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Mr. SCHWEIKERT. Madam Speaker, there are so many things we all want to talk about and share, and sometimes, as Members of Congress, we run in front of microphones and sort of do the shiny, loud object of the day because, let's face it, that gets us retweets and Facebook and those things, but they are often trite. So I have a handful of things I want to walk through, but there is going to be a constant theme here.
I am not trying to be mean, but the thing is--and my facts will back me up--that the Democrat policies, if you look at particularly the last 12 months, have made life more miserable for Americans, have made the working class and the poor working class poorer and actually are crushing hope.
I want to walk through a couple of economic things. I am blessed to be the senior Republican on the Joint Economic Committee. There is a handful of economists that work on our side, and there is a handful that work for left side. We have been digging and digging and digging, trying to understand the inflation data, the amount of cash chasing goods, and what is happening in productivity. I hope I am wrong, but I am starting to see numbers that look like we are on the cusp of a wage- price spiral.
Let's sort of walk through our basic economics. You all remember your high school economics class, particularly those of us who are old enough to have been in high school at the end of the 1970s. Businesses raise prices because their costs are going up. Typically, just like we were doing right now in the new year, people are getting their wage hikes. Most of those wage hikes are nothing more than to keep up with inflation, so you end up with this spike.
There was a handful of folks on the Democrat side that were saying to look at the December number; it wasn't spiking as much as the previous months. Wait till you see the January numbers when the wages come in, and then you end up with this world saying now businesses, organizations, government, others, have to keep raising their costs, raising their prices, raising their taxes, others, to keep up because they just had to raise wages, not for our brothers and sisters that are out there working to live better but basically just to be able to purchase the same things.
Except at the end of 2021, Americans were poorer. The fact of the matter is, the average American fell about 2.7 to 3 percent poorer because inflation grew faster than their wages did. But there are lots of things in the economic literature--and I know I am geeking out a little bit--that you start to end up in this seesaw effect, what they call a wage-price spiral. Businesses keep having to raise their costs because now they have to raise the wages, and it becomes a very, very ugly circle.
A bit of trivia. How many of you here would immediately say to go back to the 1980s, particularly the early 1980s? It was Paul Volcker jacking up interest rates to just extraordinary levels that squeezed out inflation. That is actually only part of the story. If you actually look at the math during that time, there were the Reagan tax cuts, the first round of them. They created a great spike in productivity. Because one of the things inflation is, is I have too much money chasing too few goods, so raising interest rates, making everything more expensive, still doesn't do anything to make sure you are making more goods, more services, to fill up that vacuum to remove that inflationary pressure.
You actually even see some of that data after we did tax reform here at the very, very end of 2017, when you saw the spike in productivity. You saw a pretty impressive spike for 2 years of wages and actually falling inflation. Why was that? It is because expensing and other things we did in tax reform, repatriation, getting hundreds of billions of dollars from around the world coming back into the country, actually raised productivity and lowered prices. That is the holy grail. Right now, almost every policy that the administration and, I hate to say, this body is engaging in is counter to that.
We are going to walk through a couple of things here, and our argument is really simple. Almost every major policy set being moved forward--and I don't think it is purposeful; I think it is a misunderstanding of the most basic economics--that my Democrat brothers and sisters are doing is actually making life more miserable. I don't think it is purposeful, but it is economics.
Let's walk through the facts, just the actual math. I know this is always uncomfortable, but if you actually look at the data that came in, when you look at the expenditures--because I am using this slide. This is actually a 2019 slide, but it is important to set the base. Our brothers and sisters who are in the lowest quartiles--and I hate that term, but it is what we use in economics--dramatically more of their income goes to pay for housing, dramatically more goes to pay for their transportation and food. Those in the upper incomes, that is not where they live.
Think about what has gone on in this last year. Most everyone who is in this room, probably most everyone who is watching this, we are the people who have savings. We have retirement accounts. We have 401(k)'s. Life has gotten more expensive for us, but how many of you have a home that has gone up dramatically in value? Think about those lower income quartiles, that working poor, that middle class, that lower middle class. Do they have a home? Are they renters? How much of their cost is their transportation or just trying to provide housing? What we have allowed to happen inflation-wise is just brutalizing them.
When you actually start to understand what the policies from this last year have done--and I am going to show a number of these things, showing that the left's policies are actually crushing the poor, the working poor, and the middle class.
