[Congressional Record (Bound Edition), Volume 160 (2014), Part 9]
[House]
[Pages 12140-12143]
[From the U.S. Government Publishing Office, www.gpo.gov]




        UNFUNDED LIABILITIES--THE GREATEST THREAT TO OUR FUTURE

  The SPEAKER pro tempore (Mr. Yoho). Under the Speaker's announced 
policy of January 3, 2013, the gentleman from Arizona (Mr. Schweikert) 
is recognized for 60 minutes as the designee of the majority leader.
  Mr. SCHWEIKERT. Mr. Speaker, I yield to the gentleman from Illinois 
(Mr. Shimkus), I believe it is southeast Illinois.


           Celebrating the Lives of Alan Dixon and Kenny Gray

  Mr. SHIMKUS. Mr. Speaker, I want to thank my colleague for yielding.
  I rise today to celebrate the lives of two extraordinary public 
servants, both considered from southern Illinois--one from deep 
southern Illinois--Senator Alan Dixon and Congressman Kenny Gray. Both 
passed within the last week or so, but our mourning has turned into 
remembrance and reverence for their undeniable commitment to all of us.
  Senator Alan Dixon--or as he was commonly known, Al the Pal, as we 
from Illinois knew him, and eventually everyone else in this 
institution and in Washington knew him as that also--was a larger-than-
life personality, with a can-do spirit, if you will.
  He came to Washington to get things done, particularly for his 
beloved Illinois. From his beginnings in Belleville and St. Clair 
County to being State treasurer and secretary of State, he modernized 
the offices he served in to better serve the people of the State.
  Elected to the U.S. Senate in 1980, he soon realized that Illinois 
lacked a cohesive message in Washington, D.C.
  With Senator Chuck Percy, he began a monthly Illinois get-together 
that continues to this day. It brings together Members of the House and 
the Senate, downstate, Chicago, Republican, Democrat, conservative, 
moderate, and liberal. We sit around, and we talk about the Illinois 
agenda and how we can work together to advance it.
  Our prayers and best wishes go out to his wife, Jody, and his family 
and friends.
  I would also like to single out a couple of other people who were 
very special in his life. One was Gene Callahan and Scott Shearer. 
Their public service on his behalf is emblematic of that of all those 
who worked with my friend, Al the Pal.
  Just as a side note to my colleague, we have a colleague here who is 
a Member of Congress, Cheri Bustos, who is the daughter of Gene; and 
there is that great connection of, in essence, a politically active 
family that continues to serve.
  We will miss Al the Pal. He was a great friend and a great public 
servant.
  Now, Mr. Speaker, let me turn to Kenny Gray. Kenny Gray was a very 
colorful Member of this Chamber, well known for spending many hours in 
the chair. He loved this House so much that, after he retired, he ran 
again and came back.
  He was known as really a cult of personality. In a sea of Washington 
grey suits, white shirts, and red ties, Kenny stormed through this 
place in a flurry of colors that had never been seen before, but you 
dare not look away, as the Prince of southern Illinois was here, and he 
was determined to fight for his constituents.
  Kenny made a big difference in southern Illinois. As the coal 
industry started suffering challenges, he worked hard. He was known as 
the Prince of Pork and the Prince of southern Illinois.
  He worked diligently to bring the interstate system to southern 
Illinois, and he is also credited to bring a major water conservancy, 
Rend Lake, which brings and provides much of the needed drinking water 
to southern Illinois, and I would argue deep southern Illinois.
  I am reminded of how he helped young people from southern Illinois 
come and grow here in D.C. A favorite example is my friend Brenda 
Otterson of West Frankfort, who came out to D.C. a few years back.
  She came here as a Republican--Kenny is a Democrat--but as a 
Republican. Brenda came from a family of Democrats. Try as he might, 
Kenny worked hard to convert her.
  When he finally realized she wasn't budging, he said, fine, and he 
helped her get a full-time job with a Republican Member. She served 
with distinction and never forgot her Kenny Gray roots.
  Kenny's wife, Toedy, and their family deserve a special prayer and 
thanks from all of us.
  Mr. Speaker, time comes, and time goes--rabid debates, a flurry of 
activities. We always take time out to remember those of our colleagues 
from future generations who are served, served nobly, and then gone 
home.
  I think it is just fitting to remember that we remember those who 
served selflessly for many years as we take up their call to continue 
to do the same.
  It is also important to remember to enjoy each and every day, enjoy 
life, work hard--because everything has its time under the Sun and 
everything is passing. That is why I appreciate the opportunity to 
serve. I love the Chamber. I love my colleagues.
  With that, thank you for this opportunity, my colleague, Mr. 
Schweikert.
  Mr. SCHWEIKERT. Thank you, Mr. Shimkus.
  Mr. Speaker, a couple of weeks ago, I came to the floor and did a bit 
of a presentation of some of the numbers we were seeing on what was 
actually happening in our debt, in our future economic growth, why we 
were so stagnant in today's economy, and the overhang that was, I 
believe, the very thing that was slowing down future economic growth.
  I had a number of phone calls and a number of emails and a few 
comments on Facebook asking for a little more definition, a little more 
presentation. So I thought I would come to the floor this evening, take 
some of this leadership hour, and walk through some of the numbers.
  I have to apologize to everyone right now, I am going to throw out a 
lot of math, a lot of numbers, but you are going to see a theme here of 
what is coming at us, and it is coming at us very, very fast.
  After we do this, I want to do a little talking about a piece of 
legislation that I have that has made it through committee, and I am 
hoping, over the next couple of months, we will come to the floor and 
what that piece of legislation, I believe, means to sort of 
transparency here in our government with the EPA and hopefully as just 
sort of the future of how we deal with data in this Federal Government.
  The chart alongside me--and I know there are lots of lines in it and 
it is hard to read, but it has a very, very, very simple theme--I am 
going to show variations of this on a couple of different boards.

