have very robust
networks and those things in the Phoenix area, but it was supposed to
come in at 95 percent of the cost of fee-for-service.
Today, according to MedPAC, because I know we all read the MedPAC
report, it comes in at 120 percent. Just that difference last year is
$100 billion.
When The Wall Street Journal does five major series on the fraud,
misrepresentation--let's call it misalignment. When the Justice
Department has leaked out, making announcements of not only civil suits
but criminal suits, criminal investigations that are going on, maybe
this place should pay attention.
The beauty of it is, this type of scale for waste and fraud being the
largest in the entire country--remember, our preliminary score from CBO
of Medicare Advantage is $1.840 trillion, making that bill the single
biggest savings bill for a single bill in U.S. history, and I have
already introduced it.
{time} 1850
You see the discussion, the debates going on in the Senate right now,
but it is scary because you have got to get up in front of the American
people and explain, okay, this is Medicare, this is Medicare Advantage.
What we are concerned about is not the healthcare you receive, your
earned benefits, it is what the insurance company over here is doing.
That is why they are under criminal investigation. I am sorry, it is
uncomfortable, but our job here is to tell the truth and make the math
work.
The second thing--the reason I am walking through these is we have
introduced three bills that cover every dime, every dime of the
reconciliation budget, and add, I think, maybe even an extra trillion
of savings.
Remember how I mentioned before one of the crises we have in the
United States is we don't have enough young people? We have introduced
a talent-based immigration bill. Now, I am actually surprised I haven't
taken more beatings, but I am sure they are coming.
We are functionally the only country left in the industrialized world
that uses a familial-based immigration system. It is, your family
sponsors the next person, the family sponsors the next person, and so
on. Canada, Australia, New Zealand, Great Britain, everyone else has
gone to a talent-based system to maximize economic growth in their
countries. We haven't shown up to that.
However, if you listen to what President Trump has talked about of
the insanity of educating people and sending them home to compete with
us, maybe if we move to a talent-based immigration system, we stop
educating them here and then sending them home to compete with our
economy, it turns out that actually comes in at producing $152 billion
of savings.
The amazing thing is, in the second decade, that with some of the
expensing of research and development, those things, you get a
substantial economic growth. You get productivity. This is how you
actually grow the economy so you have the resources to cover our
promises.
The other bill we are doing that is actually going to be sort of
fascinating--let's see if I can try to explain this. This one is less
about cutting spending. It is about finding cash that is sitting up and
down the government in accounts. Some of these things have hundreds of
millions of dollars that have sat there for years and years. We call it
unobligated funds.
I did this chart just to try to explain. There is no year. It is sort
of cash that was assigned there, but the way it was authorized, there
isn't a particular year it has to be spent. There are those that it was
actually a 2-, 3-year commitment where you borrowed the money, we stuck
it in this agency's accounts, and it sits there, but it hasn't been
spent. Then there is those where it is actually money that they never
used all of it.
The crazy, crazy thing, if I came to you and said what would you
guess--now, as a policymaker, I deal with the reality, I am never going
to get all of it, but if you add up all that what we call the forgotten
funds money, it is $1.524 trillion.
If anyone else is playing along, I have Medicare reform, $1.8
trillion, and talent-based immigration, $150 billion. Let's say we were
able to get just part of the expiring provisions, that is $540 billion.
I just covered every dime of the reconciliation budget.
There is no borrowing, and you maximize economic growth because you
are not engaging in the crowd-out effect of having to go to markets.
Remember, we borrow $6 billion every day. In 9 years, we borrow $10
billion every day. We have got to do things like this so we are not
competing with you or your family trying to get a mortgage, trying to
get a car loan, trying to see what your credit card interest rates are
going to be.
Think of this, in the last 12 months, half of all the debt in the
U.S. bond markets, half of it has just been the United States Federal
Government. Your school district, the company that wants to expand, all
the bond market that is supposed to be helping finance the growth of
this society, this country, half of it now is just the Federal
Government, and it is going to get worse.
I am giving you three bills that cover every dime of the borrowing.
None of them cause burning and slashing and gnashing of teeth and the
whining that happens around here. It turns out they are all really good
policy. This is the constant argument I keep trying to make to our
brothers and sisters here, we are going to have to do policy, and
policy is hard. It is complex. There are armies of lobbyists walking
around this campus here, and the inefficiency of the Federal Government
is their profit model. There are bureaucracies who despise the concept
of saying maybe you should use technology.
I have a report on my desk from the IRS. I have only read the first
three or four pages. It is an analysis of their data. It turns out the
crazy thing, the chat, the computer answering the phone at the IRS, has
a higher favorability rate than when a human answered the phone.
[[Page H2610]]
Maybe we should stop being scared of adopting the technology because,
remember, last year's taxpayer audit said only 31 percent of the phone
calls to the IRS were getting answered, yet the IRS union attacks you
for saying maybe we could use technology.
Oh, we can't do that.
Well, now we have the survey data that shows the chat that answers
the phone, that answers your questions, that walks you through your tax
form also has a higher favorability than the human. It is
uncomfortable, but it is math and the facts.
I will try to walk through a couple of these things. I am just going
to show this board, even though I am going backwards. I mentioned my
boards are out of order. See that red area? That would be the savings
on the Medicare Advantage. There is still $14-plus trillion--trillion--
being spent on this program over the next 10 years. The crazy thing--
this idea of fixing the waste-fraud misalignment--this reform bill
could be Republican and Democrat because anyone who has bothered to
actually read the MedPAC reports for the last half a decade knows we
have a problem.