The difference here, when you see this type of graph, is we are trying to sort of demonstrate that it is both the effects on populations where you are income-wise--if you are in this lower income, how much more the cost of your life is because of inflation. This is almost just a pure demonstration of who benefits and who doesn't benefit.
If you are a homeowner, if you are someone with lots of assets and the stock market has been really good to you, you have come out ahead. If you are like most in the middle class and lower, your standard of living has gone down.
There is this rule of thumb from the top line. What are the two things you do to make the working poor poorer? I have said this dozens of times behind this microphone. It is inflation, and it is opening up the border.
There is this economic theory--and this is actually old literature. It is like 20 years old, and it actually had a number of left groups as part of the authors who basically said if you look at the working poor, a population who probably didn't finish high school, what they sell is their labor, their willingness to work, their willingness to sweat. What happens when you flood your society, functionally, in 1 year, with a couple of million people with similar skill sets? It is just basic math. You functionally have devalued the value of their labor. You have given them the double whammy. You have created inflation, which affects the poor and the middle class more dramatically.
You saw from the first chart how much more of their resources go to pay for housing, to pay for transportation, and to pay for food. Now you make them compete against a couple of million people with similar skill sets. These aren't IT jobs. This isn't someone who is at the top of the wage scale and creates a multiplier of productivity in society because they are inventing some new app. This is the person who is hanging drywall, working their hearts out. It is a tough job. Their back is aching at the end of the night. Now they look out and there are a couple of million other people in society with similar skill sets.
It is a level of misunderstanding. Some folks will come behind these microphones and pretend they are being compassionate, not understanding the cruelty of inflation and having an open border and how many working poor are getting crushed by this.
I want to go a bit further. As you start to look at the inflation level, you have to understand--7 percent was sort of the national number, right? In markets like mine, in the Phoenix area, we were at 9.7 percent inflation in 2021. A lot of that is because I am from a growth area. Lots of people are abandoning California and Illinois and moving into my neighborhood, so much of my inflation is actually housing.
We have already heard other people come behind the mikes, even today, and talk about the cost of housing. Well, congratulations. In other parts of the country, it is not 7 percent. In mine, it is 9.7 percent. When we look at the charts and the details, it really, really has hurt the working poor, and they are having trouble finding the most basic accommodations.
Then we start to dig in more. The economists have made it very clear that what was allowed to go on in 2021--the economics warns of inflationary inequity. The details are pretty clear. For those who have assets, you are going to do okay. If you are part of half of America who doesn't have those few thousand dollars in the bank or owns a house or has other assets, you have become poorer. The policies are making you poorer.
I know this is uncomfortable, but you can't keep campaigning and doing politics and saying, ``We care about the middle class, and we care about the working poor,'' and then keep adopting policies that make them poorer. At some point, the math always wins. Not the virtue signaling, not the rhetoric, it is the math. We are making half of our country poorer.
One of the other projects we are working on in the Joint Economic Committee, and a couple of us on the Ways and Means Committee, is also trying to understand what other attributes there are.
I can keep coming to the microphone and talking about the open border, and we have an administration that doesn't seem to give a darn because it is political. Their base has no trouble with a couple of million undocumented folks coming into the country.
Inflation is really, really ugly because the math is brutal. Do you have any sense how high interest rates have to go to squeeze out this inflation? I think there is this fantasy that four marginal rate increases this year somehow are going to tap down inflation.
I will make you a crazy--actually, it is not crazy; it is based on math. At the final quarter of this year, you may be seeing 10 percent inflation. I hope I am wrong. But I was in front of this mike a year ago saying I think we will be close to 7, and I actually underestimated it.
Going back to my opening comments, I really, really, really see in the numbers that we are on the cusp of a wage-price spiral, and four marginal quarter-point increases in interest rates ain't going to cut it unless Congress dramatically starts to think about policies that spike productivity. Except you have a left that now has an article of faith that tax reform, that expensing, these things we did in the tax code to bring hundreds of billions of dollars back into the country to get organizations to invest in plants and equipment to make workers more productive so they could be paid more--well, we can't do that. Except even the liberal economists agree it worked. It turns out, you need to be doing things like that.