                              {time}  1700

  The red you see down at the bottom is what we call discretionary 
spending. That is what we substantially get to come down and vote on.
  That discretionary spending, if you look at the next decade on this 
chart, basically stays the same. So the military, the Park Service, the 
FBI, education, and these things that are programatic that we come down 
and vote for on the discretionary side of

[[Page 12141]]

the budget are pretty much staying even for the next 10 years.
  Do you see the blue lines? They are just slightly shy of doubling. 
They basically double over the next 10 years. That is mandatory 
spending. That is Medicare, Medicaid, Social Security, interest on the 
debt, veterans' benefits, and now ObamaCare, things that are built in 
by formula. And they grow and grow and grow and grow, and they consume 
everything in their path.
  That is what is going on here.
  When I do meetings back home in Arizona, in the district, you often 
get this question: Why do you all fight with each other? Why do you all 
fuss with each other? And my answer is: It is about the money. And you 
get this look.
  You must understand, we come to this floor and we are fighting over, 
fussing over, in many ways, a shrinking pot of resources, even though 
today we have actually the highest revenues this Federal Government has 
ever received.
  So where is the money going? It is going to that mandatory spending. 
We need to deal with the reality that the mandatory spending--the 
entitlements--are consuming our future. So that is what this chart is 
basically saying.
  We are going to the next chart. The reason I am going to put this one 
up is this is from 2013. So we actually know it has happened. It is a 
closed book.
  If you look at the blue areas, that is mandatory spending. You will 
see Social Security, Medicare, Medicaid. You will see other income. You 
have supplemental programs like food stamps, WIC, and some of those 
types of programs. You will see veterans' benefits down here. And about 
6 percent of our budget last year--our money, our spending--went to 
interest. Thirty-two percent last year is what we, as Members of 
Congress, got to come down here and do policy on.
  Understand that in 9 budget years--and I am going to show you that 
pie chart in a moment. That is 32 percent. In 9 budget years, that goes 
from 32 percent of our spending and collapses down to 22 percent. That 
22 percent has your military, the FBI, the education, health research. 
All those types of things are in that remaining portion of the pie.
  This was something that I picked up several months ago, and I was 
shocked it did not get more discussion here on the floor of the House 
or around here in Washington. Last September, we had the Chief of Staff 
of the United States Army in discussion before Congress talking about 
the future of the Army and what was actually going on. In his quote, he 
basically says that 46 percent of the Army spending today is personnel 
costs, like salaries, pensions, health care. By 2023, 9 years from now, 
it is going to be 80 percent.
  So get your head around this: 80 percent of the Army's spending in 9 
years will be personnel costs. It will not be equipment. It will not be 
things that fly fast and go kaboom or make our soldiers safer. It will 
be personnel costs. In 9 years, 80 percent of that Army's budget will 
be personnel costs.
  You have got to understand the demographic bubble our country is in. 
The fact of the matter is these costs are consuming us. We can have a 
debate of, well, it's uncomfortable to talk about, it's not politically 
correct, when you talk about Medicare and Social Security you can get 
yourself unelected, but if you care about these programs, if you care 
about the social contract we as Members of Congress have with our 
constituents, you need to step up and understand the underlying math so 
you can save them--because it is math.
  Think about if I came to you and told you that 9 years from now, for 
a branch of our service, 80 percent of their money is not equipment, is 
not things that keep the soldiers safe, but it is just going to be 
salaries, health care, and retirement. You need to understand that the 
