Borrowing Per Second

Floor Speech

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. Mr. Speaker, we are going to try to do three things tonight.

One, I am going to spend a few minutes sort of talking about folklore. I have tried this a couple of times. It hasn't worked, but hope springs eternal. I will sort of walk through some of the comments you get and try to explain where reality is, and maybe they are bots or maybe they are made up.

The second thing, we are going to walk through the borrowing numbers off of the Treasury's website so they are up to date on what is actually happening. I need to do it over and over because I am trying to get this place to understand how fast the numbers are moving away from us.

Number three, we are going to do some thought experiments. I am going to show some ideas in technology that actually could fairly substantially change the borrowing and debt curve.

First off, last week, I appreciate that Forbes put up on YouTube last week's floor speech. I think now 640,000 people have viewed it, which is wonderful. However, you then read some of the comments, and you accept some of the comments are from Russian troll farms, Chinese troll farms, or Iranian troll farms, or they are bots. It is just lunacy. Every once in a while, you get the person who says: Why aren't there any people in the Chamber?

They are not supposed to be here. The work of the day is done. Now, we do our floor speeches. Some evenings, they are still in committee until late at night. It is right now--what?--7:30 here in Washington.

If they are hanging out here, they should be in their offices reading, but one of the reasons I do these presentations, is that we are probably on a thousand televisions around this campus right now. Maybe there are some staffers who all of a sudden are willing to listen to math. Remember our running joke that this is a math-free zone.

Second thing, I am going to do this because I am tired of people who don't think. Stop being trite. The scale of the debt problem is real, and whether you are on the left or the right, you have to understand the solutions. We move our mouths about saying we are going to raise taxes on rich people, and you get about 1\1/2\ percent of GDP, but you are borrowing them at 9.6.

Those of us who want to cut things have to be honest. I can find you 1\1/2\, 2 percent of cuts, but if you are borrowing 9.6 percent of GDP, which we are this year, you are not really moving the needle.

One of the comments, just to understand how absurd and how stupid-- excuse me. That is not fair. I take that back. I apologize.

Please take this seriously. When you have the person who says--and maybe it was a bot, and you see in the comments 20, 30 times--if you just got rid of congressional salaries. We are probably overpaid for our work product.

In an entire year, every U.S. Senator, every Member of the House, if you get rid of their salaries, it would cover 16 minutes of borrowing in an entire year. In a day, it would cover 2.6 seconds of borrowing. This is what we call fun rhetoric, and it is stupid math.

When you have someone willing to say things like that, it once again shows you are not willing to understand the scale that is moving against this country.

Remember, over and over, it is debt that has crushed republics, so let's actually go through some of the other math. Then, there are a number of things we are going to go through here, just trying to understand how absurd what is going on is.

I grabbed The Economist magazine, a wonderful magazine. It is a little liberal, a little European-centric, but you see their cover. Their cover is trying to make the point that we have actually a remarkably healthy economy, considering all the stupid that has gone on. Yet, what does it mean to you when magazines like this have covers saying: The amazing American economy is still growing.

At the same time, last week I was here and told you we were borrowing over $95,000 a second. Now, it is no longer $95,000. It is, I think, $98,300 a second. If we try a little harder, maybe we will get over $100,000 a second.

If you go over the last 365 days, as of today, we are borrowing over $98,000 a second, and almost every dime of that growth in borrowing is interest and different types of healthcare. Yet, when you look at these, I keep trying to explain over and over every dime.

This is a more updated version. Here is what we call discretionary. You see there in the blue or purple or whatever that color is, about half of that is Defense. About half of that is everything you think of as government. It is the FBI. It is the Park Service. It is everything else other than mandatory earned benefits.

Every dime a Member of Congress votes on is borrowed. All Defense is borrowed. All discretionary is borrowed.

Also, we are heading toward a time where we may actually see--and this is off. If we actually get close to $2.8 trillion and all discretionary is about--start thinking that. When you start having another $800 billion of Medicare, things of that nature, borrowed, shouldn't that actually start to create a little sense of stress, of panic?

Are we going to continue to play the game around here where the left lies, saying we are going to raise taxes, and then we do stupid things like, well, if we got rid of foreign aid, yes, it would take care of a whole week or so of borrowing.