The left's Build Back Better social spending bill, because it delinks money, transfer payments from work, every dataset basically says it will continue to spike inflation. At the end of 10 years--I came here with the paper. It makes it very clear. At the end of 10 years, the working poor are poorer because of the way the left has designed these transfer payments without an expectation of participation in society and work. I thought we learned this 25 years ago, but somehow math is heresy.
So let's go. What are some of the other attributes that make our brothers and sisters in that lower middle class, working poor, in many of our neighborhoods, what else makes them poor?
We have touched on inflation. We have touched on flooding society with millions of people with similar skill sets. When was the last time we had someone remind us about the concentration of crime?
For most of the Members in this body, we don't live in neighborhoods that are going to be subject to crime. How many Members here live behind a gate? How many Members here have security?
I did a ride-along for 4 hours on Monday through north central Phoenix in neighborhood after neighborhood after neighborhood. The officer I rode with had almost 28 years on the city of Phoenix police force, and the most disadvantaged neighborhoods had the most crime.
Okay. There is an assault here. You see the person in that apartment, he is a drug dealer. You are realizing, it is the folks living in poverty who are in the core of the crime. And then the left takes a position of basically having verbal violence toward law enforcement.
But we know the data says, if you look at the concentrations of poverty, one of the attributes that makes someone poor is when someone comes and steals their stuff. You are trying to work; someone steals your tools. You are trying to survive; someone breaks into your car or steals your automobile. It is another attribute that once again the left's policies are this constant economic violence on the poor.
And then you start to go on another thing we are working on. This one is much more complex, but it is starting to prove the theory is true. How many of you have ever heard the discussion about health disparities? Urban poor, my Native American populations, even rural poor, there are health disparities, and it is absolutely true.
Our brothers and sisters with renal failure, diabetes, these things, who are concentrated, we can almost draw data circles around them and say, look at the income inequality of this neighborhood to a neighborhood that might be just down the street.
We have been trying to understand what the attributes are. Oddly enough, some of the attributes aren't race. They are health. They are crime. They are education. But the one that no one here has focused on is actually health.
If you ever get a chance--and this is for anyone who is listening-- try to find the data of those who are suffering type 2 diabetes and the concentration. Go find a heat map. It becomes a really interesting discussion because what I am making as my fourth attribute is our brothers and sisters who are sicker.
So the left's attitude is, well, it is good politics, we will just put up a bunch more clinics. We will help them manage their diabetes. Okay. That is an honorable thing. Wouldn't it be much more compassionate to cure, to disrupt?
So we do know, because it came out a year ago, but it is as if no one actually read it. We actually have the paper that was put together, a working paper series from the Congressional Budget Office. It was functionally some of the data within the Democrats' H.R. 3. If you actually dig through the numbers within their working paper, it makes it clear that the Democrats--it is great politics--hey, we are going to lower drug prices. But the way they go about doing it a decade from now, so many cures don't come. And as the paper talks about, it is the very cures for things like potentially diabetes and other ailments that are concentrated in our poor population.
So it is functionally the left's policy on something like H.R. 3-- because if you think about their pricing mechanism where if a drug costs more than this amount of money, you can't have it. It is once again policy that says, we are going to find a way for you to live with your misery, but we are going to make living with your misery a little cheaper. Then I think the thing that is loving and more compassionate is we are going to find a way to cure it. It really is a different mindset, and that isn't Republican or Democrat. It is just compassion.
But it may not be great politics because the fact of the matter is, if you look at the mechanics within H.R. 3, the Democrats actually make Big Pharma more profitable and bigger and more powerful, and they wipe out the disrupters, the small biologics, the small pharma that is actual chewing away their book of business because they are curing the disease whereas Big Pharma over here is just maintaining it.
It is the classic economic irony of this place acts like a protection racket. We give great speeches about how we are going to do this, and then--wink, wink, nod, nod--what actually is happening is you are locking in someone's oligopoly.
Once again, if you go through the paper, it makes it really clear that the first couple of years there is not much difference because it is what is already in the disruptive pharmaceutical pipeline. And we have done presentations here of 100 new are-under-research and only a few actually succeed. But in about 5 or 6 years you start to see a collapse of those cures. Welcome to Democrat policy once again.
We have come to the floor multiple times with H.R. 3. We have made a number of people very angry by referring to it as the Big Pharma protection act. But the math is the math. And now you still have additional CBO studies that make it clear we are telling the truth. It is what it is.
