Dangerous Deficits

Floor Speech

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Mr. SCHWEIKERT. Mr. Speaker, for anyone out there who is insane enough to have C-SPAN on, I may suggest requisitioning a life.

If you don't want someone to talk to you like an adult, if you don't want someone doing big math, big numbers, and being serious, I am sure there is a video out there of a parakeet playing a piano someplace. Please leave now.

Today I was actually going to try to come here and do the happy, positive talk. I actually had put together some boards on some really good things that happened.

Then we made the mistake on my flight; the staff actually looked at the trust funds that were collapsing over the next few years.

People forget. The Medicare trust fund is gone within 7 years. We can't actually work out the math of how devastating that will be because about 40 percent of all Medicare spent comes through that trust fund. It is almost all the money that Medicare patients receive at the hospital level.

I do have one happy slide, so we are going to do that one, and then we are going to go on to the reality.

Let me sort of make a point. We are going to have the fight over the continuing resolution or the budget or these things.

People are going to do their political posturing, and we are going to fight and fight. Please understand. It is all important. It is rounding of the rounding of the rounding errors of what is really going on.

You are going to see some slides here where you have got to understand every dime we vote on as Members of Congress is now borrowed--plus another $300 billion--and that is in this fiscal year. It gets dramatically worse over the next few years.

If you actually somewhere in your head think: Well, if we just got rid of waste and fraud and got rid of foreign aid, we would be fine.

Foreign aid is 12 days of borrowing.

Why is it so hard for this place to grow up and understand the most basic parts of math? I went off track there. I apologize.

Let's go back. How many of you saw this article? These are happy things. These are also things that are moral. They could make incredible differences. They could also save billions and billions and billions and billions of dollars.

I have been tracking the researchers on this, and I think it is the University of Chicago. They had this crazy idea. We will give people a vaccine to train their body to attack things.

How about if we gave a vaccine to train their body not to attack things? If you think about it, multiple sclerosis is your body attacking your nerve systems.

One of the reasons I am interested in it, we had a horrible, horrible family tragedy in regards to multiple sclerosis when I was very, very young.

It is the concept of sort of an inverse vaccine to take on autoimmune diseases, and it turns out type 1 diabetes is an autoimmune disease.

I have been coming to the mike for years talking about the research on being able to replant islet cells back into the body, either through stem cells or the one that has been now FDA approved which actually is islet cells that are bleached from cadavers and adjusted with CRISPR so your body doesn't need antirejection drugs to know this concept of we are just going to teach your body not to attack. This is a big deal. There are some wonderful things happening.

Now, here is the really interesting question: Will we be so broke as a country and a society that the ability to actually make the investment to do what is moral actually lowers future borrowing?

Look. Today, we finally crossed the $33 trillion, and some people are going to light their hair on fire. It is a big deal. It is about to get dramatically worse. We are going to look back fondly on this number the way we are going right now.

Do understand we now have--and we don't bet money--but we do have a little pool going with some of our staff and some of our economists of what will the fiscal borrowing be this year.

Remember, the administration is trying to play some games where they are going to try to credit themselves back some of the student loan money that the Supreme Court said they can't spend, so we are actually looking at the real-life borrowing number, not the fiscal deficit number, which has a journal entry fraud in it.

As of a couple of hours ago so far this fiscal year--and we still have a couple weeks left--I think we have borrowed $2.158 trillion. Now, I don't want to win because I am the idiot who said we are going to borrow $2.2 trillion. Please understand, a year ago, the Congressional Budget Office, 2002 May, said, this year we would borrow about $860 billion. Does something seem wrong in those numbers--$860 billion? Now it looks like we are going to borrow $2.2 trillion and almost every dime of that growth is healthcare costs which have exploded, particularly Medicare.

Tax receipts have fallen fairly dramatically. So much for this Biden socialized economy. We have handed out a couple of trillion dollars of money to build factories, to subsidize this and subsidize that. This was actually their modern monetary policy. You now have proof in the pudding. They set off inflation, and tax receipts have actually fallen. If anyone wants to write an academic paper on modern monetary policy, you have got the laboratory right in front of you. It collapsed.

What is the third thing that has actually gone against us this year? Interest. The bond market has not been treating us kindly. We were playing with some math the other day, maybe another additional, on top of everything else, $160 billion of interest. Those are big numbers. Almost no one can process that sort of math, but let's actually walk through it in a way you can all understand.