What I am asking for is to think with a calculator. We have to change policies in a big-time way to save this country, and it is going to be complex. It is going to be hard. You are going to have to read and understand, but there is hope.

I can show you over and over. I have come to this floor and said: If you do these things, you can crash the price of healthcare. If you adopt these technologies, you can crash the price of this government.

Yet, these hallways around here are full of people who are not here to help us cut spending. They are here to actually help themselves. They want money. They want it either to defend their bureaucracies or to defend their business models, and they use Congress as a barrier to entry.

Let's walk through some more of this.

One of my other frustrations is how you plan. Last May, when we were supposed to be building the 2024 budget, a year ago May--and we are going to vote on the rest of it this week, which shows just how dysfunctional we have been, but we have been too busy trying to get rid of a Speaker.

Think of this. In that time, we were fighting over $16 billion. We are borrowing about $9 billion a day. We have gone how many months, and we never got around to actually working on the real problems because of the theatrics around here.

The Congressional Budget Office last year said that we may only borrow $1.744 billion. I like to use gross numbers instead of publicly borrowed, and over here when you borrow from the trust funds, because you have to pay them back--and we do pay interest to the trust funds-- when you borrow out of Social Security, borrow out of Medicare part A trust fund, when you borrow out of Transportation--and we do borrow that money right out--it goes to Treasury, goes out the door, and then we give them Treasury note IOUs with interest.

Then OMB, Office of Management and Budget, last June, said that we are only going to borrow $1.988 trillion in the 2024 fiscal year, and that bottom number is just what we have already borrowed to date, which, if you work it out per month, you are looking at the number of $2.8 trillion, $2.9 trillion.

How do we keep missing the number by a trillion dollars? Is that part of the scam? Is it part of the game to say that we are going to give our number prediction--and that is what all the talking heads on television, radio, and the newspapers and the really diligent press around here fixate on because it is in their little book and they are not paying attention. That first board I showed you, you could go onto the Treasury's website and do the math yourself and see where we are actually at.

Part of one of the drivers is nothing you get to vote on here. It is the continuation of rising interest rates, so I have had to adjust this. Understand, today's 10 years, I think, was at 4.3, so this is the blend interest rate, which means--let me see if I can make this make sense.

You have a country with about $34\1/2\ trillion of borrowing, but it is really closer to $27 trillion, $28 trillion is sold to the public. The rest of that is borrowed internally. What is sold to the public has a couple of factors on it. It is duration. They sold a 6-month. They sold a 1-year. They sold a 5-year. They sold a 10-year. They sold a 30- year. These are bonds. These are notes. These are paper. It is just different names for the different durations. Some were sold years ago when interest rates were basically close to zero.

This year, in the 2024 year, with the new issuances of bonds because of our current borrowing and then the refinancing of old, there is about $10 trillion that gets subject to the new interest rates. As bonds are rolling off, and then you saw when we had that stressed bond auction--what was it?--last November where the market makers had to buy 24 percent of it, and a couple of weeks later, Treasury rolls out and says maybe we are just going to start selling shorter on the curve because at least that way we know we have the demand, but, yes, we are going to pay higher premiums on it.

Every couple of weeks, we get the calculation of what our interest load is, and it keeps ticking up on us. I am going to show a couple of boards here. If you look, interest on outstanding debt, the nonnegotiable is the debt internally. Publicly held is right now about 3.259 and may continue to tick up as they go shorter on the curve.

I know this is geeky. If you don't like math, please go watch something else. We are selling more and more of our debt short because there is demand there, but that interest, we are paying a premium. Then, you want to know why the debt and borrowing keeps going up.

It is about how we are financing. What that ends up creating is this situation here where my predictions--and I will take responsibility if I am wrong because, understand, my darkness is about $800 billion to almost a trillion dollars over what our Congressional Budget Office says, what Office of Management and Budget said. So far, I have been right. I also look at it every single day, where they put a number and then several months go by.

We are right now on track for coming in over $2.8 trillion in borrowing. Remember, I just showed you an economic magazine saying: Isn't it amazing how healthy the U.S. economy is? How do you borrow close to $3 trillion--that is a gross number that is both publicly borrowed and internal borrowing--how do you borrow close to $3 trillion when the economy is good?

