[Congressional Record Volume 170, Number 67 (Wednesday, April 17, 2024)]
[House]
[Pages H2497-H2500]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  2015
                            MATH ALWAYS WINS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 9, 2023, the Chair recognizes the gentleman from Arizona (Mr. 
Schweikert) for 30 minutes.
  Mr. SCHWEIKERT. Mr. Speaker, we have one-half hour. We have a number 
of different things to make it through. As we know, our running sarcasm 
is that we all work in a math-free zone where we use feelings to make 
public policy and then we wonder what the hell is going on when we 
actually have to deal with the honesty of the math. So let's have a 
little bit of fun with the honesty of the math.
  A couple of days ago was tax day.
  Mr. Speaker, did you know when you paid your taxes that 39 cents out 
of every dollar you sent in was just interest, 39 cents of every dollar 
you sent in, Mr. Speaker, as an individual taxpayer?
  Now, that is the billionaire and that is down to the working stiff 
who actually had income tax, you paid 39 cents of your tax dollars just 
to interest.
  The point, once again, that we are going to go through is 
understanding how fragile we have made part of the American economy 
because of the scale of the debt. Remember, Mr. Speaker, every 110, 115 
days we are clicking off another trillion dollars of borrowing. So yay 
for that.
  We also hit another benchmark. Yesterday, we had $100,000 a second we 
were borrowing. Congratulations, once again. It is the third time--the 
third time outside COVID--when we have clicked through $100,000 a 
second.
  The reason I break it down to a second is: How many people can 
visualize $1 trillion?
  It is hard to visualize 12 zeros, so let's actually walk through 
this. As we are clicking off $100,000 a second, that basically means 
gross borrowing. It looks like it is going to be, if we stay close to 
this, $3.151 trillion, $3 trillion 151 billion.
  Now, why is that a big deal?
  That was yesterday. Today, it fell way down. We are 99,000 something 
per second.
  We were expecting to see the number actually really bounce down 
because what happened in the last couple of days? It was tax collection 
time.
  We are trying to figure out what is going on because these are right 
off the Treasury's website we get every afternoon. You can sign up on 
our website for our office and get something we call the daily debt. We 
will text it to you. We break it down both in gross--gross is all 
borrowing because remember, we borrow from the Social Security trust 
fund and we borrow from the transportation trust fund. We borrow from 
all of those. We do pay interest, and we have got to pay it back.
  Then there is what they call net borrowing. That is where we go to 
public bonds. Many of you saw yesterday we had a bond auction that 
wasn't great at the interest rates we paid, and even if you do the 
public borrowing, Mr. Speaker, we are crossing over $2.8 trillion this 
year.
  So let's process this for one moment because I feel as if I can't 
find a way to get this through people's heads. GDP, now, I believe it 
was yesterday, which is the Atlanta Fed, they have a neat little app 
you can sign up for, they will send you updates and give you market 
predictions on interest rates and these things, but they also give you 
an estimator of what they think the gross national product is for this 
quarter. They had a number of 2.9 percent come out yesterday.
  That is remarkable. The American people should be given a ginormous 
hug for how hard they are out there working.
  Yet, how much of that 2.9 percent GDP growth that was on the Atlanta 
Fed website is because we are spending at this remarkable rate?
  Just as the left used to attack us when we did tax reform, which 
actually has the elegance of being proper allocation, they have been 
spending money at a crazy rate--remember, $100,000 a second--and here 
are some of the other parts of the punch line. I hope I am not throwing 
too much out. Tax receipts so far this fiscal year are up 7 percent.
  Okay, that is wonderful. But we are still borrowing close to $3 
trillion this year. Nonetheless, tax receipts are up 7 percent, and we 
are still having to borrow like that, and Medicare is up 10 percent so 
far this year.
  Does anyone see a problem?
  Part of the point we have got to walk through is how much is on 
autopilot, and we, as policymakers, are terrified to go home and tell 
the truth, or--let's be honest, let's be honest--we haven't told a lot 
of our voters the truth for so long, how do you get in front of them 
and say: It is not foreign aid, it is not waste and fraud, we can't tax 
our way out of this?

