[Pages H1267-H1270]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       TELL THE TRUTH ABOUT MATH

  (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, this one is going to be a little thick, 
so put on your economics hat, and let's have a ride here.
  On Friday, the Congressional Budget Office responded to a request I 
made in my capacity as chairman of the Joint Economic Committee. I was 
trying to get an answer to whether the economists' projections from the 
Joint Economic Committee are correct. You have to understand that there 
is actually a weird little battle going on here between the Senate and 
those of us in the House and those of us on Ways and Means.
  A number of our brothers and sisters over in the house of lords have 
decided that we have current tax policy from the 2017 TCJA, the tax 
reform, which I was on the committee and was one of the people who 
helped author that, but they expire at the end of this year. They want 
to play this game and say that we are just going to pretend that there 
is no cost, that the law is not the law, that the policy is the law. 
This is when you hear people say, current policy baseline, just do it.
  We have been trying to do the math. The Congressional Budget Office, 
a couple of months ago, actually did a projection saying that if we 
want to maximize economic growth over the next 10 years, what you do is 
extend those tax cuts but pay for them. The basic idea is that by 
paying for them, you don't have government gobbling up the capital 
stack that is used to finance growth, to finance business, to finance 
when you want to buy a truck or a new home or your business wants to 
expand.
  We got an updated letter from the Congressional Budget Office. 
Apparently, it didn't make me particularly popular with a few people, 
which actually provides me a perverse joy. If you read it, in the 30-
year window, it looks like if we do all this without an attempt to pay 
for, if we drive up interest rates by 1 percent, in the 30-year window, 
it looks like you break CBO's budgetary model because you hit 250 
percent of debt to GDP.
  If I am reading one of the paragraphs here correctly, they are 
basically saying our computer model doesn't go beyond 250 percent. The 
point is, you have a government that--here is our baseline. Let's see 
if I can make this make sense. At the end of this fiscal year, $37.2 
trillion is going to be the country's debt. Over the next 10 years, we 
are expected to borrow an additional $22 trillion.
  On top of that, if you play with these folks that say we don't really 
need to pay for things, just keep it going, that is about another $5 
trillion, $5.5 trillion, another $1.3 trillion in interest. Then, if we 
were to be able to make the President's wish list without finding 
offsets or modernizations--and I am going to walk through a whole 
series of things where it is not cuts. It is modernization, legalizing 
the technology that disrupts the costs that makes our society better, 
happier, more efficient. If you were to do all those things without an 
attempt to pay for them, without an attempt to adopt policy to 
modernize the way we deliver services, in the previous 240 years, we 
borrowed about $28 trillion from the public. That is from investors 
around the world, from your pension system, from everything. It would 
mean, over the next 10 years, it pretty much would double. We are going 
to double it or come close to doubling it in the next 10 years.
  That is the perversity of what you have going on around here, yet the 
people coming behind these microphones keep having a wish list and want 
more stuff and more stuff. The people walking through our hallways here 
are in our offices demanding more stuff. They want more carve-outs in 
the tax code, barriers to entry to their competition, or just another 
check.
  I am going to walk through just how dangerous the game we are playing 
right now is because when you look at these charts--this is online. 
Just go on CBO from last Friday and read it for yourself. It is not a 
hard read. Why are my brothers and sisters so terrified to tell the 
truth to the public?
  You have a country--I am going to show the charts--that in about 7.5 
years, we have more deaths than births. You have a country that when we 
get out of the extraordinary measures--remember, right now, we are 
borrowing from our different funds because we are up against the debt 
ceiling. We may be borrowing almost $70,000 every second of every day.

[[Page H1268]]

  For those of you who turn to me and say, ``David, I demand you 
balance the budget,'' I can do it tomorrow. Let's see, if I use the 
2024 numbers, for every dollar we took in tax collections, we spent 
$1.39. Tell me the 39 cents of the government you want me to cut.
  The problem with that math is, when you look at the charts, do you 
see what is in blue? That is everything a Member of Congress gets to 
vote on, defense and nondefense. Your only problem is that it is 26 
percent of the spending.
  If you ask a Member of Congress right now to balance the budget, we 
can do it. We can do it. You have to get rid of all defense, all 
nondefense discretionary. That is basically the Park Service, the EPA, 
all the agencies, and then tell me what portion--because you have to 
pay your interest or you blow up the world economy--tell me what 
portion of Social Security, Medicare, Medicaid, and other things you 
want to hack away at.
  The reality of it is, in this fiscal year, our projection is up till 
the recent--now, we are starting to downgrade our growth. For every 
dollar we take in tax collections, we are going to spend, functionally, 
$1.36.
  Do you understand how screwed--actually, that is a technical, 
economic term--we are when we don't tell the truth about the math? It 
is not fixable, but it is possible to stabilize. We can stabilize this. 
We just have to think and do things that are hard.
  So often around here, the thinking part is complex, and it is hard 
when we have to go home and tell our constituents the truth about math.
  Remember, the math will win. How many of you have heard about people 
out protesting? They are terrified there are going to be cuts. Okay, 
let's actually have a moment of truth about math.

