America's Budget Woes

Floor Speech

Date: Nov. 3, 2021
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. Madam Speaker, as we get ourselves sort of organized, last Monday, I did an entire hour here on the floor--55 minutes--and we actually did a presentation up and down the budget. Not this budget cycle, but basically what does our country look like over the next 30 years? What is driving the projections of $112 trillion of debt 29 years from now?

Look, it is one of those presentations that is rather uncomfortable for most of us because the punch line is demographics, and that is not what we typically do here. But the reality is, we have a real issue. We are getting old very fast as a society.

Let's do a bit of a reminder here and actually look at the math. We are going to walk through a couple of these that are the same as last week, but the difference tonight is we are going to try to talk about a handful of solutions. There is a big package of solutions, and most of them are really hard and are really going to be cantankerous around here, but there are solutions to deal with.

Let's actually first walk through where we are at today. Once again, I won't worry about 1965 in the mix. It is important that anyone watching this, fellow Members of Congress, understand.

Today, 2021, 77 percent of all the spending that will come from Washington is mandatory. Only 10 percent is defense; 13 percent is functionally what we vote on. I think there is a huge misunderstanding in the public that we march off to Congress and are voting on these $4 trillion budgets. We are not. We are functionally voting on this little green wedge here that is discretionary spending.

So if I came to you right now and said, okay, what is driving the debt over the next 30 years? I am going to show you a number of slides that are going to show the budget is in balance except for two things-- Social Security and Medicare. And it is mostly Medicare.

Social Security is actually quite fixable. There is a number of levers. None of the levers will make anyone particularly excited or happy, but we once calculated we had 24, 26 different levers to make Social Security solvent and keep our promises.

Remember, Social Security and Medicare are earned benefits. It is a societal contract. We have an obligation to be there.

But Medicare is a really tough one, and we need to actually go back to having the honest conversation about what drives much of this debt. Well, if you see here, this is taxes paid in, benefits out for Social Security. You notice they are pretty much in balance. Social Security is a fairly square deal. You get a little bit of a SPIF, on average, for the average American.

Where the numbers get really difficult is the average American couple is going to put in about $161,000 into the part A Medicare, which is only the trust fund for just the hospital portion. The pharmaceuticals, the other doctor visits, the other things are general fund. So when you are paying your FICA tax, you are paying this here.

But that average couple is going to get $522,000 in benefits. So the differential from $161,000 to $522,000 is the driver of the vast majority of U.S. sovereign debt over the next 30 years. It is this differential here. It is not that complicated.

One of the great frustrations here is my brothers and sisters on the left will come behind the microphone and say things like: Well, if we had Medicare for All, or we expanded the ACA, ObamaCare. That is not true. If anyone just takes a quick breath and steps back--and, look, Republicans are guilty on part of this, too. Those are financing bills. The ACA was financing it, who got subsidized and who has to pay. Medicare for All is just a change of who pays. None of that is about what we pay. And the Republican alternative was the same. It was about who got subsidized and who had to pay.

So what we are going to talk about are some of the revolutions in what we pay, changing the cost of healthcare. But we first need to understand the scale of these. Look, this is functionally the same size as we just had, but it is important to understand that for every dollar in, particularly on Medicare, we get $3 in benefits back. And now you start to do that with the demographics of the country.

This is just a graphic. So you see the orange here. That is us just getting old. That is just simply us moving into our benefit years. The green is healthcare costs. We have known people were going to turn 65 for how many years in this country? And we are still avoiding the issue.

But you start to see, when you start to get into the 2050s, this here, your country has $112 trillion of publicly borrowed debt, and 78 percent of that is just Medicare.

This is one of the slides that I actually see in my dreams because, if you understand math, if you are willing to own a calculator, this slide should scare you to death. The purple is functionally the borrowing of Social Security and the interest on it. This is the spending of Medicare and the interest on that.

You will notice in this board here $112 trillion of borrowing, and it is mostly the cost of Medicare and the financing of that. The rest of the budget, if you remove Social Security and Medicare, is actually in balance.

Just a quick aside before the next board. How many times today behind these microphones did anyone come up and say that functionally the greatest threat to the stability of the country is the fact that we have waited so long? We are well into the baby boom moving into retirement, and you start to see the debt curve just explode on us.

So take a look at this board. Now, if you remove the pandemic years here and just functionally look at this 10-year cycle, why this is important--I know there are a lot of numbers and a lot of colors here. This board is basically saying one very simple thing. The vast majority, matter of fact, almost the entire debt for this decade and the decade after that and the decade after that, but for this decade is driven solely by Social Security and Medicare.

Think of that. In functionally 9 budget years, your country is scheduled to have functionally about $2.2 trillion of borrowing, just borrowing every year, and almost all of that just came from Social Security and Medicare.

And look, dear Lord, please don't let interest rates move against us, but you start to actually see the Medicare outlays, the Medicare revenues, and then you get these arguments saying, well, if you would adjust defense. Well, defense is lying down here, and you start to realize--excuse me, the Medicare taxes and those are down here. You start to look at these gaps. This is where we are at.