[[Page H2498]]

  So I have shown this chart a number of times.
  So, Mr. Speaker, if you look at a chart like this, do you see the 
blue area?
  That is all we get to vote on. We function and only get to vote on 
about 26, 25 percent of all spending, and part of that, one-half of 
that, is basically defense. So if you don't want us to cut defense and 
you want us to maintain that, Mr. Speaker, then you do realize that the 
nondefense appropriations in this place is 12 percent, 13 percent of 
our spending. That is all we vote on. Everything else is on autopilot.
  On my chart here, I have $890 billion as interest, but we already 
know the interest number now looks like it is going to be 1.1. It could 
actually be, if interest rates stay where they have been this week, 
$1.2 trillion.
  One more time, let's do this.
  Medicare will be $1 trillion 450 billion; interest will be $1.1, $1.2 
trillion; Medicare will be 839; and defense will be right there.
  Now, remember, Mr. Speaker, we were just calculating that Medicare 
spending has already moved up almost 10 percent this year. We have 
Medicare coming in as number three and defense coming in as number 
four.
  It is a lot different than the folklore out there in society.

  Part of the point we keep trying to make here is we have made this 
society, this government, and the world actually in some ways 
incredibly fragile because as interest rates move up it is starting to 
consume everything around us.
  So, I have not done this chart in years, but we have updated it. 
Understand, Mr. Speaker, it is a little hard to see. We will put it up 
on one of our websites, but we are right here at 2024. We were supposed 
to only be borrowing about $1.5 trillion this year. It looks like we 
may double that.
  This chart is only a few months old, and it is already out of date, 
but understand it is an interest rate scenario chart. Right now, CBO 
has us at 3\1/2\ percent. Well, we are already over that. At 3\1/2\ 
percent in functionally 9 budget years, we are borrowing almost close 
to $4 trillion a year. I would say that is actually 8 budget years.
  If we go up one full point, then we are well over $4 trillion. If we 
go up to the 5.5, which is historically closer to what we were before 
the fake years of the previous decade, at suppressed interest rates, if 
you do the 35 years before that, Mr. Speaker, even if you take out the 
Volcker years, 5\1/2\ was closer to what norm was, and then you are 
starting to approach in 9 budget years almost $5 trillion in a single 
year interest.
  There is our problem.
  We have listened to speeches already today of people telling us that 
this is a human right and that is a human right. Okay, fine.
  Do you want to think like an economist, Mr. Speaker, or someone who 
believes in fairy tales?
  We actually make public policy here by our feelings and not by facts 
because the facts are uncomfortable, and they don't sound that great on 
campaign stumps.
  I actually originally intended to come here, Mr. Speaker, and just do 
some basic economics charts and then do some optimism of solutions.
  Nonetheless, let's run through these charts, and then we will 
actually talk about the reality that there is hope. There is a way to 
deal with this. It just would require thinking, but we are so busy 
having the drama of: Are we going to remove another Speaker?
  Are we going to knife each other over some foreign aid?
  Understand, Mr. Speaker, I know some people passionately care about 
Israel, Ukraine, and Taiwan. Add up the total amount of money, remove 
the money that functionally comes back to the United States, and you 
are talking about 3 or 4 days of borrowing. People have no sense of the 
scale.
  So, Mr. Speaker, you look at a chart like this, and here is part of 
your classic problem. Remove COVID, that is COVID right there, and just 
look at the basic chart. All we are trying to say is that historically, 
next year a bunch of TCJA, which was the tax reform, expires. Your tax 
rates will go up next year. If you have an LLC, a pass-through, a 
Subchapter S, employee owned, then your taxes go up next year, and that 
is already based in this number. We still functionally get a little 
less than 18 percent of the size of the economy in taxes.
  Nonetheless, the blue line going up, that you have got to understand, 
Mr. Speaker--and I know it is a 30-year chart and nobody wants to think 
about a 30-year chart--but this is the crisis: tax receipts stay stable 
as a percentage of the economy.
  So I have already brought charts here before that show: hey, here are 
times when we have had remarkably high marginal tax rates, here are 
times when we have had really low tax rates, and you get this 
percentage of the economy that always sort of falls in between, about 
17 to 19. It is always right there in that bandwidth.
  So the secret is: have a bigger economy.
  Understand, Mr. Speaker, over the next couple of decades the 
Congressional Budget Office has a number where we are saying, hey, 
2054--that is a long time from now. What is that? It is 28 budget years 
from now. Mr. Speaker, 31.9 percent of the economy is in spending, but 
tax receipts are still projected to be about 17.9, 18 percent. So the 
tax receipts stay level, but our spending--what is the primary driver 
of spending?
  This is the thing we share, at least I share, that gets you 
unelected, but it happens to be true. From today through the next 30 
years, 100 percent of growth of borrowing--and most of the growth is 
spending--is demographics. We got old.
  The fact of the matter is that when I was a kid, $5 to $6 was spent 
for those under the age of 18 and for every $1 a senior. Today that is 
reversed. Today we spend about $5 for a senior for every dollar we 
spend for those under the age of 18.
  It is demographics. There are different population dynamics. Then the 
healthcare costs, because if Medicare is going up just 10 percent so 
far this fiscal year, then you have to see what the numbers look like 
over the next decade--particularly baby boomers--as what is it, close 
to some 70 million of us age.