I need you to think about this because tax collections are not that far off from the historical average. When we have had very high marginal rates, when we have had very low marginal rates, they are always there at about 17.5 percent, 18.5 percent, sometimes it is as high as 19 percent of the economy, it comes in as taxes.

Does this let you know there is something structural out there? It is the dirty little secret that we all know, but we are afraid to say because it gets us unelected. We tell the truth about where the drivers are.

Mr. Speaker, 100 percent of U.S. borrowing from today through the next 30 years will be interest, healthcare, and Social Security. In 8 or 9 years, when the Social Security trust fund is emptied out, we have to decide whether we will let the immorality of doubling senior poverty in America with seniors taking a 25 percent cut go on, or do we backfill it with general fund revenues? If we do that, those three things will be 100 percent of the borrowing for the next 30 years. Everything else is modeled to be pretty flat. As a matter of fact, the general fund, as related to discretionary, actually is going to be slightly positive over the 30 years.

We got old. It is demographics. We are not supposed to say that around here because we might hurt someone's feelings. I brought the charts here a couple weeks ago with the update in fertility rates. In 15 years, this country has had more deaths than births.

What are we doing to plan for that? What are we doing to plan for the reality that we are heading toward a time where we are going to have 2.3, 2.4 workers for every person in retirement on Social Security?

We know it is coming. It is not a black swan. It is what they nicknamed a white swan. It means you see it and you still don't do anything about it because we are too busy knifing each other with rhetoric that doesn't make mathematical sense because it is good politics.

And now we have done the updates again and our latest update this year is no longer fitting just interest in this year. I want to say this in a way where I get it fairly accurate. Our latest model says interest in the 2024 fiscal year will be $1.076 trillion.

When I came here a couple months ago and said: We could be heading for $1 trillion--I got mocked, even from some of my colleagues saying: Schweikert, you have got to stop making things up.

Well, it turns out I am right.

Mr. Speaker, why don't we take it seriously? We sit here and fight and fight over--it is real money we fight over, but in the same day, we will spend all day fighting over a few million here, which is important, and I am fine. I am willing to cut these things. However, we are picking pennies up off the ground as the avalanche is crushing us. That same day we fought over those millions; we borrowed $9 billion that day when we were fighting over millions. I understand that millions has a lot of zeroes. A trillion has 12 zeroes, so you can understand the scale.

I put up this slide just because this is our prediction slide, but also to make another point. Here is how spending will work this year, just so people understand the hierarchy.

Social Security, we expect $1.450 trillion to go out the door. This is an earned benefit. You worked in America; you paid your FICA tax. If you worked your 40 quarters, you maxed out, but you earned this.

The next biggest spend in your government isn't coming from a running tax and trust fund; it is borrowing, in both net and gross. The difference there, once again, is net is just the interest we pay out the door to people who bought our bonds. Gross is also because we owe interest to Social Security and Medicare and all the other trust funds. Both are coming in as the second biggest expense to the U.S. Government.

Number three, Medicare.

Number four is now defense.

If you and I walked down the street and said to someone: Hey, what is the number one spend in the U.S. Government? What is the number two? Would they say interest is the number two expense of this government? If you think interest rates are about to crash down to where they were in the last decade, remember the last decade was a fantasy.

If you take a look, if you remove sort of the previous decade with the value of money manipulation in interest rates, if we remove that and look at the 35-year average, we are not even high enough to be in the 35-year average yet. The fantasy has to come to an end here. This is reality. This is one of my continuing frustrations.

CBO, we try to work with them. They do their best. They have to operate with the GDP growth they expected, that is where Treasury tells them what receipts are coming in. We call tax revenue receipts. That is the proper term.

But over and over, we keep missing the numbers. And when you start missing your numbers by a trillion dollars, it makes the job a little trickier when the people you rely on, the data you rely on--because we missed how high interest rates--remember, last October everyone was saying that the Fed is going to start cutting, and inflation in the last 2 months really hasn't gone down.

