Math Reality

Floor Speech

Date: Dec. 15, 2022
Location: Washington, DC


Mr. SCHWEIKERT. Mr. Speaker, we are going to continue sort of a theme that we have been working on, and it is fairly simple, yet the solutions are really complex.

First is trying to get a reality on what is going on with the math. I am a broken record. I absolutely am, but we are going to walk through this again.

Doing this a week ago, we actually did a whole bunch of technology disruptions that would crash the price of healthcare, that would clean the environment, that would make bureaucracy much smaller, make us much more productive and wealthy as a society, help the poor, help the working poor, help the working middle class.

It is fascinating. Sometimes we all make the mistake of reading the responses, trying to understand, saying are we getting the message through. A number of our brothers and sisters out there are kind enough to comment, kind enough to help us, but also kind enough to say: ``Hey, I didn't understand this. I don't understand what this number really means.''

We are going to delve into a couple of those because the crisis is here, and it is not Democrat or Republican. I am going to argue it is much more difficult. It is demographics.

There is a whole bunch of mess that I believe our Republican majority next year is going to have to clean up, and God willing, we will have the fortitude to do it. But the fact of the matter is, over the next 30 years, there are some really ugly numbers, and it has to do with the fact that we got old as a society.

Our baby boomers are retiring, and almost no one is comfortable telling the truth. So, we are going to rapidly go through a number of these.

Look, this is a board I show over and over just to try to help people get their heads around it. See this red here? We are not even going to talk about 1965. We are going to stick with 2022, so last year's budget cycle.

Remember, we are running on continuing resolutions, so there is all sorts of other budgetary malfeasance going on around here, but here is where we are at.

Do you see this red here? That is for last year's budget cycle, 71 percent of all the spending, and it is on autopilot because this is: Hey, I turned 65. I get a health benefit. I worked so many quarters, and I turned 65 or 70, wherever you choose, and you get Medicare or Social Security, or you served in the military.

You have to understand. The vast majority of your government is on autopilot.

This blue here, that is defense. So, 13 percent of the 2022 budget was defense.

The other 16 percent was what we call nondefense discretionary. That is the EPA. That is the FBI. That is the Park Service. That is everything you actually think of as government. It is functionally only 16 percent of the spending.

There are a number of us who keep looking at different ideas and different numbers, and we keep trying to say: What would happen if we actually took all the outlays and rolled them back to 2019 before the pandemic?

But some of the math--forgive me, but we were working on this as we were walking over here to the floor--you have a math problem. First off, the discretionary has shrunk from--let's see, it is $52 billion bigger in 2022 than it was in 2019. So that is real money.

But what has exploded are two things, the mandatory Social Security, Medicare and all these other things that are formula and interest. In 2019 we spent basically $376 billion in interest. We are functionally heading towards doubling that in the coming budget cycle.

So we have got to decide, if I could adopt the 2019 budget, we would actually, with the really substantial increases we have had in tax receipts, tax revenues, tax collections, whatever you want to call it, if we adopted the full 2019 budget then we would be even.

How many Members of Congress are ready to get up here and say we are going to cut Medicare, we are going to cut Social Security, we are going to cut veterans benefits, and we are going to actually somehow pay less interest on our debt?

The point I am trying to make is the vast majority of what is government is autopilot. And what we actually debate, the theater around here--so in 2019, 50 percent was what we will call discretionary, 50 percent was defense, the other 50 percent of that $1 trillion 33 billion, half of it was true discretionary. I'm trying to make the point, if you are going to save us, it has got to be an actual discussion, mostly about healthcare costs.

I am going to show you some boards here. This is another one I bring back and forth. I am shocked how many of my brothers and sisters actually--hopefully, watching parts of this, or their staff are watching parts of this on their televisions, there are a few hundred televisions around this campus--will digest--and for some of my brothers and sisters on the left, they actually get really upset with me on this, you can't tell people that.

But it is the math.

Over the next 30 years, so starting today, 30 years from now--I am getting tired of hearing myself say this, but I can't seem to get my brothers and sisters around here to digest the number--we are functionally going to borrow $114 trillion in today's dollars, and $38 trillion of that is the shortfall in Social Security.

When we add up here is our shortfall and here are our financing costs, $80.5 trillion is the shortfall in Medicare, so about 75/25.

How many politicians do you hear, Mr. Speaker, how many accountants, how many smart people do you see talking on financial television saying, Hey, we are heading toward a debt crisis, and it is healthcare costs.

