[Congressional Record Volume 172, Number 14 (Wednesday, January 21, 2026)]
[House]
[Pages H1167-H1170]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEBT, DEFICITS, AND DEMOGRAPHICS
(Under the Speaker's announced policy of January 3, 2025, Mr.
Schweikert of Arizona was recognized for 30 minutes.)
Mr. SCHWEIKERT. Mr. Speaker, shall we have some fun with math and
economics? It is something we just don't hear a lot of here on the
floor of the House. Remember, this is my therapy because I often sit in
the back of the room and stew when I hear people say things when it is
obvious they didn't pull their calculator out.
I am going to try two things tonight, and if you are actually
interested in budgets and economics, have fun with me. If you are not,
go watch Netflix. We are going to actually try a couple concepts, where
the money is going and within that, the scale of our debt and deficits.
The fact of the matter is, we are at what is called interest fragility
that--think about what happened over the last couple days in the
discussions coming from the White House, from us. The bond market
actually bounced up about 30 basis points. We were just playing on the
back of napkins, the math, and if that had held for an entire year,
just those 30 basis points would have been $33 billion of additional
interest.
I will try to actually explain that and then actually talk about
something that is really interesting. The economy from a GDP
calculation standpoint, and this is just the economists looking at the
vitality in the economy, is remarkably good. We are running over a 5
percent GDP, which if you go back and look at the economic projections,
it is double what many of our smartest economists in the country
thought we would be at a year ago, but our spending--because of
interest and healthcare and the reality that we are going to have to
deal with is debt, deficits, and demographics.
Once again, remember, we functionally have the same number of 18 year
olds today as we had 20 years ago, but we have double the number of 65
and up. It is just what we are. Don't get mad. It is not Republican or
Democrat. It is just demographics and understanding when our brothers
and sisters move into their earned benefit years, what it costs.
The fact of the matter is, this Congress refuses to do the hard
things because in 6\1/2\ years, the Social Security trust fund is empty
and you get a 24 percent cut in your check and we double senior
poverty. We double the number of baby boomers who will live on the
street.
In 6\1/2\, 7 years, the Medicare trust fund is empty and your
hospital gets an 11 percent cut and much of the financing things like
Medicare Advantage and those actually just become, let's just say,
difficult.
Let's walk through some of this. I pulled up this chart because I
haven't used it in a few months and I am realizing there are not enough
folks, particularly the staff--remember, I often do these because I am
talking to a thousand televisions around the campus. The room looks
empty, but we are on televisions. Hopefully, there are some staffers
who are working on policy who will understand how important these
numbers are.
Do you see the blue portion of that chart, Mr. Speaker? That is
discretionary. That is all you and I get to vote on. As Members of
Congress, we only vote on the discretionary portion, and this was a
2025 chart. Today, it is
[[Page H1168]]
probably only 25 percent, not 26 percent, of the total spending. Every
dime of that is borrowed.
{time} 1830
Mr. Speaker, the math for last year, for every dollar we took in, in
tax receipts, we spent $1.43.
We were just in the back. I was talking with one of my Joint Economic
economists. We think it is lower this year but we are still not--
because we are having to make the adjustments on the student loans and
those sorts of things, it could be down to $1.37 or $1.40 this year.
Think about that. Last year, for every dollar that came in, we spent
$1.43.
Realize all this in the red is on autopilot, and a portion of it is
actually on borrowed money. If you just do the hierarchy, every dime of
defense is borrowed. Every dime of nondefense discretionary is
borrowed. That is only about $2 trillion. A wedge of the mandatory also
ends up being borrowed.
There is one other thing I want to point out in the chart. If you
actually take a look at the hierarchy of spending, Social Security is
number one. It is $1.5 trillion.
Guess what is number two if you do the total interest paid. It is
interest. Here is interest to the public who bought our bonds, whether
it be your pension plan as an individual or another country, or the
interest we have to pay back to the trust funds when we reach into the
Social Security trust fund, the Medicare trust fund, the railroad
retirement trust fund, and those things. We borrow the money. We owe
them interest.
Total interest last year was about $1.2 trillion, making interest the
second biggest expenditure in this government. Medicare is number
three. Medicaid and healthcare subsidies are number four. Defense is
actually number five.