Sorry, I was skipping ahead a board. If you were to eliminate the entire defense budget--so let's just wipe out the defense budget--you realize it buys you a year or two, but that is about it because this is the projected defense line, and this is Social Security and Medicare where we are going.

You would think, Members of Congress, if you actually cared about keeping our promises that we are going to protect Social Security, we are going to protect Medicare, how come every Member of Congress isn't walking behind this microphone holding up these boards and saying we are going to work on a solution to this? Instead, this is almost toxic around here.

I can't tell you how many Members I run into who say, David, I want to talk about the debt and deficits, too, and the fact that as we grab all the capital stock of the country, and maybe the world, that we are going to slow down the economy, that we are going to be poorer. Poor people will be poorer; rich people will be poorer. The country's productivity will be crushed. Oh, but I can't actually talk about the drivers of the debt.

I am going to actually say there are solutions. There is a way to actually start to take a step back and say, if we are willing to have an honest moment and say, okay, because the vast majority of Medicare is a general fund expenditure, what do we do? It is complicated. There are lots of parts of it.

But let's first understand. There is a rule about healthcare, and this is not only Medicare, Medicaid, VA, and Indian Health Services, but everything. Five percent of the population is over 50 percent of the spending. So if you love and care about people, but you also care about spending and healthcare costs, we need to understand the 5 percent of our brothers and sisters who drive most of our spending but also are the folks often living in absolute misery.

It turns out if you are willing to spend and invest to end people's misery, it ends up being a way you can actually also take on that debt and deficit.

Look, Republicans often come behind these microphones, and we have all sorts of ideas. My suggestion is we do all of them, but we need to be realistic.

Just as some of my Democratic colleagues will walk behind a microphone and say, well, if we had Medicare for All--back to the comment before, it is a financing bill. It doesn't actually change the cost of procedures. Unless they are willing to ratchet down and go into rationing, which they swear they won't, it is just an alternative way of paying for it.

Then we have Republicans who will come here and say, well, price transparency, I love price transparency. But the best peer-reviewed academic studies out there, it is only 0.1 to 0.7 percent improvement on price for healthcare costs.

Now, you still should do it, but if you really want to start thinking about things that drive healthcare costs, what would happen if I came to you and said--you saw in that previous board--what?--it was about $78 trillion of borrowing, just borrowing is Medicare over the next 29, 30 years.

Thirty-one percent of Medicare is just diabetes. Thirty-one percent of Medicare cost is diabetes, and that is just Medicare. We haven't done the math for Medicaid, for Indian Health Services, for VA, for just the general populations.

But it helps you start to think about, okay, we know chronic conditions, 5 percent is over 50 percent of spending. We know in Medicare 31 percent is just diabetes. Maybe we are starting to understand the drivers of what actually consumes our healthcare costs.

My proposal to anyone that is willing to hear is let's actually do something fairly radical--the concept of stepping up and legalizing technology in healthcare but also investing in disruption.

Right now, the left actually has some proposals that would functionally do some weird, quirky things such as, as soon as a drug comes off exclusivity, they are going to start to tax it, and hopefully that taxing actually starts now to move to create generics or force the one over here to become less expensive now because it is all functionally exclusivity off-patent, and I would like radically different thinking.

How about investing in absolutely curative disrupting research in drugs but also technology?

Let's actually walk through something that I find fascinating--and this board is a little hard because there is a lot of noise on it--but 16 percent of U.S. healthcare expenses is people not taking their drug appropriately. Think of that. That is like $550 billion a year. So over half a trillion dollars a year is when someone doesn't take their hypertension medicine and then they have a stroke.

It turns out the fastest thing you can do tomorrow is the technology that actually helps people know that they should have taken their hypertension pill or their insulin at a certain time, the technology-- because this is 16 percent of all healthcare.

If tomorrow you could remind grandma to take her medicines at the proper times during the day, someone with hypertension that they took their pills so they don't have a stroke, 16 percent of healthcare. And we have real simple technologies out there. We have the pill bottle cap that talks to you and reminds you that says, hey, you didn't open me today.

For someone that may have multiple pills at certain times of the day, you actually now have--and there are apparently all sorts of versions of this now--that drop the pill in the bottle and send you a text message, sends your grandkids a text message also to know that the pills are there.

The technology is here, and almost no one ever thinks about personal technology like this as a way to crash the price in healthcare. But it is 16 percent. It is $550 billion in a single year, not 10 years, in a single year. So over half a trillion dollars a year you can strip out of healthcare costs if you could just get our brothers and sisters to take their pharmaceuticals in a way that keeps them healthy.

Now for some more radical proposals, so far this year, there are two papers out, one U.S.-based and actually one Taiwanese-based, but both from very prestigious universities. They appear to be peer-reviewed. We have been reading through them multiple times. We are trying to get other comments. They talk about, hey, there may be a cure for type 1 diabetes. There may be a cure, still has a long way to go, but there actually appears to be some in-lab breakthroughs on type 2 diabetes.