Oh, by the way, the rest of the Federal budget actually has about $1 trillion, a $1.9 trillion positive balance. You have to understand, Mr. Speaker, it is autopilot.

These are earned benefits. Your society, your government, and your country made a deal with you, if you work this many quarters and you reach this certain age, if you are part of a certain Tribal group or other things, then you get these certain benefits. Fine.

Do you think back 20 years ago if we had taken a little sliver of Social Security and allowed the individual to put it in private accounts, the accounts would have been so much more robust?

The Democrats absolutely demagogued that, oh, it is the end of the world.

And now here we are 20 years later, and we are a decade away from the Social Security trust fund being gone.

How many Members here get behind these microphones and are willing to tell their constituents the truth, that you are headed toward a 25 to 27 percent cut in Social Security unless we come up with some big, bold solution?

The problem is the Congress says, Oh, let's just raise taxes.

Except the problem is that that is just the Social Security portion. Medicare is three-quarters of all the coming debt, and the amount of taxes you have to raise--are you prepared for the amount that that actually starts to slow down the economy?

So there is another board. I haven't shown this one in about a year. This is actually 2020 data. The numbers are actually much worse today because of healthcare inflation. I live in a place that has about 12 percent inflation, the Phoenix-Scottsdale area is the highest in the continental United States. But base inflation, healthcare inflation, is up around 16 percent. So these numbers are much uglier today.

This is really uncomfortable, and this makes people upset. But it is the math.

A typical couple retiring--so let's say you are retiring right now. You functionally are going to receive 3 bucks for every dollar you put in. It is the math.

Now, on Social Security, basically you get what you put back in. You get a little bit of a spiff, but if you had actually been able to put those dollars into the markets or into some bond, you would be much better. But on Social Security you basically get back what you put in.

The problem is for that couple on Medicare taxes, you will have paid about $161,000 in taxes, and you are going to get about $522,000 in benefits. It is this gap right here that bankrupts our country. It is healthcare costs. It is the math.

I know it upsets people. If you want to read the actuarial reports, Mr. Speaker, we will be happy to send them to you. But it is the truth.

At some point, the political class needs to start treating the public like adults and tell us the truth even when it is not what the political class here has said, It is waste and fraud; we don't tax rich people enough.

All that is a fraud.

And going on right now, you have got to understand, the numbers are rolling on us. All the trillions and trillions of dollars of stimulus that were pumped into the economy has set off inflation that has made almost every American poorer. You have to understand that inflation is higher than wage growth. You are poorer today than you were 1 year ago.

How many of my brothers and sisters on the other side do you see get behind the microphones and show like they give a damn that America's workers and poor people are poorer today?

Well, let's subsidize them more instead of blowing up the economy.

And now you start to look at what is going on. At this moment, we are already at one-quarter trillion dollars in debt. Remember, our fiscal year began October 1, and our spending is still exploding.

The Federal Government spent $500 billion last month, and we are supposed to be out of the COVID spending craze, and we are not.

I bring this chart just as a simple, simple get our heads around the projection. So these two lines here are the 2021 COVID. You see, there just huge amounts of government spending.

But what is important here is, do you see this line right here?

That is just if you go back to normal life, get rid of these 2 years, just a normal life, the debt is going just where everyone has modeled it.

This isn't new. This has been talked about for one-quarter of a century.

Does anyone remember when one of the senior commanders of the U.S. military came here to Congress and testified and said, I believe the greatest threat to the United States in the long run is our debt?

The spenders around here said, no, you can't talk about that.

One of the reasons I believe the public should be just livid with us is our unwillingness to treat them like adults.

The other thing that is going on--back to telling the truth again-- the 1980s, does anyone remember the 1980s?

Apparently, if you did the mean of the interest on U.S. sovereign bonds at that time, we were financing around 10 percent interest rates. But we had this artificially low interest. Now it would have killed you if you were a saver. It killed you if you were trying to save for retirement. It was great if you wanted to go into debt.

I need you to look at something here, Mr. Speaker. During 2020 we had an average of 2.2 percent which was the CBO calculation. They even project that when we go off into the future we are going to double that. And it is already doubled today.

So do we go back to the magic times where we are saying, Hey, we are around 2 percent, 2010, 2 percent for the decade? Or do we double it?

What happens if we double U.S. interest rates?

If we go up 2 percent, 30 years from now we are at 280 percent of debt to GDP.

Do you know, Mr. Speaker, if you go up--I think it was, what was the math long term--I think it is like 25 years of 2 percent increase on here basically consumes every projected dollar of tax receipts?