This isn't a non sequitur. We suffer inflation because we spent too much money. Even the leftwing academic studies from last year, which wanted to blame the supply chain, had that as part of it. Some of them said as much as half was supply chain. Some said it was only about 40 percent, but supply chains are fixed.

We are a couple years later, how are we still running hot again? We are paying the price for spending money in ways that did not actually spike productivity. When you subsidize things, do you get the most efficient, the cheapest, the best way to produce them? It doesn't work that way.

You need to make it so there is a level of competition that the best, fastest product and the reinvestment in your capital--it is the difference between supply side and sort of the Keynesian investments, and now you have seen both.

You saw the productivity gains with the tax reform and now you have seen what happened with inflation reduction where you got inflation. Now, the last 2 months, it hasn't been going down the way it is supposed to. So expect these interest rates I just showed you to continue.

If you live in my neighborhood, if you live in the Scottsdale-Phoenix area, it is a wonderful area. It is absolutely incredibly beautiful this time of year. From January 2021 until 2 months ago, if you are not making 23.6 percent more, you are poorer today than you were in January 2021. You want to know why people are cranky?

Try and understand how many of our brothers and sisters around the country, particularly in the working class, are poorer today. In my area, if you are not making 23.6 percent more than that January 2021 date, you are poorer today.

Look, if you want to go down the rabbit hole, part of the idea of stabilizing debt--when someone says: We are going to go pay it all off. Really? Let's see, the debt basically equals the entire size of this economy, just the debt. You are going to go pay it off?

From an economic standpoint, right now, be joyful if we could just stabilize it. That means the growth of the debt can only grow as fast as we are being productive as a society, as the growth of this economy.

Right now you have a problem in 2023 at that time--this is publicly- held debt; this isn't my gross debt--we borrowed $2.6 trillion from the public and the estimate is the economy grew about $1.5 trillion. But it is that delta that kills you. Until you squeeze those two back together, so if you only, only grow debt at the pace you grow the economy, that is stability. Then maybe you can get some more discipline, adoption of technologies, and better ways to do things, and you start to separate those so you can start to pay down that principal because the interest doesn't buy you anything.

I am not going to make you have to deal with some of these. How do I say this nicely? Here is where I hurt people's feelings.

Remember a moment ago how I was trying to explain that the primary driver is the U.S. sovereign debt? I need to update this board because the 30-year number was $116 trillion of borrowing and that is from a year or two ago. Our best math right now is close to $130 trillion of borrowing over the next 30 years.

If you are still a decade from retirement and you think you are going to live another 20 years, you have got to understand the dystopian level of what we are going to have to do to the U.S. dollar, to your savings, to those things. You don't think this is going to crush your retirement?

How about me? I accept I am an old dad, but I have a 20-month-old and I have an 8-year-old, do they deserve to have prosperity? Understand, my little boy, when he is 23 years old, I believe is the number, every U.S. tax has to be double what it is today just to cover projected spending, and that is baseline spending. That is no war, no recession, no pandemic, just baseline.

If any of you plan to be around here in 20-some years, are you prepared to have your taxes doubled? That is the math. I know this is a math-free zone, but I am pitching to your self-interest. Do you care?

It doesn't have to be that way. There are solutions. The hard part of this board is trying to explain to people that 100 percent of the borrowing that is coming over the next 30 years is Medicare and Social Security--if we backfill Social Security when the trust fund is gone in 8, 9 years--and interest. The rest of the budget actually has a slightly positive balance, meaning it comes in under its growth curve, underneath the projected receipts.

Now, we are going to first talk about understanding one of the key problems in our society. Then we are going to see if we can be creative in understanding the problem and be disruptive.

What could we do to have a healthier, more prosperous society? First, you have got to understand some of the things that are wrong here. The U.S. is an outlier in disease and disability trends. For some reason, we are dramatically sicker than much of the rest of the industrialized world. It is just math. We have the data.

You are all smart; at least if you are punishing yourself enough to watch an idiot like me talk, you have got to be either interested or not have a life, but understand that there is something wrong in the U.S. We are sicker than much of the rest of the world. The fact of the matter is healthcare costs are the primary driver of U.S. debt.

So what are the good things? What can we do to disrupt that?

There are a couple of amazing articles from a couple years ago. For my Democrat colleagues, who tell me how important taking on income inequality is, they are really interesting abstract studies that sort of say: Is it education? Yeah, that is a big play.