Wouldn't you and I, the left, the right, stop some of the monkey business around here and say if we know 31 percent of Medicare cost-- and we know Medicare is the primary driver of U.S. sovereign debt. It is time for an Operation Warp Speed for diabetes. You don't have to call it ``Operation Warp Speed'' because I know that triggers some folks on the left, but the fact of the matter is a concentration of bringing disruption to cure people to end misery because we have to stop this thought process here of saying the way we are going to end people's misery is we are going to build more clinics so you have more access to a doctor.

My argument is to have the revolution because the revolution is here. Just think, a couple of years ago, we were dealing with the cost of liver transplants for hepatitis C, and then we came up with a cure. We can do this.

Now you start to understand there are clinical trials out there for some new types of stem cell therapy. I read this paper multiple times because it was complicated and fascinating. Stem cell therapy, they worked through the rejection problem, and it appears--at least the early paper--to be a cure for type 1. There is a derivative paper that is out there actually from a Taiwanese university talking about their success in type 2.

It is a different thought process. One of the greatest things we can do for U.S. sovereign debt and not collapsing this society and destroying my 6-year-old daughter's economic future, as well as anyone that is heading toward retirement, is actually how we invest our money today in things that end people's misery, and by ending that misery, all of society as well as those individuals' benefit.

The amusing part is I have been on this floor for several years talking about messenger RNA. Back when we used to call it CAR-T and you heard the stories about taking someone who functionally their immune system, the cancer they had, doing functionally what we now know as mRNA. Well, it looks like the breakthroughs and the fact that we have now turned much of what are diseases into software problems, and this is hard for a lot of folks to think through, particularly in the time where we have those who are very virus and vaccine conscious, but there is incredible hope here.

As you all know, right now going into the field is functionally a vaccine for malaria. Now, it is only about 30 percent, is the data, effective, but when teamed up with some other pharmaceutical, it is like 70 percent. It will change misery around the world.

Well, it turns out, that same messenger RNA goes far beyond COVID. We actually now are starting to understand malaria, a whole bunch of cancers. Do you know one of the published papers from early this summer looks like they think they actually have a cure for HIV? Influenza, heart disease, it is fascinating. But helping the body, actually its immune system, work and rehab the heart. There are some amazing things. You saw the papers earlier this year about cystic fibrosis and thinking we are almost there for a cure.

Remember, 5 percent is 50 percent of our healthcare spending. Maybe it is time to rethink about the world and the fact that we are going to invest in the disruption that is cures that end the misery instead of financing a country where we might actually lower drug costs, but the disruptions, the cures that could come in the future don't show up.

We can show you, in lots of studies, there are multiples out there when we are looking at the Democrats' H.R. 3 that by the end of the decade you actually saw the curve actually go up in healthcare costs because the cures didn't show up.

The other thing, and this is not a particularly great slide, and it is getting a little old, but we have a whole binder in the office of articles talking about algorithms and, in this case, AI being able now to detect cancers very early, and the fact of doing that with this type of technology and technology that you can have at home. You can actually almost have it wearable. You can have it in your own medicine cabinet. Using those types of technologies is also part of our path to crash the price of healthcare.

Remember, we are not going to change the United States getting older fast, the graying of America. But where we can bend the curve, bend misery and also bend the threat of the incredible amount of debt we are building up every single day, it is saying we are all in. We are going to do wearables. We are going to legalize technology. We are going to actually invest.

The fact of the matter is it is happening right now where we are actually seeing countries around the world realizing how big of a problem diabetes is. Now there are awards going out saying, wow, we actually now have lines of research that look like we can finally disrupt the disease.

So, this was sort of the follow-up on last week where we did the whole slide chart of what is actually happening in U.S. sovereign debt and how much trouble we are really in and how fast it is building.

You have to do a whole series of things. You have to grow the economy consistently. You have to manage tax policy. You have to manage regulatory policy in a way that is for maximizing economic expansion. You actually have to deal with immigration in a way that maximizes economic growth. Opening up your border, importing massive amounts of-- let's be brutal about this--poverty where that poverty and inflation are crushing the working poor in this country. The working poor will be substantially poorer at the end of this decade because of these policies. That is cruel.

How about if we had growth? Because growth is moral. So you do these things of tax policy, regulatory policy, immigration policy, and then the financing and tax incentives and the encouragement to do things that disrupt because you could actually do it in both healthcare; you can do it in energy; you can do it in transportation where we can make the future actually pretty darn amazing and actually end a lot of suffering and turns out it is the path that actually bends that debt curve that wipes us out as a society if we don't actually start to tell the truth and deal with it.

There is a path. There is optimism. Every day this place squanders working on the real problems and instead of the insanity of some of the policies that are being proposed today that the economists on both sides say will make the country poorer by the end of the decade, we are going the wrong direction.

Madam Speaker, I hope at least someone out there hears the message that there is a path. It is just getting harder and harder to get there because every day we fall further in debt.

Madam Speaker, I yield back the balance of my time.

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