  This was baseline. Over the next 10 years, we were going to spend $86 
trillion. Next 10 years, CBO baseline, we are going to spend $86 
trillion. The reconciliation budget had--what?--$1.3 trillion in cuts, 
and if we got lucky and did everything, you might get to $2 trillion. 
So, we are talking about $2 trillion in cuts over 10 years on $86 
trillion of spending.
  That is what the left over here is losing their minds over because 
they need something. They have lost the working middle class. They have 
lost so many American voters because they no longer trust them because 
they have spent decades not telling them the truth about the math.
  It is not hard, except the problem is 30 percent of that is borrowed. 
People are losing their minds that we are trying to cut $2 trillion on 
$86 trillion of spending. That is what this place has become. This 
place has become a clown show of math.
  Once again, I need to disclose I have had a stunning amount of coffee 
today, so forgive me if I am a bit cranky.
  We were trying to do projections of what our interest coverage would 
be this year. Let's see if I can make this make sense.
  How many of you saw on Thursday or Friday that the Federal Reserve 
actually lowered economic growth for this year and, functionally, for 
the next 3 years? They lowered us down to 1.7, I think. Just that 
lowering, if you do the math on the back of an envelope, it is not that 
hard. It is just a little less than $200 billion of loss of tax 
receipts. If you plug that into our committed spending, it basically 
means what we are going to have to borrow--you may have interest this 
year of $1.1 trillion and a borrow this year when the economy is fairly 
good of $2.2 trillion. One of my folks has a number that it is up to 
2.3, but let's stick with the $2.2 trillion of borrowing in a year when 
the economy is good.
  Think about this. We are functionally going to spend about $7 
trillion this fiscal year. We are going to take in about $5 trillion, 
and this is in a time when the economy is good. We are not in a 
pandemic. We are not in a war. We are not in a recession.
  Understand that when you take some of these charts of interest 
exposure into the future--there is one of my charts that shows, in 9 
budget years, interest, just interest, is over $2 trillion a year.