I always love it--I often have these conversations back home when I
have a Democrat who says: Well, if you cut defense.
Then they look at me in horror when I ask them if they realize that
in the hierarchy of spending, defense is actually the fifth biggest
expenditure in Government.
This one is actually good news of some of what is happening. This is
actually one of my favorite charts because it actually demonstrates
here is our tax receipts as a percentage of the economy.
We were basically getting about 17.1 percent of the economy. We have
some new math right now. It says we are probably peaking over 18
percent, maybe even higher, of the economy coming in, in tax receipts.
That is wonderful except for one really yucky thing.
Remember last year, when we were up, getting 17.1 percent of the
economy in taxes, we functionally were spending 23.4 percent. That
delta is the deficit. What happens when your tax receipts are going up
as a percentage of the size of the economy and the economy is growing
but healthcare and interest are going up faster? Are we going to tell
the truth about that?
Here are basic factoids. I did this last week, but I want to say it
again because it doesn't seem to be sinking in. In about 33 or 36
months, half of every dime that the Federal Government spends, 50
percent of all of our spending will go to those 65 and up. Moody's
Analytics has in 2035--what is that--8 or 9 budget years from now--30
percent of all tax receipts going just to interest.
There was an interesting economic paper. It was actually an economic
paper demonstrating that Italy actually was more fiscally sound in the
long term than the United States.
When you see that headline, you sit down and read it, within there
was a factoid. If you use a 6 percent generational discount rate, which
is reasonable--it could be slightly high--for a child born today, you
need 104 percent of their lifetime earnings just to pay Federal pension
obligations. Those are Social Security, Medicare, military, and Federal
requirement.
Mr. Speaker, think of that. For a child born today, you need every
dime they will ever make in their entire life, plus another 4 percent,
to pay pension obligations. Does anyone see the immorality going on?
But we can't talk about that because that would be hard.
I believe the American people are a hell of a lot smarter than we
are. They are ready for us to tell them the truth about math. One of
the first things we as the political class have to do is stop lying
about math.
Let's actually walk through some of this, and I will blast through
these because I am trying to make a point.
Also, before I go much further, if someone actually wants to bathe in
the truth in math and what the future looks like and how we can fix it,
go to the Joint Economic Committee Republicans. We publish some amazing
things.
Every weekday, we do a text message to a few thousand people we call
the Daily Debt. It shows how much came in and how much we spent. We
give you a 12-month window so it fixes ups and downs. We will also give
you the fiscal year as it sits.
Mr. Speaker, I just got my Daily Debt text message. We are borrowing
over $71,000 every second. That is the 12-month calculation. It makes
up all the highs and lows and averages out. You have got to understand
that this ain't a game because that $71,000 a second, we need to have
buyers of our bonds. We make our buyers of our bonds cranky. It gets
really expensive.
This chart here is just trying to make a point of what is going on in
our debt and deficits. Remember that discretionary spending, the blue
on the pie chart I just showed you, is flat. It is not growing. Yes,
there is waste and fraud in it. We need to eliminate that. We actually
believe technology would eliminate that, except I can't believe how the
bureaucracies are terrified of the technology that can find the waste
and fraud.
Our growth is in the mandatory spending. It is the promises we have
made that we have got to keep but we have got to figure out a way to
finance it.
What this chart is showing is we see this slightly darker color here.
That is the primary deficit. That is actually programs that we are
spending more money than we have coming in. All of this lighter purple
is the interest we owe.
The point we are making is this. If we have a $2 trillion deficit
this year but interest is $1.2 trillion, interest now is the primary
driver. Number two is healthcare costs. We just have this problem of
telling the truth about healthcare costs are out of control. In many
States, the government is the primary--is the majority of money spent
in healthcare.
Let's have some fun here. I know we are all interested in bonds and
how they refinance. Remember, if you have $38.5 trillion of debt out
there, over $30 trillion of that is sold. That is what they call
publicly held debt. About one-third of that--and I was going to show
the charts of all the papers and the notes and the bonds. I realized no
one cares.
About one-third of that--let's call it $10 billion--has to be
refinanced this year. Much of that is coming off of lower bond prices
from a couple of years ago.
On average, we are picking up one point of interest, 1.5 points, some
2. There is your problem. The chart here--I am just trying to show
you--is we have to constantly refinance. We are refinancing at higher
interest rates because we are making the markets cranky. We are not
telling the bond markets that we are serious about taking on our debt
and deficit.