It is all our money.

How many of us plan to live another 25 years?

How many of us really believe we are going back to the age of 2 percent or less interest on U.S. sovereign debt?

How many of us agree with the Congressional Budget Office that because we are going to be borrowing so much of the world's capital to finance our debt that we are going to push up interest rates for ourselves and the world, and by doing that we drive ourselves into bankruptcy even faster?

Now, you don't actually go bankrupt. What happens is the economy slows down, you live in this flat-lined economy, and there is almost no prosperity. There is no growth, jobs become scarce, and every day you fall further behind. But that is the future. The crap around here is heading there. But we will do some great virtue-signaling bills. Maybe we will ban plastic straws or do something really useful.

And you sit down with our progressive friends and say, okay, let's walk through your math. Your math, not mine, your math. And understand, if I take your wish list, free college, the climate proposal, jobs guarantee, the Medicare for All, and then add them already on in the 15.7 baseline deficit, which is already higher today because of the growth in interest rates, and then I turn around and say, okay, we are going to tax all unearned income over $1 million. So if you own rental houses, we are taking every dollar. If you make more than $1 million, we take every dollar. And we will add into that we are just going to take all the wealth of billionaires; every dime of it.

Hey, why don't we take basically the entire defense budget, and we will just wipe out all defense protecting the country, even though that is constitutional?

It doesn't get you anywhere.

This is the wish list on top of the fact we are already upside down.

Do you understand how loony this place is?

If you go over and over the math, the roster, the tax hikes, if we do all the tax hikes, hey, a 50 percent income rate for anyone making $200,000 or more, then you start to say we will eliminate all deductions. We are going to take payroll tax, so your FICA tax, and we are unlimiting it, so it just goes through the ceiling. Hey, you make $1 million, you pay 15.3 percent on that, Social Security, Medicare, unemployment. You take all those corporate taxes and put them back up to 35 percent. And then live in a fantasy world that you didn't slow the economy down.

Do you know you only get two-thirds of the way to covering the structural deficit that is already built in?

That is assuming the fantasy world of hey, I just taxed the crap out of my country, took all of the available investment capital out of the country and consumed it in taxes and government spending, but the economy will still maintain the same GDP growth and there will never be another recession or another virus.

The inability to have adult conversations around here about the proposals are lunacy. They are great politicking. You go home, stand up in front of the town hall, you tell them these things--you are lying to them--and everyone applauds and says, oh, I really want free stuff.

Then you take the best estimate--understand, this number, the 2021, is probably double last year than it will be in the future years because this has huge amounts of COVID fraud. Many of us believe COVID unemployment may be the single biggest fraud maybe in world history. We have seen some underlying reports that it could be a couple hundred billion dollars.

But let's pretend that the fraud and waste of 2021 was something we could capture and that we can get every damn dollar. That is $662 billion. That is amazing.

Now, it is a one-time thing. You get it back. We were able to collect every dollar and stop all the waste and fraud. Great. Except that we are heading toward $2 trillion deficits at the end of the decade. So we took care of about a quarter of it.

Now, we need to work our heinies off to get every dollar of waste and fraud out of the system. We need to stop designing insane systems where we hand out money and we are going to figure out if you should have gotten it a year or 2 years or 3 years later. We have got to stop the fantasy that there are simple solutions.

Last week, I stood here, and I showed the board, saying, do you know, if we got rid of every single dollar of foreign aid, the $38 billion of foreign aid, it paid for about 11 days of borrowing--not spending-- borrowing.

I know we have been told over and over, Hey, there are simple solutions: Tax the rich; get rid of foreign aid; waste and fraud. There are rounding errors in the scale of what is hitting us. But there are solutions, and dammit, I need us all--whether you be on the left or the right or the public that is trying to understand--be willing to think differently. Be willing to stop this insanity of, oh, we will just do an entitlement reform. Like that is ever going to happen.

How many Members of Congress are going to come here and say, I cut Social Security and Medicare. It is never going to happen. Nor should we. Those are promises we have a moral obligation to keep.

Another moral obligation is: How do you finance them? How do you keep them? And every Member who refuses to tell you the truth about the math is also putting them at peril.

You can't lie, my brothers and sisters on the left, you got to tell the truth. Playing this game--oh, the 2017 tax reform, oh, it crashed revenues. Do you understand we are a trillion dollars higher in receipts--for those of us on the Ways and Means Committee--than we were when we did the 2017 tax reform?