                              {time}  1715

  Why aren't we running around terrified here? I mean, if you care 
about your retirement--or someone that is crazy, like my wife and me, 
we are older parents. I have a 2\1/2\ year old and a 9-year-old. You do 
realize for my 2\1/2\ year old, when he turns 23, 24, or 25, every tax 
in the United States has to have been doubled just to maintain baseline 
services. This is the morality of this place.
  Look, the last slide I am going to pound on, it is called interest 
fragility. We had Ray Dalio in one of our offices. Those of you who 
don't know him, please look him up. He is the Bridgewater CEO, founder. 
I think he has now stepped down from that. It is the biggest hedge fund 
in America. He happens to have 50 years of being one of the hyper-
experts on interest rate markets and debt markets. He was saying: You 
guys are screwed. You guys have a really interesting problem.
  The United States and other countries are borrowing, bingeing on 
debt. The United States borrows about 40 percent of all the world 
capital that goes into sovereign loans. His argument is: Our problem 
is, there are not enough savings in the world. We are consuming more 
money; it is us, China, Europe. Now Germany is going into the debt 
markets as they are raising their spending caps.
  What happens in the world when there is a shortage of borrowable 
money? Remember, every day when we borrow at $6 billion a day that debt 
has to be sold. Most of it is actually financed domestically, it is in 
this pension, it is in this bank. And then there are the foreigners, 
except the foreigners have been lowering their U.S. debt because they 
are having to finance their own governments.
  You start to look at our interest payments, and there is this concept 
called a term premium. When we make the bond markets nervous, we pay 
higher interest rates. So the clown show will go around and say: Well, 
let's just not pay our debts. Hey, we are up against the debt ceiling. 
Let's just not raise it.
  Okay. Fine. I mean, enjoy your decade of world depression because 
when you collapse the U.S. currency, you also collapse the world. 
Stability is our goal. Stability is how you minimize interest rates. If 
you are financing $37 trillion and another $22 trillion, plus whatever 
else we are going to stack on top of that over the next decade, you 
really want the debt markets to think we are acting like adults.
  In many ways, when you look at these charts and you see our interest 
coverage and how fragile we are, the bond market basically may be the 
greatest influence on this government.
  However, how many people have you seen come behind these microphones 
and talk about debt?
  Yet, the one thing we are not allowed to tell our voters, our public, 
our staff, each other, is the truth about what drives debt. Over the 
next 10 years, almost 100 percent of U.S. sovereign debt issued will be 
to cover interest and Medicare.
  In 7\1/2\, let's call it 8 years, the Social Security trust fund is 
empty. That first year we have to make a decision, are we going to let 
the poverty of seniors double when they get a 21 percent cut in their 
checks? Or how much are we going to raise taxes?
  Are we actually going to do something complex to fix the system and 
make all the adjustments and those things?
  Except the moment you actually talk about saving Social Security, 
they have a consultant on the Democratic side writing an attack ad 
because they care so much more about winning the next election than the 
morality of not doubling senior poverty.
  The brain trust runs around and says: Oh, just raise the cap. Okay. 
Except you just covered 38 percent of the shortfall. What do you want 
to do with the rest?
  Mr. Speaker, 38 percent of the shortfall is our math, meaning that 
first year--so if the trust fund of Social Security is empty in 2033, 
2034 the full year, I think $608 billion was our estimate on that first 
year.
  Think about that. Think about that scale. Then you hold up a chart 
like this. This is CBO's number for the next 30 years. Nondefense and 
defense discretionary actually have a positive balance, meaning they 
grow slower than tax receipts. Medicare and Social Security create $124 
trillion of debt during those 30 years.
  It is not Democrat. It is not Republican. It is just demographics. We 
have

[[Page H1269]]

a saying in our office: debt, deficits, and demographics. Deal with the 
facts. Deal with the math. Tell the truth.
  This place has been so busy spinning stories, though. We were 
listening to the Democrats a few minutes ago tell stories: There is an 
enemy out there. No, these things, we can fix them. We can stabilize 
it. However, so many care so much more about winning the next election.
  The point I am trying to make is: You look at the next 10 years, 
okay, there is growth. Mr. Speaker, 24 percent of the growth in 
spending over the next 10 years is interest, 31 percent of the growth 
in spending over the next 10 years is Social Security and disability, 
28 percent of the growth in spending over the next 10 years is 
Medicare, other mandatory and discretionary grows about 13 percent, but 
a portion of that is actually, I think, defense and other things in 
that. The fact of the matter is your government is an insurance company 
with an army.
  Now, here is the other part that makes doing the math so incredibly 
difficult. Every year there are fewer workers, fewer working-aged 
people to support our older population. This really seems to upset 
people, but understand, look at our fertility, look at our demographic 
charts.
  Go back to 1990, the year we started to roll over. There is a dataset 
out there--I don't believe it yet; I haven't had the chance to try to 
prove it--saying even last year we may have had more deaths than 
births. Okay. You want us to finance pay-as-you-go systems, which is 
Social Security and Medicare, at a time when we have a shortage of 
young people. There is a way to make it work.
  Are you going to allow people like me, people who are here willing to 
think to be able to refine the process, to modernize?