  So if we had a revolution in changing the cost of healthcare, which 
we have written about and actually have designed ways to do it, but you 
couldn't get a hearing around here because there are too many lobbyists 
running up and down the hallways saying: That will affect our business 
models or that will affect the bureaucracy.
  The bureaucracy has its own lobbyists here.
  Math will win, but this place will still curl up in a fetal position 
of fantasy.
  One more time, it keeps ticking away from us.
  Remember, Mr. Speaker, 1 year ago we were estimating and saying: oh, 
yeah, this 2024 budget we will only borrow about 1.3, then it was 1.5, 
then maybe 1.6. We are looking at numbers now of what the public 
borrows, that means selling bonds, it is 2.8, the total borrowing now 
is approaching--and this is from the Treasury. This isn't from my joint 
economic economists or Schweikert's brain. This is from the Treasury's 
own numbers. They are at now $1,1436 trillion in interest this fiscal 
year, and this was put together before the most recent pop in interest 
rates.
  So I have said this--and this seems to upset some folks--Congress has 
made a governing decision, and it is not a governing decision of 
whether we want to go through the chaos of removing another Speaker or 
the chaos of letting the Democrats have more power around here. It is 
the chaos that we have made the decision that the bond markets are in 
charge of your country.
  If we have a failed bond auction, Mr. Speaker, do you understand the 
cascade of hell that happens in this country and around the world?
  So it is our moral, fiscal sanity and economic obligation to 
demonstrate to those who are willing to buy our country's debt that we 
are adults, that we understand what is going on, we understand our 
demographics, and we understand our earned entitlements that we have 
got to pay.
  How are we going to pay them when functionally the taxes you just 
paid, 39 cents out of every dollar you paid, went just to cover the 
interest, and it will be worse next year?

                              {time}  2030

  We live in a country where we have made the decision to put the bond 
market in charge of our country because

[[Page H2499]]