It is a spending problem. If I had come to you in 2017 and said, Hey, 4 years from now we are going to be taking in $1 trillion additional revenue, you would have laughed your heinie off--but we did. How can we still be so upside down? How, in this year, when we are still not doing the crazy level of COVID spending, are we still a quarter of a trillion dollars--and we are only, what, into our second or third month of this fiscal year?

I beg of us--you look at charts like this and you understand, it really is a spending, it is a structural spending problem. As I was just showing you the really uncomfortable slide, over the next 30 years it is Medicare and Social Security. It is what it is.

You look at the projections. This slide is incredibly important for all my junior economists out there. We have times since the 1960s until today, we have had very high marginal tax rates, we have had low marginal tax rates. And guess what, we always seem to come in with high tax rates, low tax rates; good economy, poor economy. We always seem to ultimately come in right about 19 percent of the size of the economy in revenues, in receipts, in taxes. I need you to think about that.

If I want more revenue, I need an economy that grows the size of the Nation, the wealth of this Nation, the prosperity. The poor get less poor, the working middle class get rewarded for their work. Do policies that grow. And the benefit of that is how you get more tax receipts. Because you have got to look here--understand that our spending is heading toward 30 percent of the entire size of the economy.

I know these are geeky numbers, but those are stunning numbers. Yet, the number of times--I showed you before all the projections--well, we will just raise taxes. Then you look at our history when we have done that. The growth--the size of the economy have flatlined or they shrank. The total dollars in aren't what you prayed for.

I want to do a little bit of hope, and I also want to talk about a couple opportunities. When we get back--I don't know when we come back to basically do this horrible omnibus and all these things whether I will get some floor time to go into more depth.

Mr. Speaker, can you share with me my time remaining?


Mr. SCHWEIKERT. Mr. Speaker, I am going to finish this up in 6 minutes and yield back to you.

I need us all to come back and think creatively. If I came to my brothers and sister here who are elected, our staff who are all freaky smart--a lot of them institutionalized, but they are smart. The public, who, if they knew the underlining numbers, their creativity could break us through on the crap we are doing.

If I came to you tomorrow, and said, I need ideas that crash the price of healthcare. That for the 5 percent of our brothers and sisters who have multiple chronic conditions that are well over 50 percent of our healthcare spending, what do we do to make them less sick--maybe even cure them?

What do you do to deal with environmental issues but do it in a way where the economy still grows instead of this model the Democrats have brought us--we are just going to subsidize everyone--and then wonder why the math ultimately blows up on us.

There is one opportunity that specifically interests me. I never want to hear another Member basically come behind the microphone and say, We need to regulate this more--or on my side--we need to deregulate this more. Can I beg of us to use the language--why don't we try some smart regulation. Why don't we join this century and use the technology we all walk around with. We all walk around with supercomputers in our pocket.

We had the Supreme Court case, it was West Virginia v. EPA, that basically says Congress has been derelict in its duties for years-- decades. Hey, EPA, wink, wink, nod, nod, we want you to do this, but we are not willing to tell our voters what we are willing to do because we are getting lobbied over here, so we are just going to hand over all of our congressional authority, our constitutional authority to a bureaucracy. The Supreme Court said we got to stop doing that.

We do it with the EPA, we do it with securities regulations, we do it with everything. Guess what it means? We are going to have to start acting like adults in this body and actually start reading our bills, working on the details, coming up with rational ways to make society safe, healthy, but prosperous.

I have a little video out there if someone wants to go look at it, it is Schweikert environmental crowdsourcing on YouTube. It is just the simple concept of--you know there are things that you can attach to this that actually would calculate air quality, you know, PM10 or organics and other things.

What would happen if you had a couple thousands of those floating around your community? You would always know what is going on. If you had someone painting cars behind your house, you would catch them immediately. If you had a model like that, do you need the same 1938 command and control system?

So I am the motorcycle paint shop--do they really need to file paperwork and fill up file cabinets full of paper because we all know file cabinets full of paper make the air quality cleaner. If you had a crowdsource model of data, the government could say, screw it, we are going to leave you alone and we are just going to get the bad actors. If you are playing by the rules and you are using your scrubbers and playing by the rules, you get left alone; you don't need the permitting model.

You can crowdsource the data. You can do this with sound and water and transportation and smart cities. It would crash the size of the bureaucracy--and I know a lot of folks would say, What about all the government unionized workers? This is about getting a productivity bump and then holding that bump long term because even if we can use technology to crash the price of healthcare and we don't get enough growth, I can't make the numbers work.