How do I get the talent around here to not be terrified of the army
of lobbyists and actually step up and do what is hard, but do what is
right?
Mr. Speaker, I apologize, I am going to try to go a little bit faster
here and see if I can get to some of the points that would help make
sense.
I was just saying this a moment ago, but maybe it is easier with the
visual. This is baseline. This is our baseline. Almost every dime of
this growth from the baseline spending is the growth of interest and
Medicare.
Today, we borrow $6 billion a day. In 2035, functionally for us it is
nine budget years, we borrow $10 billion every day. Okay, let's do that
simple math in our heads, 10 times 365, and it is actually not 10. It
actually comes in, I think, at $10.4 billion, so it comes in like $3.8
trillion is Moody's who did the analysis on this, Moody's Analytics,
that in 2035 we are going to borrow $3.8 trillion that year. We are
going to borrow 2.2, 2.3 this year, and that is just sort of built off
of what our baselines look like.
Why this should terrify us, CBO has us over the next 10 years adding
another $22 trillion of debt. If interest rates move--because now you
need to calculate the higher interest rates. If you start to put those
dollars in--we are not completely there, but we are getting close to
the next 10 years, we borrow as much as we did the previous 240 years.
Okay, this has got to be the dozenth time I have said this on the
floor, and I can't seem to get it to sink in, but that is the
underlying math.
What should also be scaring people to death, yet the hallways are
full of people coming into our offices demanding more money, the United
States now is like number 12 or 13 on the credit stack, meaning take a
look, Greece today can sell a 10-year bond cheaper than the United
States. We have 18 States that can sell a 10-year bond cheaper than the
Federal Government, but yet we borrow money to send to our States.
{time} 1900
Take a look at this. Does this not just curl anyone's toes? Yet,
somehow, magically, we think the money tree is going to continue.
Look, let's see if this visual helps. Think of the protests, the
whining. I won't use the word ``bedwetting'' because I think that is
just inappropriate for Members of Congress to say.
The baseline is that the Federal Government intends to spend $86
trillion over the next 10 years. $86 trillion is the CBO baseline. All
we are talking about in the budget reconciliation was a $2 trillion
savings.
To give you an idea of just how absurd this debate is, tomorrow, we
are going to do, I think, a rescission vote. I think it is tomorrow.
Maybe it will be Thursday. Think of the angst, the protests. ``We are
upset. David, you can't lower spending.''
Let's see if we can do this. How many hours are there in a year?
There are 8,700 hours in a year. Work with me on this, Mr. Speaker. The
rescission package takes care of 28 hours of that 8,700 hours of
borrowing. Yet, listen to people come behind these microphones. It is
like the world is coming to an end.
Please understand that this is just the beginning. We want this
Federal Government to be able to stabilize and survive. We have
economists on the left and the right saying that if we can get to about
3 percent of borrowing of GDP, we can stabilize. We are borrowing 7.3
percent this year. In 9 years, we are borrowing 9 percent of the entire
economy.
Understand what this means. That would be reduced spending this year.
We are going to spend--what?--$7.3 trillion this year. You would have
to reduce Federal spending by $1.4 trillion to get down to 3 percent
borrowing.
The vote we are going to have in the next day or so on the first part
of the rescission package covers 28 hours of borrowing for the whole
year, yet I know I even have Members on my side who are all puckered
up, running around saying: ``How do I explain that?''
Do you understand how much trouble we are in if we are borrowing
about $72,000 every second of every day? In 9 years, we are borrowing
over $100,000 every second of every day.
I have shown before in the charts and the reports that the Democrats'
plan to just raise taxes on everyone doesn't get you anywhere close to
what is required. Remember, every tax hike they have, 1.5 percent of
GDP, and we are borrowing over 7 this year.
We need a revolution in how we deliver services. Yet, Mr. Speaker, I
will tell you right now, look at the lobbyists walking up and down our
hallways. They despise--the bureaucracies despise--anything that
changes their business model.
I want to extend the policy, Mr. Speaker. I know my boards were a
little disjointed because they came in out of order, but the concept
was very simple for this presentation. It is three things. The scale of
the borrowing--there are actual policy solutions that you can pay for
everything we are doing right now. It will actually open up our brains,
open up our minds, and open up our calculators.
Actually, look at it. A number of the solutions actually don't need
to be partisan warfare. We will turn them into partisan warfare because
we care much more about winning the next election than we do saving the
Republic.
Mr. Speaker, I am in a 50/50 district. I am blessed. I represent a
really well-educated population. They are fairly prosperous. They are
smart people, and they have tolerated--not because they are thrilled
about what I say, but I think they believe what I say. I go to great
lengths to get the math right. There is hope. There is a path. There is
a solution.
I also have one of my economists who makes it very clear. We may have
only about 36 more months, and then we start to hit what is referred to
as sort of the interest rate feedback loop. Remember, a year ago, I
think we had 3 or 4 months where this government had to borrow money to
pay for our borrowing. If today the 10-year bond is at 4\1/2\, realize
that if it goes to 5\1/2\, in 9 years, 45 percent of all of our tax
collections are just interest.
Let's not let that happen. Let's get our act together. Let's
communicate to those people we borrow money from that we are serious
about some fiscal sanity. That is how you maximize the efficiency. That
is how you lower the interest rates for every American. That is how you
give our kids and your retirement a future.
Mr. Speaker, I yield back the balance of my time.
____________________