Mr. Speaker, have you ever heard the term ``bond vigilantes''? It
happened to the United States in the 1990s where, suddenly, we were
making the bond markets cranky. They were starting to demand premiums.
Our debt was a fraction of a fraction of a fraction of what it is
today.
We are on the cusp of putting the bond market in charge of this
country, not us. It is a really dangerous game we are playing. One of
the ways we mitigate that is we tell the bond market: We are adults. We
are being serious. We understand we have a demographic. We have a
healthcare spending problem. We are going to take it on. We are going
to adopt technologies. We are going to adopt other ways to make our
brothers and sisters healthy. We are going to telegraph to the markets
we are stable. We are America. We are the incredible investment.
If you think I am engaging in hyperbole, look at the price of gold.
If the
[[Page H1169]]
price of gold isn't telegraphing something to you, go back to your
basic economics class. There is something really wrong out there. We
are making markets nervous.
{time} 1840
It is estimated that, from fiscal year 2025 to fiscal year 2026, we
are going to have to borrow--this is what we call virgin borrowing; it
is new issuances--about $470 billion a quarter. That is less than $2
trillion, but it is pretty darn close.
That is on top of what we have to refinance. When you start to get a
sense of what we are bringing to the bond markets, it is more than just
the borrowing. It is the refinance. We are subject to the interest
rates.
We need to be understanding. Convince the people who are loaning us
money, whether it be your personal pension, your savings account,
Japan, whoever is buying our debt, that we are stable, that we are
adults, and that we understand. We have a demographic problem, but we
are going to engage in adult-like technology and borrowing policy,
things to manage our debt, and minimize it.
Mr. Speaker, this chart is substantially unreadable, but I wanted to
actually just show it for the fun of it. This is one of the things that
we use in our economic shop, where we try to actually say: Okay, here
is 1 year. If it went up \1/2\ percent, that 1 year costs $206 billion
over 10 years. It is basically a table that says that if interest rates
pop up this much, and it only lasts for 1 year or 2 years, here is what
it will cost us over the 10-year window.
The whole point of this chart is to start to demonstrate so many of
the things we talked about here. We are going to save $1 billion. That
is a lot of money. We believe, annualized, we are going to borrow over
$6 billion a day. In the first quarter of the fiscal year, we are
borrowing over $8 billion a day.
The arguments here and the debates we will have here, often to save
money, which are wonderful, we will have borrowed more money during the
debate than whatever the item being debated would have ever saved,
because: How do you talk about the drivers of debt?
The other thing we also have to deal with is when we get our policies
wrong, when we make the bond markets nervous, when they don't see that
we are fixated on debt management, fiscal reality, and interest rates
go up on U.S. sovereigns. They raise everything. It is more than just
the money we spend.
Mr. Speaker, we had months last year when we had to borrow money to
pay for our borrowing. That is partially because the tax collection
cycle goes up and down, but we raise your credit card. We raise your
car. We raise everything. When we screw up U.S. sovereigns, we make
bond markets nervous. They go up 30 basis points. You have to
understand that just raised every cost for borrowing up and down
through the economy.
It is more than just when I sit here and spout about saying that we
are going to pay this much in interest. Think about what we did to the
American families, businesses, small businesses, and farmers. We
somehow seem detached from the reality of the math.
Let's actually talk about where some of the money is going and why we
have to do such borrowing. CBO, 2025, Medicare accuracy, they actually
did okay, but okay when talking $1 trillion is, hey, they only missed
it by around 7 percent. That turns out to be around $70 billion of
spending.
Medicare, 2025 outlays increased by $77 billion, 8 percent. CBO was
projecting only $51 billion. From this scale of accounting, it is
pretty accurate, but you have to understand that we are looking at an
environment right now where we expect Medicare spending to double, to
go from $1 trillion to $2 trillion over the next 7 years.
So far, every healthcare chart I have where we are looking at what
the closing numbers for the 2025 fiscal year, they are all in excess of
what we projected. If you start to have a world where you are sitting
at 7 percent medical inflation, even if you have tax receipts going up
3 percent or 4 percent, we are borrowing more money.