  Look, we will try to touch on this if I have time. Here is the MedPAC 
report from last week. A whole bunch of apparently really smart people 
examined Medicare and walked up and down through the growth in spending 
and what we could do to modernize it and use technology to stabilize 
the prices. On some things, particularly on Medicare Advantage, they 
have hundreds of billions of dollars in here that wouldn't require 
cutting any service, any access to healthcare. It is just using 
technology and modernizing.
  You have got to understand, when we start to look at a chart like 
this, we are functionally here. Let's call it 2024. We have 2.9 in the 
population--there is another chart that is going to scare you even 
more--for every one person receiving benefits. Then you see, it gets 
down to 2 people in society.
  I am going to bounce around just a little bit on some of these.
  When you actually look at the Social Security trustees' data, 
something is happening out there where some of these numbers may be 
much worse than we expected because it turns out people actually are 
taking retirement earlier than we expected, meaning the participation 
in the labor force is actually starting to get soft on the high-skill 
populations, higher income population.
  Actually we had a debate on this one about how upset this would make 
people. Here we are, we are going to start the 2026 budget year. We are 
actually supposed to be working on that budget. Without immigration, 
working-aged people will start to disappear from the labor force. You 
go: Huh? Huh?
  Basically, 2026 is the last year where the age population is 
functionally stable. Then the next year you start to actually fall in 
your numbers of working-aged people in the population. It is 
demographics. It is not Republican or Democrat, it is just math.
  One more chart of this, and then I am going to give you the one that 
scares me the most. This is Social Security and disability benefits. 
Here we functionally are, and let's get about to where we are. Right 
now if you add both those programs together, you have 2.67 workers for 
every beneficiary. At one point, it gets all the way down to just a 
little over two people working for every beneficiary.
  If you actually do the big chart, which is how many people are 
actually in the labor force compared to how many people are receiving 
benefits. Remember, I am not talking about changing people's benefits. 
I am talking about dealing with the reality of our demographics and 
ways we can deal with it, particularly when we start talking about 
healthcare.
  Let's take a look at 2023. Functionally, for every 100 people we had 
working in America, we probably had 36, 37 people receiving benefits. 
Remember, the whole concept of labor force participation. I have done 
presentations here about, functionally, the 7 million--that was my old 
number--of prime-age males that are missing from the labor force.
  What do we do as a society to make it possible to encourage our 
brothers and sisters who are not working to actually get into the labor 
force? Yet, my colleagues on the left say: Oh, you are going to have 
work requirements. You can't do that.
  If you don't do it, tell me how I make these numbers actually work.
  That is some of the miserable stuff. Let's actually sort of walk 
through how I make it work. Okay?
  I have come here and done a presentation showing that if this is our 
demographics, we are going to have to be willing to have a brutally 
honest conversation.
  Let me walk through a concept. Back in the 1970s and 1980s, what was 
the world conflict? It was for hydrocarbons, oil. The previous decade, 
much of the world conflicts were for rare earth materials. I will 
argue, we are in a decade right now where the conflict is for smart 
people, people with skill sets. Yet the United States has barely shown 
up for the battle.
  When you hear President Trump talk about the insanity that we educate 
people and then send them home to compete with us, the President is 
absolutely right.
  We have a whole presentation we have done here showing a talent-
based, a STEM-based immigration system that turns out to be remarkably 
beneficial for tax receipts, for economic growth, and for prosperity. 
It turns out you need that as one of an entire unified theory of things 
to do.
  I want to walk through just a handful of quirky things. When you hear 
people talk about DOGE and how upset they are, one of the primary 
things that is being discussed is that the United States has a handful 
of huge databases. The problem is, they don't talk to each other.
  You saw the story last week of, hey, we just looked at some of the 
Social Security death files. The oldest person in America is, what, 114 
years old? We took people over 114 years old and then wondered how they 
were getting loans at the Small Business Administration.
  Forgive my math. I am doing this from memory from last week. There 
were like 3,300 people who were over 114 years old who got SBA loans. 
Mr. Speaker, $300 million in loans. Can you believe not a dollar has 
been paid back?
  What would happen if there was a way to eliminate waste and fraud 
without an army of auditors, without an army of bureaucrats? It turns 
out it is technology. You actually have to start having your data talk 
to each other. Is it really that scary? The government already has the 
data. Why can't they bounce against each other saying, hey, this person 
is on the death file. Maybe they are not actually applying for a Small 
Business Administration loan.

                              {time}  1730

  Mr. Speaker, some of our Democrat colleagues remark that, oh, waste 
and fraud doesn't really exist except for the billions of dollars we 
are identifying.
  Let's walk through a couple of other frustrating things. We provided 
$42.5 billion for the Broadband Equity, Access, and Deployment program. 
Stick with me on this one. We have spent over $42.5 billion to get 
broadband to communities. Not a single community, not a single house 
has been connected to that broadband; but we spent $42 billion doing 
it.
  Between Christmas and the new year, I took my little girl out on the 
Navajo Reservation. For those of my colleagues who are not from the 
Southwest, the Navajo Reservation is immense. It is bigger than many 
States.
  We chased around, and we met with a number of people who said they 
were tired of waiting. They weren't going to wait another decade to get 
that wire or that fiber, whatever it was, to their chapter or to their 
community so they could get broadband. They were doing something crazy. 
They ordered a satellite dish, and 48 hours later they had broadband. 
They were sharing it with