If you look at the last 12 months, we borrowed over $72,000. We borrowed, not spent, borrowed because we are borrowing about 30 percent of all of our spending. We borrow about $72,000 a second, and $20,000 a second is interest. Next year, my math--look, I am a little more dour than some of the people around me, but my math has us closing in on $800 billion of interest, just interest, next year.

I am going to show you a chart. Please pay attention. That is almost all defense. There was a time this place would have been losing its mind if I came to you and said interest next year will be pretty much what we spend on defense. Oh, David, that could never happen.

How many times have you heard anyone come behind these microphones showing any concern? Instead, we are going to do the theater on rounding errors. I am going to stop another $50 million here. That is a big deal. It is fine.

Did I mention we are borrowing over 72,000 a second? This is really difficult math, and it is really uncomfortable.

Let's go back to my opening statement. If you are someone that doesn't like hearing something that is uncomfortable, please go watch something else.

What is the primary driver of U.S. sovereign debt? A bunch of it, at least the current cycle, is a bunch of stupid things the Democrats did last year when they had power here. But no. Right now, today, and over the next 30 years, what is the primary driver? It is our demographics.

We got old. We made lots of promises. They are moral promises, they are commitments, and we don't have the cash for them. We don't have the cash flow for them, and we are going to run out of the borrowing capacity for them, but we are not allowed to talk about them because if you talk about them, you will get unelected around here because it is the see-no-evil thing.

We had a President stand behind that podium on the State of the Union and say, you are not allowed to talk about Medicare and Social Security, and everyone got up and applauded. That was immoral, absolutely immoral. In 9 years, we double poverty in America.

Last week, I came here and was showing some stories of the number of baby boomers who are in retirement living on the street and in that article it talked about how many more by the end of this decade are expected to be living on the street. This is retirement in America, and in 9 years we cut the average couple's Social Security by $17,400. That is the morality of this place, but you are not allowed to talk about it because that is difficult.

For those who are not good at math, but like pie charts, let's do this one. The entire discretionary budget--and this chart is a little off because the actual fully appropriated discretionary budget was $1.831 trillion, but we will use the $1.7 trillion because that is what they printed.

You have got to understand: What you see in orange, Members of Congress do not get to vote on. We should, but it was this politically safe thing to make Social Security, make Medicare, make veterans' benefits on a formula, they just happen. What we vote on is all of defense and the rest of what you think of as government--the State Department, the Supreme Court, our salaries. Every dime of that is borrowed.

My point here is just simple: If you have about $1.7 trillion, $1.8 trillion, that is the entire discretionary budget, including defense, and we are going to borrow $2.2 trillion this year. Every dime we vote on is borrowed, plus about $300 billion.

We will have people here who have little temper tantrums over rounding errors. Because these numbers are so difficult and so hard to get your head around, we will do the theater because the theater actually sells. Let's actually walk through how ugly some of this math gets.

I have done entire presentations of this concept of interest rate fragility. I just showed you that we crossed over the $33 trillion of borrowing. About $27 trillion of that is what we call publicly borrowed, the rest is actually transfers from trust funds.

The money that is in the Social Security trust fund gets borrowed by the Treasury, Treasury gives them interest. We are going to pay $50, $60 billion at the end of the month. It is our monthly interest that we pay out to the trust funds through borrowing. That is why I think my $2.2 trillion borrowing this year is correct. You forget about all the other bonds that have to be refinanced.

If any of you like to watch markets, go grab your phone and go look at what interest rates are right now on a U.S. 2 year. How about a U.S. 10 year?

You are at the very top of the range. You are seeing interest rates that we have not seen in a dozen years and that is what we are going to be refinancing, and here is the punch line: $9.6 trillion, $2 trillion of that will be new issue, new borrowing, but the rest of that is what we call refinancing. It is the bonds that come due.

When we are talking about these higher interest rates, it is not on the new virgin borrowing; it is on almost $10 trillion of U.S. sovereign debt that is coming to market.

There was this old adage that if I have a U.S. debt instrument that when it comes due, I will just put it right back in. That is not what happens.

Foreign governments start to roll out of U.S. sovereigns, but you also see other people that say, look, I can go get this interest rate, but now I can go buy corporate paper or I don't trust U.S. inflation, I got to go put it some other place.