very thing we are discussing on our overall Federal budget is now also 
hitting Federal employees and our military.
  I am going to rotate to the next board. Remember, this one shows 32 
percent of all of our spending was discretionary.
  This is 9 budget years from now, so it is 2024. Nine budget years 
from now, that discretionary portion falls to 22 percent of our 
spending. And this is still the military; this is still the FBI; it is 
still health research; it is still education.
  So what is happening here? Well, on the previous pie chart, interest 
was 6 percent of our budget, 6 percent of our spending. In 9 years, we 
predict it to be around 14 percent. That is assuming that we stay with 
historic norms on interest rates. If interest rates spike, if we have 
1979, 1980, 1981, or 1982 all over again, our interest exposure 
consumes huge portions of what is left in the discretionary budget.
  You must understand what we have done with the explosion of our 
deficits in this country. We have actually made this country rather 
fragile to interest rate exposure, and something you need to understand 
is we now become more and more subject to the world's interest rate 
markets and our ability to constantly sell more and more of our debt.
  There was something I found sort of amusing, and I didn't bring the 
actual numbers with me, but 2 days ago this administration was 
announcing how happy they were with that the deficit numbers and where 
they were at. The problem was the deficit numbers weren't that 
different from last year, and they were substantially higher than they 
were predicting last September, one more time demonstrating here in 
Washington you can spin almost anything. And if you have a compliant 
press, complicit press--whatever you want to use--you can make it sound 
like happy talk.
  The numbers are not getting better.
  So in 9 budget years, 24 percent of our spending is going to be 
Social Security.
  On occasion, I will have someone on the left who will show up at one 
of our discussion groups, our working groups, or our town halls and 
demand a discussion about Social Security, saying Social Security is 
fully funded. They have all those IOUs in it.
  Here is the basic math on Social Security.
  Social Security is holding about $2.3 trillion of special Treasury 
notes from the Treasury Department. Obviously, the Treasury Department, 
if they were to pay those back--which they will--they have to go borrow 
the money, because they have already spent the money. That is the asset 
in Social Security. Understand, Social Security is sitting on about a 
$24 trillion unfunded liability. So they are holding about $2.3 
trillion in special Treasury notes, and they have $24 trillion in 
unfunded liabilities.
  And this is where it ties in. We talked about this a couple of weeks 
ago.
  At the very beginning of the year, George Mason University did a 
study and put together some data of what would happen if you took the 
U.S. debt, the U.S. liabilities, and put them on GAAP accounting, just 
like your business, my business, just like everyone else where you are 
doing a large public statement and you would have to put them on GAAP 
accounting--what are your liabilities, what are your assets, and if you 
offset them.
  What would you guess the United States shortfall is? On occasion, I 
will hear many of my brothers and sisters even here in this body sort 
of quote the number that you can see at the bottom of the U.S. debt 
clock on the Web site as it is spinning, and they will say things like: 
Oh, it's a $120 trillion shortfall.
  The study at George Mason University came in at $205 trillion, which 
is our honest debt, our honest unfunded liabilities, if you actually 
use GAAP accounting.
  Go to the Internet now and take a look at what many predict, 
estimate, guess is the entire wealth of the world. You are going to 
find out what we owe, what we are going to owe, what we have promised 
is greater than the current wealth of the entire world--every asset in 
the world.
  I will make you the argument that even with the chaos we have right 
now through so many things in this country and so many things I 
actually hold this administration responsible for, the