[[Page H1270]]

WiFi repeaters. For a few hundred dollars, they were fixing something 
that was going to take another decade and how many hundreds of millions 
of dollars.
  Think about adopting technology. Is the morality that we want to 
spend lots of money to actually subsidize these people who should be 
running wire; or do we actually want these communities to have 
telehealth, tele-schools, and tele-monitoring of their lives to help 
them? Adopt the technology. Make it so it is actually useable. Instead 
of saying we will never get that wire out to our rural communities, put 
up a satellite dish.
  Why does this scare people? It is because there is no good lobbyist 
running around here saying: Have ever thought about doing this? What we 
do is archaic.
  Another example is millions of taxpayers call the IRS for help. Two-
thirds don't reach anyone. Think of this. The auditors of the IRS last 
year put out a report that only 31 percent of phone calls were getting 
answered at the IRS.
  Folks are trying to fill out a tax form and give the government 
money. They call and call and can't get the phone answered. There was a 
little pilot program done. It was an experiment. Let's actually do a 
chat, like a ChatGPT, that picks up the phone 24 hours a day, will stay 
on the phone as long as the caller needs, will help them fill out the 
tax forms, will actually email or text the PDF of the form, and maybe 
even send the YouTube video on how to fill out the form.
  Why does this scare the hell out of the IRS? It is because the IRS is 
the second most unionized bureaucracy in the Federal Government. It 
turns out the union loses its mind when we start talking about 
technology to take care of the American people. Wouldn't we like to 
pick up the phone and call, whether it be the Social Security 
Administration or the IRS, and get the phone answered?
  How do I get my brothers and sisters here to help us adopt this 
technology? I have a handful of articles here using AI to functionally 
crash parts of the cost of delivering healthcare. Here is one about 
actually making the environment much cleaner, much faster, much 
cheaper, and actually identifying bad acts with almost no bureaucracy. 
Here we have ability to fix our logistics.
  We live in a time of miracles. When we start to say just our 
baseline, just a couple of the pieces of legislation we have, we think 
we can get $100 billion a year just using technology and healthcare.
  How about another $100 billion to $150 billion to actually step into 
supply chains and these others? With the adoption of technology, we can 
crash parts of the price of this government. Is that a cut? Is that a 
chain saw? It is just doing things that aren't scary.
  Mr. Chairman, the last one I will talk about is in the MedPAC report. 
The majority of Medicare recipients in America now use Medicare 
Advantage. For those of us in the Scottsdale-Phoenix area, we actually 
have a much higher penetration.
  According to the report and even with the adjustment of the portion 
of the population that only takes the Medicare part A, which is the 
hospital portion, the trust fund, and which also runs out in 12 or 13 
years, it is 20 percent more expensive than fee-for-service.
  If we take it back to the fact that when Medicare Advantage was 
designed and it was supposed to come in at 95 percent of fee-for-
service, do that delta. That is approaching $100 billion a year.
  Mr. Speaker, what if we got together--and we have been working on 
this for months and months--and we said we need to align the incentives 
with the insurance providers, with the healthcare providers, and with 
the person receiving the benefits. How about if we make the profit by 
helping the population be healthier?
  A capitated model or something of that nature, which actually I think 
a capitated model makes the most sense, is here is our cost; and we 
make more money by helping our population be healthier than what is 
happening today, according to this report, saying we sign the public up 
and then we spend lots of time and resources to score them as sicker 
and sicker because we get spiffs the sicker we score them.
  Is that a cut? In today's world, when we know diabetes is 31 percent 
of all Medicare spending, let's get the incentives aligned so it cuts 
the cost, cuts the debt, but we end up with a healthier country.
  There are solutions here. The problem is it requires doing difficult 
things and thinking. I beg my brothers and sisters. Let's go do the 
hard stuff. If you have ideas, bring them to us. We are working our 
hearts out right now on everything from technology to auditing the 
Pentagon because we had our eighth or ninth year where the Pentagon was 
not auditable. We are trying to design a talent-based immigration 
system that maximizes economic growth from tax receipts for the 
country.
  How about saving Medicare Advantage for everyone who loves it but in 
a way where it also will provide hundreds of billions of dollars of 
savings? We can do this. We can do this. We just have to do hard 
things.
  Mr. Speaker, I yield back the balance of my time.

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