If you are bringing almost $10 trillion to market in 2024, is there a chance of a stressed bond auction? Is there a chance of a spike? Sure, there is.

Now, we have some games with the fed and the Treasury we can play to gobble up an issuance, but the moment that happens, be prepared that the interest rates we have today look charmingly quaint.

This is the reality. This is what we have done to ourselves, but we are not allowed to talk about it because that requires math.

I sort of already gave this one away, but let's do it anyway. The defense appropriation bill is about $830 billion and our best guess for interest is $800 billion next year. Think about that. I just need you to process.

Do you remember the old days when you would meet a liberal and the first words are, just raise taxes on rich people and cut defense spending; we will be fine. However, interest now is pretty much equal to defense spending. Does anyone care? Will anyone talk about this? Will anyone pay attention, or will we just go back to our theatrics because there is no reporter that is going to write this? There is no blogger out there paying any attention to it.

If you are selling clickbait on the internet, you are not going to do any of this. This requires an intellect. This requires thinking. It may even require a calculator. I have just grown so weary.

How do you save a society? Remember, the very first lie: There are good things happening if we would embrace those things and run with it.

I have done entire presentations here week after week on showing if you took on diabetes--I even came here and talked about things you are not allowed to talk about. I took on obesity in America. Turns out it is the single most powerful thing from a debt standpoint and economic growth standpoint and morality standpoint of making your brothers and sisters healthier or letting them be healthier.

A handful of academics were just thrilled to death that Schweikert is willing to talk about this. Everyone else goes, yeah, but it didn't make me angry. The political class around here on the left and the right, we just sell having people be pissed off. Great. Did I mention we are borrowing over $70,000 a second?

I do this almost every day with reporters. The working middle class in this country have every right to be angry. It would be crazy if they weren't. They are poorer today than they were a couple years ago. If you live in my community, Scottsdale, Phoenix, and you are not making 20 percent more today than you were 2 years ago, you are poorer today.

This is what the left brought upon us, and when they go, oh, no, it wasn't us; it was supply chains. Read your own academic papers. Even the most moderate academic papers say about half the inflation came from the excessive spending the Democrats engaged in, their insanely named Inflation Reduction Act, and now the last several months is 100 percent the derivatives of their excessive spending. Read your own literature. You might need a dictionary.

To my brothers and sisters on the left: Take responsibility for what you did. You made people poorer and now you want to know why they are angry. Next year every dime equal to defense will be borrowed. Does that not set off any alarm bells?

Some of these next slides are just going to get geekier and geekier, but they try to make a point. This isn't Schweikert math. We grabbed these things from CBO and OMB and some of the academic institutions because it has been shocking.

We spent hours and hours and hours today trying to work on the Medicare trust fund, which is gone in 7 years. It is empty in 7 years. You have to understand how hard it was just trying to find out where that several hundred billion dollars that goes to hospitals, what is the remaining cash flow able to cover if the trust fund is gone? We will have to spend another week working on that. You think that would pop. It is within 7 years.

We couldn't find any decent research that was walking us through the math. That gives you an idea of how sick this place is. These aren't little numbers. These are the types of things you plan decades for, except we are not allowed to talk about things like that.

Look, I have been trying once again to sort of show even the numbers we know today. I am not going to take a shot at CBO. CBO's job is to do projections as they know it. But, darn it, they have been missing the numbers.

First off, the interest rates we are at, we weren't supposed to be here right now. Remember, we were all supposed to be in the economic slowdown, interest rates were supposed to be falling, so we are even doing some math just sort of showing things. Even in some of our worst case scenarios, we are off by hundreds and hundreds and hundreds of billions of dollars in additional interest if we start using these current interest rates.

We did this one because this one is the simplest to understand. If interest rates rise by 1 percent over the CBO projections--remember, CBO has already missed the projections by I think it is 1-plus percent. The fiscal year 10 years from now budget deficit will be about $500 billion more than we already expect.

Are you prepared in the 10-year window, so 9 budget years from now, we will functionally have a $3.7 trillion deficit. That is 9 years from now. This isn't a projection. This is pretty much where we are at. We are at $3.7 trillion in 9 years because our brothers and sisters on the left needed to spend lots and lots of cash, hand it out, buy their votes, buy their industries, buy their love from corporate America, which they did.