[[Page 12142]]

President's failure to step up and say, This is the systemic risk to my 
country, to your country, to our country, not dealing with the 
explosion of the future entitlements consumes our future. And it is in 
front of us.
  We knew baby boomers were going to turn 65 for how long? I remember 
sitting in a statistics class in 1981 where the professor was putting 
things up on the board and talking about how much money we would have 
to have set aside in assets as we started to move into the baby boom 
retirements.
  We are now into year three, and my understanding is a typical baby 
boomer will have put in around $100,000, $120,000 into Medicare in 
their lifetime, and they are going to take out $330,000. So they will 
put in about $110,000 and take out about $330,000. Now, multiply that 
shortfall times 76 million brothers and sisters. And we are into year 
three of it now.
  We have known this was coming. We have known this was coming for 65 
years, but it was politically dangerous to talk about. It was 
uncomfortable. It is easier, as you watch the debates here on the 
floor, to talk about today's chaos, today's spending.
  Being able to cover these promises, these social entitlements, these 
social contracts into our future, if you love your kids, if you love 
your grandkids, if you love your great-grandkids that may not even be 
here yet, this is the question I beg of you to ask candidates who are 
running around this country: What are your plans to deal with the 
crushing future debt, the crushing future promises that we have made 
that there is no money for?
  There is this almost pathologic attitude around here of: We will get 
to it one day when we have a Senate that is willing to step up and do 
work. We will get to it one day when we have a President that is 
willing to be honest about the math. We will get to it one day.
  The problem is that every single day that ticks away, the math gets 
worse. A good example of that is 2 days ago, the Congressional Budget 
Office came out with their annual data.
  Remember, you have heard over and over on the media that things are 
getting better, the job situation is better, our numbers are getting 
better. Well, if they are getting better, how did the fiscal scenarios 
get worse?
  Go pull the Congressional Budget Office's numbers that they just put 
out. Our Congressional Budget Office does two scenarios. One is the 
standard and one is called an alternative.