we are too much of a wimp to tell the truth. For those who are going to 
say: Well, Schweikert, if you would just vote against this or that, and 
we don't understand those are rounding errors.
  The scale, this is not today. It is as we move over the next couple 
of years. The scale of borrowing is structural. It is what we are 
demographically. Heaven forbid, in 8 years, 9 years when the Social 
Security trust fund is exhausted--to my Democrats who get cranky and 
say we can't use the word ``exhausted,'' that is what the Social 
Security actuary report, if we actually read the math, actually says. 
They use the word ``exhausted'' because it is gone.
  At that moment, we get a 25 percent cut in our Social Security check, 
and we double senior poverty in America. Yesterday, we had a Social 
Security Subcommittee hearing in the Ways and Means, and one of the 
members--I think Jodey Arrington gets credit for this--asked a simple 
question: For Democrats, how many would support policy changes and 
raising taxes? Nope. They only want raising taxes.
  Over here, the Republicans said: We have to do everything. At least 
the Republicans on the committee and the Republican witnesses told the 
truth. The Democrats are so locked in that there is this fantasy, and I 
have shown the charts over and over. The caps can all be raised. If no 
benefits are given, the caps are raised, so Social Security is 
functionally turned into everything that FDR swore it would never be. 
It is functionally a wealth transfer system. It only covers half, at 
best, of the shortfall.
  When you hear people say: Well, we have a solution. We are going to 
fix it through tax hikes. You do understand that what the fraud is, to 
be able to close the gap, you have to tax unrealized capital gains all 
up and down the economy.
  We are still trying to figure out what Democrats mean when they say 
that because we are walking through the details in their proposals, and 
we are having trouble making the math work.
  You have a house. You have a building. You have a retirement account. 
You have investments. Do they get to come in and take 12.4 percent of 
everything you gained that year, because that is the only way you start 
to cover these scales of shortfall. The first year, 2033, first year 
Social Security is empty, the shortfall is $616 billion.
  Every dime of Defense is in the $800 billion range. Do you understand 
the scale of what is coming at us? Look, I have already done these 
charts before over and over saying: Hey, here we are right now. We are 
actually a little higher. This is interest rates. We are probably at 
3.6 now. We are going to go higher with the recent bond auctions.
  Here is what we were during the 2001 to 2022, sort of the suppressed 
years of the Federal Reserve, suppressing interest rates. However, when 
we go back to 1975 to 2001, understand what the average interest rate 
was on U.S. sovereign debt. It was 3.5 percent.
  I just showed a chart a moment ago that said we are almost at 
Armageddon if we go to 5.5. So don't think it is some sort of crazy, 
dystopian fantasy, oh, you are never going to get that high. Our math, 
we are not even going up to what the historical average was. However, 
we want to live in a fantasy world.
  This is another chart trying to show where interest rates are and 
where they are going.
  I wanted to do this one again because I had someone that was looking 
at the video on YouTube from last week's floor speech, and I used this 
chart, and we had a misunderstanding, so I want to walk through it 
again.
  This line here is Social Security. This line is Medicare's spending 
as a percentage of GDP. Understand, one of the key differences in 
Medicare is there is a trust fund, but it only covers maybe 30, 40 
percent. It is the hospital portion. The rest comes out of the general 
fund.
  Social Security, even when the trust fund is exhausted, 75 percent, 
and then it falls to 70, and a little bit less of that comes from your 
taxes.
  Right now, for every dollar you pay in, they basically take that, and 
they put it out the door, and then they reach over and cash in a little 
bit of the special trust bonds, T bills, Treasury bills they have, to 
pay out, and that is what is exhausting the trust fund.
  When you see this, this is not borrowing, but spending, according to 
GDP. What is fascinating is, sometime in the next decade, you actually 
have Medicare taking more of the total economy than Social Security.
  However, the thing that I was surprised no one noticed, if Medicare, 
functioning in the 30-year window, gets as high as 6.9 percent of the 
entire economy, and then Social Security is another 5.9 percent of the 
economy, that is just the two earned retirement programs.
  Start to think about that. If that is consuming that much of the 
entire economy, how do you pay for the rest of government? How do you 
pay for military? How do you pay for anything else? You start to 
understand how, very quickly, the government spending starts getting 
around 31, 32 percent of the entire economy. That is actually 
calculated on last year's interest rates.
  Think what those numbers will be over the next few months when we 
update them on what happens if the interest rate environment goes back 
to normal.
  Social Security Subcommittee yesterday, the Democrat solution for 
Social Security was: Well, we just need to tax people more.
  The problem is, of the crisis that we are on the cusp of, two-thirds 
is healthcare, one-third is Social Security, and the Social Security 
trust fund still has another 8 years or 9 years.
  When we did tax reform, a dirty little secret that the Democrats 
never want you to hear: The top income, so the top 20 percent of income 
earners, do you know they actually, today, pay a higher percentage of 
Federal income taxes than before tax reform?