It turns out health was actually above everything else in the disparity of creating income inequality: urban poor, Tribal poor in a place like Arizona, and rural poor.

When diabetes is 33 percent of all of our healthcare spend in America, why doesn't this place go nuts in trying to fix diabetes? Instead what we did was something that is absolutely absurd.

In the Inflation Reduction Act, they took $16 billion and gave it to Big Pharma who they complain was gouging the price of insulin. At the same time, 75 miles from here, there is a co-op making three brands of generic insulin cheaper than the subsidized price.

Why wouldn't we take a fraction, a fraction, a fraction of that money and put it into saying we want competition, we want everyone battling to give us the best product and the best prices? I am going to show a weird little technology just as a part of the thought experiment.

However, instead, we subsidized. Excuse me, they subsidized the very Big Pharma that they complained about was gouging people, and then they crushed the competition that was trying to come in cheaper because now they can't compete against the subsidized price. This is the absurdity of this place.

We need more of this. Finally, you start to see the curve because of some of the breakthroughs in synthetic biology. We are going to talk a little bit about AI. Artificial intelligence is about to have a revolution in bringing cures to market dramatically faster, dramatically faster. We have actually now had the first couple of AI drugs designed to make it through the FDA.

As you know, 6 weeks ago we had the first genetic drug cure sickle cell anemia. Excuse me. Yeah, no, sickle cell. What we learned from that technology, there is more coming. How do we make it possible that it doesn't take $100 million or $1 billion to bring one of these drugs to market when we now have the ability to crunch data in ways that we were never able to do before, to understand efficacy and safety and effectiveness?

We could do it by policies. Is that Republican or Democrat or is that just sort of joining into this century?

This is a wonderful chart, trying to just point out the capital markets are starting to spend money in places to cure people. I will argue, one of the most moral things we could do and one of the most powerful things we could do for U.S. sovereign debt, make Americans much less sick.

Now, this is where I will get some really nasty comments. I have brought the charts and the reports and the academic studies. If diabetes is 33 percent of all spending, half of human diseases--so there are 3,000-plus human conditions--half of them are related to obesity.

Do we think about things we could do in farm policy, in nutrition policy, in helping our brothers and sisters live better, healthier, more prosperous? An ability to join into the labor force, maybe family formation, crushing income inequality.

Is that Republican or Democrat?

Yes, it will really, really annoy a whole bunch of incumbent business models that need sick people, but even they have souls. We are on the cusp of miracles. Why aren't we doing this?

Poor health reduces labor force participation. This is an absurd chart except for the fact, this is from Goldman Sachs, and they were just doing this thought experiment.

These semaglutides, I think there is a generic one that is going to be here in May. There are a couple great articles if you want to use your favorite search engine about some small molecule versions that will cost dramatically less to make, and they are coming. There is going to be competition, the prices are coming down. These are these GLP-1s.

They were just doing the thought experiment of what would happen if all of a sudden we started to get healthier as a society.

Okay, is that Republican or Democrat?

It would be the most powerful thing we could do for U.S. sovereign debt.

Are we ready to step up and take on the armies of lobbyists here who are upset with us every time we come up with--do you remember when we were trying to do telehealth? Before the pandemic, telehealth was one of the most lobbied-against technologies in Washington, D.C. Then the pandemic hit, and it turns out people had figured out how to work their phones.

Believe in the American people. Stop treating them like children, but also stop coddling those who make money off of our illnesses.

Let's actually take a look. This was fascinating. Once again, I want to thank Joint Economic Republican staff for being willing to go down the rabbit hole, talk to the Goldman Sachs economists, and try to understand how they got these numbers.

The basic pitch here is they were trying to figure out if there was a wider use and accessibility for the semaglutides, the GLP-1s. These are the hormone molecules your gut produces to tell you that you are full. It helped reduce diabetes and helped reduce obesity in America.

It actually had a substantial effect on growing the economy. It actually increased GDP. It is at least worth thinking about. This is the thought experiment portion of this program. Think about it.

If I came to you tomorrow--actually today, let's just do it right now--and said I need something from you we could roll out, and in the next 6 months we could have a major effect on reducing U.S. spending.