                              {time}  1715

  The standard is basically based on the concept of: this is the law as 
it is today. Here are the numbers that it projects. Of course, you have 
got to understand that the law as it is today has things in it like the 
common vernacular ``doc fix.'' We refer to it as the SGR. It is this 
concept that, in a dozen or so years, doctors are going to take 73 
percent less money--73 percent less compensation--to see a Medicare 
patient. It is implausible. It is not going to happen. Yet here is how 
the scam works here in Washington.
  It is the current law that doctors are going to be compensated this 
much less over the next dozen years, so we are going to calculate that 
as savings all up and down our future budget projections, our future 
debt projections. We have things that are woven into those numbers that 
are fantasy. Go read the last three pages of the Medicare-Social 
Security actuarial report. The head actuary, whom I have never met but 
who I hear is just a standup person, basically says, ``Oh, by the way, 
these numbers are implausible,'' but they are based on current law. You 
will hear debates here on the floor, saying, ``No, the number is this. 
The number is this.'' The number often, if they are using the standard 
projections, is a fraud.
  Then there is the alternative scenario, which may overshoot a number 
on the negative side because it basically makes a projection of: What 
if GDP isn't what we hope it to be? which, as it has turned out over 
the last couple of years, is true. We will be blessed if we can break 
through that 2 percent this year because of what happened in the first 
quarter.
  The alternative scenario is that we hit 100 percent of debt to GDP in 
14 years. How many of you remember what you were doing 14 years ago? To 
help you put it in sort of a perspective, when you get ready to take 
out that 30-year mortgage, understand that less than halfway through it 
your government, your country, is going to be at 100 percent debt to 
GDP. Theoretically, that is when your sovereign debt becomes much more 
risky, and this net interest figure potentially starts to explode on 
you because getting sovereign nations, getting individuals and getting 
investors from around the world to buy our sovereign debt becomes 
harder and harder because we start to look riskier and riskier. If you 
say, ``David, I don't want you to use the alternative number. I want 
you to use the standard number,'' okay. Add 8 years. Add 8 years so 
that, in 2036, we hit 100 percent of debt to GDP.
  We can fix this, and we can fix it in a way that is not terrifying. 
It will be a little uncomfortable, but you will save the future. If you 
are a person of the left and if there are programs you care so deeply 
about, those programs are on the discretionary side of this budget. If 
you are a person of the right or a person who cares a lot about the 
military, that is in this discretionary budget. Every time you talk 
about those programs, you need to stand behind that microphone and talk 
about mandatory spending--Social Security, Medicare, Medicaid, interest 
on the debt, veterans' benefits, and now ObamaCare--because they are 
all on autopilot, and they are consuming everything in their path.
  That is, hopefully, a little more detail of some of the numbers I put 
up a couple of weeks ago. We traditionally will put these slides up on 
our Facebook page and on our Web site so that you can analyze them. If 
you want all of this data and a lot more--I mean, a presentation could 
go on for hours--it is on the Congressional Budget Office's data sets. 
This is the issue of our time. It is that we have made as a government, 
as a people, lots and lots of promises, and we haven't built the 
mechanisms to pay for them.
  With that, I want to move on to one other little thing. Let's take 
these boards down.
  Now, as we get ready to talk about the ``Secret Science'' piece of 
legislation, I show you all of these debt projections and unfunded 
liability numbers, and I am actually more optimistic today than I have 
been at any time in my 3 years here in Congress. Why? If I had gone to 
anyone out there 10, 12 years ago and had said, ``Hey, in 2015, the 
United States is going to become a natural gas exporting country,'' you 
would have laughed at me. Ten or 12 years ago, you couldn't pick up the 
newspaper--you couldn't pick up The Wall Street Journal, Barron's, 
financial news--and not hear discussions here on the floor about this 
thing called ``peak oil.'' The world was running out of energy, do you 
remember? It wasn't that long ago. The world is running out of energy. 
Tomorrow, the next incremental barrel of oil and the next incremental 
unit of fossil fuels that we extract will be less than the day before. 
You all know the problem with that. It was absolutely wrong. As of 
today, we have more known fossil fuel supplies than any time in human 
history, and if we use this the right way, that is one of the legs on 
the stool that is going to support us as we stand up and start to meet 
these obligations that we have made.
  The second thing is much more ethereal, a little more difficult to 
talk about, and that is what is happening all around us. There is this 
hyperefficient economy that is breaking out. How many of you have ever 
ridden Uber? How many of you have ever done SideCar? How many of you 
have ever used that handheld computer you call a phone to buy 
something, to sell something, and to use it in a fashion to do 
something that is so hyperefficient that you couldn't have done it a 
couple of years ago? Please understand. The incumbents, as they are 
often referred to--and it is not competitive businesses. It is 
competitive businesses and incumbent tax systems. If you have a Web 
site that allows you to rent someone's townhouse

[[Page 12143]]