Let's actually take another look at one of these. Major healthcare
programs were up $150 billion over the previous year, and the major
healthcare programs came in at a 9-percent increase from the previous
years.
Does anyone see a math problem? You have an economy right now that is
growing at 5 percent. It is amazing. Yet, our spending, when you tack
in the interest rates, the healthcare spending--if healthcare spending
is over 9 percent, you have a math problem.
Then, the argument we have from our Democrats is: But we need to
subsidize more.
We have turned healthcare into financial engineering instead of
helping our brothers and sisters be healthier. Legalize the technology.
Legalize the processes.
Do you realize that so many things where you could crash the price of
healthcare, this body actually keeps illegal?
We are going to do a number of healthcare bills. Every single one of
them is wonderful, except for one small problem: There are rounding
errors.
I love, love, love price transparency. I don't believe you can have
functioning markets without price transparency. Every academic paper I
have in my office says it is only about \1/2\ percent of price
improvement. Yet, major healthcare programs, there is a 9-percent
increase in spending. You get \1/2\ percent, and in a single year, I
have 9-percent growth in spending.
Does anyone see a mismatch? Great policy, great rhetoric, sounds
great on the campaign trail, and it doesn't save us.
Now, for those folks who know--how do I say this nicely? I like
Medicare Advantage. It is called Medicare part C if you are geeky. The
majority of our brothers and sisters on Medicare actually are on
Medicare Advantage. It is functionally supposed to be a managed care
optionality for your healthcare. So, you get a network. You know what
your benefits are.
We have a problem. We have these things called MedPAC reports. I have
a stack of them on my desk. On my desk, if you open them up, which I am
sure every Member of Congress opens them up and goes through them, it
will tell you that Medicare Advantage right now is costing 120 percent
of fee-for-service.
Medicare Advantage, which came into effect in 2005, is supposed to
come in at 95 percent of fee-for-service. That is a 25 percent delta.
We have been looking at charts and data and trying to say: Hey, we want
to protect Medicare Advantage. That is what seniors have chosen. They
like it. Can we actually get rid of the risk scoring and some of the
games being played with the star ratings, where they are milking the
system, because think of that?
MedPAC reports basically say that there is almost $2 trillion of
misalignment and fraud over 10 years. That is actually the biggest in
government. I know some people have problems with the difference
between millions, billions, and trillions. A trillion is really big.
Look at this chart here: Overpayment Per MA Beneficiary. This is done
by the MedPAC report, so this wasn't even done by my economists. This
is done by a room full of people who just specialize in Medicare
Advantage.
Mr. Speaker, in 2025, 14--actually, I think that comes out to $1.25
trillion, but this also comes to $200 billion, I believe, of
misspending. Am I reading that correctly? Yes.
When you see $1.4 trillion, and over $200 billion is in the MedPAC
report as being bad payments, misalignments, abuse, taking advantage of
the system, waste and fraud, Mr. Speaker, if we are going to do a
second reconciliation, I would propose that one of the most moral and
rational economic things that we can do is let's just fix Medicare
Advantage and put it back to how it is supposed to work.
I know we have armies of lobbyists in our hallways here trying to
stop us. Can you imagine why? If there is a couple of hundred billion
dollars in play, they are going to absolutely knife us to stop us from
doing the reforms.
{time} 1850
Are we tough enough to do what is right for the American people for
the next generation?
Think of this, Mr. Speaker: I have a 3-year-old. Yes, my wife is my
age. We adopted a little boy--same birth mom as our little girl. When
my 3-year-old is about 23 years old, every tax in the United States has
to be doubled just to maintain baseline spending.
Is that moral? Mr. Speaker, you have kids. Is this the America where
the
[[Page H1170]]
next generation always gets to prosper more? That is not the model now.
The next generation is going to be poorer, and it doesn't have to be.
We are on the cusp of amazing technologies--synthetic biology, cures
for diseases, things we can do that can make this another American
century. We just need to tell the truth about the math and policy
instead of the theatrics that go on in this place.
Mr. Speaker, I appreciate the six or seven people who have been
willing to listen to me.
There is a way to make this work. It just turns out that it is really
hard. Are we ready to do hard things for the country and then go home
to try to explain it to our voters that we are doing the right thing
for them?
Mr. Speaker, I yield back the balance of my time.
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