  The U.S. tax code actually got more progressive. Now, a lot of that 
was because the bottom quartiles, we almost removed from paying income 
taxes. Now, they still pay payroll taxes. They pay into their Social 
Security. They pay into their Medicare. They pay into their 
unemployment. However, from the income tax standpoint, if you take a 
look, the bottom quartiles functionally pay nothing. The top 20 percent 
today pay 70, 71 percent of all taxes.
  I will do more of this in a future speech. I want to go through these 
fairly quickly because I want to end on something that is a little more 
optimistic than some of these more dystopian numbers.
  Social Security faces a $39 trillion shortfall over the next 30 
years, $36 trillion if subtracting the trust fund. Therefore, 
functionally what we are saying here is this is income. Payroll taxes 
and benefits, the red. You see the little green part here? That is 
actually up to the moment; the trust fund is exhausted. That is the 
interest we get from the general fund. The general fund borrows the 
money; we pay a little interest back.
  See the purple here? That is how much is going out the door.
  See this up here? That is the interest covering if the general fund 
covers the shortfall. These numbers are so stunningly ginormous. A word 
my 8-year-old likes to use, ginormous.
  When you think about this, if Social Security itself has a structural 
$36, $39 trillion shortfall, what happens when I come to you and 
explain Medicare, $80, $90 trillion shortfall? Actually, I think it is 
closer to 90-something now. That is, when you add in the interest, 100 
percent of all the debt from today through the next 30 years.
  I just meant to show this to try to make the point again. It is 
sometimes like talking to a Golden Retriever. They are adorable, but at 
the end of the day, they are still adorable and didn't really 
understand a word you said.
  Some of my Democrat colleagues, when you walk through saying here is 
your proposals of raising the cap on all taxpayers and what the outlays 
are expected on Social Security, that it doesn't actually close the 
gap. One more time. This chart does it by percentage of GDP, but let's 
conceptually one more time process this.
  The trust fund is almost gone. You basically say: Everyone now pays 
12.4 percent. You pay 12.4, and that is your Social Security tax. You 
give no benefits, no additional benefits for the folks over the cap. 
You covered, to be generous, 50 percent of the shortfall, and you 
basically have chewed up all the potential taxes that you needed to

[[Page H2500]]

shore up Medicare, and there becomes the math problem. To be honest, 
you will almost never see someone from the left saying: Well, to save 
Medicare and Social Security and a couple of these other programs they 
care about, here is the scale.
  You even saw the President stand behind that microphone here at the 
State of the Union, and you noticed he only talked about the Medicare 
taxes, and that didn't solve the problem. It just shored up part of the 
trust fund for a little bit. Still, the vast majority of spending comes 
out of the general fund.
  Look, we have come here repeatedly and said: There are solutions. We 
actually, several months ago, wrote an entire chapter in the economic 
position of the Republicans on the Joint Economic Committee, and I 
thought I was going to get absolute hell for it because I stood on one 
of the third rails of politics. I had five economists work on a paper. 
It was a whole chapter in here, chapter 3, and we talked about what 
would happen in society if we took on obesity.
  It turns out the single greatest thing you could do to lower the debt 
of the United States, produce growth, family formation, all those 
things, originally, we were coming up with 5 trillion, 7 trillion. We 
are right now doing the math updating that chapter.
  It turns out--I am not committing to it because we still have weeks 
of math to do--it could be $9 trillion over the decade. The single 
greatest thing we can do to save this country and start to stabilize 
our debt is actually moral. Let's give our brothers and sisters the 
opportunity to be healthier. There is a way to do it, Mr. Speaker.
  Maybe I should stop coming and doing the dystopian anger about people 
not wanting to deal with the realities of the math, and I will try to 
spend a little more time talking about the fact there are solutions.
  And, with that, Mr. Speaker, I yield back the balance of my time.

                          ____________________