We have actually made proposals to our brothers and sisters on the left saying, we both are enraged at the price of pharmaceuticals. Believe it or not there are other ways to get there, and one of the most magical things we could do for society are also some of the kickers to make sure there are capital stacks and these other things that are a little geeky, but ways that that investment goes into the cures.
So when you have things like a single-shot cure for hemophilia--I did this presentation back in December. We have a proof of concept of a cure for type 1 diabetes. Starting out, these are going to be really expensive, they are going to be really difficult until we functionally turn it into a biofoundry, and you build the capital stack, the Tax Code, the incentives to do lots of that. But I can show you in chart after chart, it saves society, it saves taxpayers a fortune in the future.
Remember, last year's CBO math said in 29 years we are $112 trillion in debt in publicly borrowed money in today's dollars. So that is inflation-adjusted dollars. And we know that number is going to spike once we get the math from this last fiscal year plugged in there. About 75 percent of that spending is just Medicare, that debt is Medicare. The other 25 percent is Social Security.
The most powerful thing you can do for U.S. sovereign debt is disrupt the price of healthcare, and our argument is, the greatest elegance is actually doing it by making people healthier.
There is one other thing I want to throw in my frustration of Democrat policy. My expertise is more Arizona and not the rest of the country. We have seen the debate around here, lots of flowery words, and almost no detail of the reality of what is underlying the piece of legislation.
Our friends on the left will come behind the microphones and say it is a Voting Rights Act. Okay. How is giving a politician six to one--so you give me $200, and the Treasury is going to multiply it by six times--defending democracy? Or is that, once again, the left being so much smarter than Republicans are on how to try to stay in power?
How about some of the other things that are in the Democrats' H.R. 1 and H.R. 4, their Federal election bill?
My theory is a little different than other folks. It is just a blatant power grab. It is not a power grab for the Federal Government, which it is that, but it is much more than that. It is a power grab by a party that basically is trying to design the election code to fit their fund-raising model, their campaign model.
It does other things. Like down here, my State for functionally 18 years has had voter ID laws. Every dataset out there says you can't find a differential of populations not being able to vote. Matter of fact, I think in my State some of the underlying data is African- American females have the highest participation. It is actually White males, particularly White rural males that have some of the lowest participation and some of my Native Americans. But that doesn't meet the folklore that we get from our brothers and sisters on the left.
Think about this--and this is the circle I want folks who are paying attention to get their heads around--how it works. So the Democrats push a voting rights bill, but it is really about voting mechanics. And what they do is they say, Hey, we are going to have same-day, automatic registration, and then we are going to legalize, industrialize ballot harvesting, and then at the same time we are going to do this they also are allowed to have, if you give them money, they get six to one. So why would you do that?
Well, first off, as in California, the Democrats have built a huge infrastructure. If you run for Congress, you actually take a substantial portion of your campaign money and hire firms that go knock on doors and harvest ballots. It is now a campaign mechanic.
Well, what happens if you hire lots of people to go walk through that massive apartment building or this and that and knock on the door and say, Hey, I will register you right here, let's do your ballot. That is functionally what they are doing in this legislation.
And the beauty of it, it will ultimately be taxpayers who will be financing it because the left, to their credit, has spent about the last 15, 20 years building an online contribution system. And here is the kicker. That online contribution system has trained contributors to the left, contributors to Democrats who say, don't give one person this much money, give 10 people this much. And it is as if it has always been laid out the same, and--wink, wink, nod, nod--one day we are going to set up a public funding system so your $25 contribution or $200 contribution gets multiplied six times.
You have got to give the left, the Democrats credit for their, just, audacity. And then to call it a civil rights voting bill when, when you break through its mechanics, it is about power, it is about power and control. That is what this is.
The other beauty is handing the bureaucracy here in Washington, D.C., the functionality of saying they can tell my State of Arizona what is allowed and what isn't allowed.
We have a family saying that goes, money, power, vanity, but most of the time it is about the money. In this case, I have got to give the left credit. They hit all three in the same piece of legislation. It becomes about the money, it becomes about them keeping the power, but reality has almost nothing to do with fairness. It is about the fear that the public understands how much of the left's policies have been crappy to them, their families, this country. The mechanism they are going to try to keep in power is to functionally have us finance their elections and allow them to industrialize the very bad acts that so many of us worry about.
Madam Speaker, I think I feel a little better getting some of that out of my system. I yield back the balance of my time.
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