for the week, that becomes a great transaction for you and for that 
person who owns the townhouse, but the municipality and the hotel are 
not happy. The municipality is not getting its bed tax, and the hotel 
with its capital expenditures is not happy, but the fact of the matter 
is that this is an economic transaction that is efficient.
  Over the next couple of years, I believe, in State legislatures, city 
councils, county councils, and here in Congress, we are going to see 
the fight over: Do we regulate the new alternatives you have as a 
citizen to engage in this hyperefficient economy? Do we regulate them 
out of existence? Do we create some concept of, well, we need them to 
have additional tort liability shields or we need to have them engage 
in this part of the tax scheme? A bit of economic chaos is normal. That 
is how you renew yourself. That is how you create the next generation 
of economic growth. We need to embrace it because, if we cannot reach 
escape velocity in the energy renaissance and in the economic 
renaissance, I do not know, mathematically, how we keep our promises to 
so many people in this country.
  A few months ago, I introduced a piece of legislation, and it has 
been through the Science Committee. We gave it the title of ``Secret 
Science.'' I am not sure if I am thrilled with the title, but it is a 
very, very simple concept. The concept underlying it is: Do you make 
public policy and not make the underlying public data available? It is 
a simple concept--public data for public policy. Should your government 
be keeping the data--the underlying data--secret and then create a 
bunch of rules and regulations on top of you?
  It is almost absurd to think we have to create a piece of legislation 
to get the EPA to take its data sets and make them public. There is 
this intense arrogance out there in the world right now, particularly 
at our agencies, of saying, ``David, you have got to understand. Only 
real scientists, researchers who we deem qualified should ever see this 
data. Well, you don't want the unwashed masses to have an opportunity 
to see how we are developing our science and our regulations.'' It is 
absurd. It almost borders on Orwellian as to what is going on in our 
bureaucracies today. They are going to create rule sets that cost 
hundreds and hundreds of billions of dollars and that are going to 
affect how we live in future decades. Yet there is the arrogance of 
saying the young man who is a statistics major, the left-wing group, 
the right-wing research group, the industry group, the activist group--
just someone who is nutty enough to have a great stats package on his 
home computer, who wants to take the data sets and play with them and 
model them and see what is out in the tails and maybe match them up to 
other data sets that someone hadn't thought about--is not worthy. They 
are not worthy?
  Now, it is a personal fixation, but I actually believe that 
transparency is the ultimate regulator in our society. Could you 
imagine if we had gone into 2008 and if we had had transparency on that 
MBS, the mortgage-secured bonds, and had known what the impairment was 
and had known what was actually going on? Would you have had an 
implosion on a single day, or would you have had a couple of years of, 
hey, these are having trouble, these are having trouble; we need to 
mark down the prices? Transparency is the ultimate regulator, the 
ultimate vetter, but it is also the ultimate exposure to bad acts.
  This hit my desk last week. It is a TIME magazine. On the cover it 
says, ``Eat Butter. Scientists Labeled Fat the New Enemy. Why They Were 
Wrong.''
  Now, how many times have you heard the people at your gym, your wife, 
or others saying, ``David, you need to be eating less saturated fats. 
You can't eat that butter. We need to go buy some of that artificial 
stuff''? Now I am looking at TIME magazine's saying, ``Hey, we screwed 
up on the data.'' How many times in our lives do we come here and say, 
``We knew it except for the small problem that we got it wrong''? 
Remember, we all knew the world was running out of energy. ``Well, we 
got that wrong.'' We all knew eating butter was bad for you until we 
knew the data was different. There are dozens and dozens and dozens of 
examples like this around us, but we were so arrogant that we thought 
we understood the data. We thought we understood the methodology. We 
were so brilliant except for the fact that we weren't. We got it wrong 
over and over and over.
  The fact of the matter is--and go back to my energy example of a 
dozen years ago and beyond that--our military policy, our foreign 
policy, our environmental policy, our tax policy was all based on this 
concept that the world was running out of energy, except we weren't. 
How much of our health policy is based on things like this: ``David, 
you can't eat butter''?
  I saw a presentation a few years ago that the government was spending 
this astronomical amount of money to try to keep people from using 
salt. The researcher was presenting salt as only a problem for you if 
you have hypertension, but that is different than the folklore out 
there. How many things have we developed in our folklore that we make 
policy?
  That is why H.R. 4012--it is called the ``Secret Science'' bill--is, 
I believe, so needed. When the EPA takes data, whether it be from 
industry, whether it be from a research group, an activist group, a 
right, a left, an internal--any group--and when they use that data to 
make a policy, to make a rule, that underlying data belongs to all of 
us. It is public policy by public data, and we all as Americans deserve 
the right, if you are so inclined, if you so choose, to sit there, see 
it, touch it, calculate it, crunch it, compare it, understand it. Who 
knows? You may be the researcher who comes out, looks at the data, 
matches it up against other things, and tells me I can eat butter.
  I promise that in a couple of weeks, maybe a month, I am going to 
come back to this microphone, because I have collected an entire binder 
of example after example of what we were absolutely positive about--
what we absolutely knew--and we got wrong, and how so many of those 
things we made public policy on, and we got it wrong.
  My good friend from Iowa (Mr. King) has a couple of other things in 
sort of that same vein that he wants to share, and he may be the best 
person I have ever seen behind these microphones.
  With that, Mr. Speaker, I yield back the balance of my time.

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