Okay, I have all sorts of things I could cut. I know my brothers and sisters on the left, they would want to raise taxes on people, but I need a policy that could have a major effect.

We have multiple academic studies that make it clear that about 16 percent of U.S. healthcare spending is people actually not adhering to their drugs. Someone like me, can you believe I have high blood pressure? As long as I take my calcium inhibitor, I don't stroke out. It is a pill that costs--in many ways, it is pennies. It has been off patent for decades and decades and decades. I just have to do my drug adherence.

Sixteen percent of U.S. healthcare spending is people not adhering to their pharmaceutical policy or whatever the right way to say that.

You do realize 16 percent of U.S. healthcare spending is close to $600 billion? What if you cut a third of that? What if I came to you and said, hey, we can get $200 billion in savings and make our brothers and sisters healthier and maybe keep a few of them from dying?

It turns out there are crazy, simple, little things, like the pill bottle cap that just beeps at you if you don't open it in the morning. It is like 99 cents. How many of us have a phone that the pharmacy, the doctor's office, however you want to do it, could beep at you in the morning, hey, remember, it is that time, you should really do this.

It is not the way this place thinks. This place thinks about subsidies and giveaways. Remember, ObamaCare, the ACA was a finance bill. It was who had to pay and who got subsidized, and then how much Federal money also went into subsidizing. It was a financing package. The Republican alternative was a financing package. Medicare for All is a financing bill.

How about the revolution of thought? Why don't we change what we pay by making our brothers and sisters healthier or maybe curing some things?

This is one of the simplest thought experiments I can give you. If U.S. healthcare, 16 percent of it is people not engaging in adherence, why not take that on?

Is that Republican or Democrat or is that just the adoption of technology? Is it just trying to be creative?

Look, there are other quirky things. This is more my personal fascination. I actually am blessed to have a couple staffers who are doing experiments with some of the different wearables that actually can use the data to help them stay healthier, to find out about their bodies. The beauty of this is, you get data off you for 24 hours a day, 7 days a week, and it starts to tell you things. Oh, when I ate that, my body didn't like it. When I slept this way, my body did like it.

These have crashed in price. There are even some health insurance companies now that are working with you, asking if you will do a wearable.

Look, a couple years ago, I came here, I had met a material science professor who had come up with this thing. We always joked; we called it the flu kazoo. It was something you blew into. It was a breath biopsy. It could almost tell you within a couple moments if you had a certain type, category of virus. It could bang off your health records, and then it could order you antivirals.

Would that help us? Would that make us healthier? Would that cut down the cycle time so you don't wait in the waiting room?

Yes. Except the problem is, in most places that technology would be illegal because it would be the algorithm writing a prescription. Every time I say this, I will get someone who says: David, we are going to try to run ads against you because we make money writing prescriptions.

I am just trying to make America healthier, and I am trying to find a way to take down the debt so we don't crush ourselves.

The adoption of technology, if it is as accurate--and, statistically, a model like that is more accurate than you and I can be as humans--why don't we promote it? Why don't we allow people the freedom to take care of themselves by using technology?

All right, now here is a crazy one. I am going to do this one just because it amused me. Remember how a couple minutes ago I was complaining about Democrats and the way they approached insulin because it was a great campaign issue, but it was technologically vacuous?

Here is one: How about if you had taken a couple dollars or just actually helped this? It turns out, they have succeeded at doing a DNA tweak to some cattle, and the cattle will produce insulin at a fraction, fraction, fraction of the price, and you could actually do different tweaks for different types of insulin.

I am just starting to read the academic article, but it exists. These are quirky solutions.

When you have debates around here, it becomes a debate of give away money or give away more money. It is not embrace something that disrupts and makes people healthier and actually at the same time doesn't blow up the U.S. debt and deficit. You can be moral and also have a fiscal brain around here. It just requires some literacy.

Maybe along with being a math-free zone, we don't read things. I subscribe to a lot of crazy journals, so I come up with this stuff.

I guess my reason for the thought experiment, Mr. Speaker, we are in real trouble. There is hope, but the hope only works if this body finds some way to think differently. I yield back the balance of my time.

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