I have a 5-month little boy we are adopting, when he is 25 years old his tax rate will be double all of ours. It is already baked in the cake. It is done. We have already done this to our kids.

Corporate tax rates. I don't know why corporations don't have to disclose that their taxes are doubling over the next 25 years. We make them disclose things about potential environmental impairments, why didn't they have to disclose the fact that we are going to be doubling their taxes? It is baked into the cake. Because the whole baseline services that we have promised with our population getting older, everyone's taxes are about to be doubled over the next 25 years unless, of course, you use technology to crash the price and dramatically increase the productivity.

This one borders on silly, but it is making a point. The left is absolutely fixated on methane. Okay. Methane is a huge greenhouse gas-- okay, we will give them that. You know, a couple years ago we had to recalculate its half-life. It is down to, what, 8 or 9 years, for those of us who actually geek out on this stuff. And, oh, we need to start shutting down the use of hydrocarbons. We need to start calculating the methane load for any barrel of oil or any Btu of gas.

Then there are articles out there saying, you know, there is actually a real cheap, cheap, cheap solution--I am going to be a little silly--I believe it is copper oxidized clay. It is kitty litter. Do you know you can take a well or some other methane production source and it absorbs like a sponge, and it is dirt cheap. You know why? Because it is dirt.

How many Members of Congress have you seen here saying, We need to bring the researchers who did this--and their academic studies--bring them here because we want to understand this. Is there a way we could actually be making the environment cleaner, better, faster, and still keep the economy growing?

No. They are hell-bent on shutting down the use of hydrocarbons even though there are solutions. Why wouldn't this place expand its intellect and be willing to at least bring in the scientists saying: Wow, you did this study, and it really works.

Last week--and I got a little crap for this, and I want to make the point again--we calculate over half a trillion dollars a year in spending for people who don't take their pharmaceuticals properly. I agree. You know, being someone with hypertension, I am working really hard to work out and eat better and see if I can bend it and never have to take a calcium inhibitor or even a statin--that is cholesterol.

We know for a fact that if a population were to take their prescriptions--and some of this is true for diabetes and everything else--it is 16 percent of all healthcare spending. What if you could get half that? Right now we estimate the number is probably $520, $530 billion a year in healthcare costs because grandma didn't take her pill, or someone stroked out or those sorts of things--where the pill is pennies.

So a pill bottle cap that beeps at you in the morning that costs 99 cents and reminds you to take it has hundreds of billions of dollars of potential impact. Is that difficult? Well, apparently around here that idea is difficult--the lack of science, the lack of math, the lack of basic creativity.

And then there is my holy grail. This is truly the holy grail. Truly, I pray to the dear Lord, let what I am reading be true: 33 percent of all America's healthcare spending is diabetes; 31 percent of all Medicare spending is diabetes. Most of that is type 2, it is not type 1. Type 2 in many ways has a lot to it and it is ultimately an autoimmune, but it is partially self-inflicted.

Is this body willing to have one of the most difficult political debates and conversations it has ever considered in modern times? Are we willing to change the farm bill? Are we willing to change the incentives of what we incentivize our brothers and sisters to eat? Are we willing to incentivize our brothers and sisters to be healthy?

You all saw the numbers of the misery this place brought to the Nation with the shutdowns and how many of the ZIP Codes around this country have doubled their obesity numbers. Why this is important is apparently we have been on the cusp--we have had a handful of people who look like they have been cured of type 1 diabetes--it is less than a year, maybe it ultimately doesn't work, but this is a big deal.

Why aren't we working on it? Why aren't we? Because if it is 31 percent of all Medicare spending, and we were able to help our brothers and sisters who are getting their feet cut off and going blind, wouldn't that be the compassionate thing? Wouldn't that be the moral thing instead of this damn conversation we have here? ``Well, let's build more clinics so people can manage their misery.''

I beg of you, if we are on the edge of a cure for--you saw last week it finally got approved--hemophilia, got a single-shot cure, really expensive. Work out the financing.

Cystic fibrosis, we may be on the cusp.

Sickle cell anemia--why doesn't this place seem to give a damn about people's misery and suffering?

By the way, they are part of the 50 percent that is also really good economics.

I ask anyone that is watching this, think differently. Curing our brothers and sisters, fixating on economic growth, crashing the price of technology by legalizing technology, is the only path I can come up with that saves us from the crushing debt.

The fact of the matter is, if you look at the models, it means the next couple of decades could be really prosperous. I just need this place to act very differently.