They set off inflation, and they won't admit it. They made people poorer. Now they wonder why they are angry. Now we have to figure out how to survive this.

Let's actually walk through some of the Democrats' solutions. How about we use this one, even confiscating all income over $500,000, so we will actually take--first off, the deficit number on here is absolutely wrong, but this is an old chart. If you took one of the Democrat proposals saying if you make $500,000, the next dollar is all government. You pay your regular taxes, and then if you make over $500,000, every dime over is government money. It is Federal Government money, not your State and local. The Federal Government takes every dime of it.

We are now actually seeing a deficit projection of a couple trillion dollars next year. Taking every dime over $500,000 produces about $1.5 trillion. It wouldn't even come close to covering this year's deficit. This is taking every dime over $500,000. Huh? I was told by Bernie Sanders we would be fine.

I have done this dozens of times, so I am not going to belabor it. We have actually--one of the real ways you would do this sort of math is you do it by percentages of GDP. We did those, and we walked people through showing that all the Democrat tax proposals of confiscating money or doing something that is probably unconstitutional, we will know probably this time next year, of taxing and confiscating unrealized capital gains; you know, the oligarch taxes and those things some of the hard left are pushing where you actually just say, well, you have got a building, you have a family business, you owe us 8 percent of the business.

This is a chart, and this one is easy to find. Just go Google Manhattan Institute, Brian Riedl. He has done all sorts of charts like this where he just takes CBO numbers, OMB numbers, and makes them sort of understandable. You see all the little tax ideas don't get you anywhere close, but we can lie and pretend, right?

Let's do a little more of this. As you start to understand the drivers of what is going on, remember, I told you one of the deep, dark secrets we are not allowed to say, 100 percent of the borrowing that is scheduled for today through the next 30 years, Medicare is 75 percent of it, Social Security is 25 percent. That includes interest, so if you want to throw interest in there, but that is rolled into those, the financing of those programs. The rest of the budget is actually pretty much flat.

When you look at charts like this--and you can find this one everywhere; I think we have even put it up on our website--you start to understand, when you start to see the explosion here, these three lines are net interest, Medicare, and Social Security, and everything else just lays flat or actually falls as a percentage of discretionary. However, we are not allowed to talk about this because it doesn't fit the narrative where the political class has not told the truth.

Let's be honest, those of us on the right, it is waste and fraud, it is foreign aid, and then the Democrats are saying, rich people don't pay enough. I am going to show some more rich people don't pay enough slides and show you complete fraud in math.

Then there is the thing I am fixated on, and I am going to do more on Social Security because I am not comfortable enough with my Medicare numbers yet, but you have got to understand, highway trust fund, that is gone in 3 or 4 more years. Okay. It is big, but it is not ginormous. The Medicare trust fund, we have gone in 7 years. It is big, but it is nothing compared to Social Security, which is gone in 9 years.

Did anyone notice something there? The three big trust funds are gone within this 9-year window. How much discussion have you heard on how we are going to recapitalize these? We have a moral obligation to keep Social Security. We have a moral obligation to keep Medicare functional. Anyone here talking about how to do it?

I have come behind this mic over and over and over walking through how you could revolutionize the cost of healthcare. You have got to be willing to legalize technology. It turns out that upsets people because much of this is all about the money, but there are so many things we can do. There are so many good things happening out there, it is just will we allow the good things to come to us before we have got ourselves in such a debt crisis that all we are doing is just paddling to survive?

All right, let's do the thing that they train you the day after you get elected, a bunch of really smart consultants sit down with you and say, David, welcome to Congress. There is this thing called a third rail. It has something to do with subways. I am from the desert. We don't have subways. You are not allowed to talk about things like Medicare and Social Security because they will run nasty ads about you, and you will get unelected.

Therefore, let's tell the truth, let's talk about Social Security. In 9 years--it could be 8 years--this chart has a mistake on it; this is 2033, not 2034. In 2033, the Social Security trust fund is empty, and that causes about a 25 percent cut to the average recipients in America. This is 9 years away. That average cut will be $17,400, as we had testimony in the Ways and Means Committee. That will double senior poverty. Doubling of senior poverty is 9 years away.

I was here on the floor last week already showing you that because of rents and other things and Bidenflation, you are already seeing the number of baby boomers in retirement who are ending up homeless. This is 9 years away, $616 billion.

When you show this to someone on the left, Well, David, if we would just tax people over $400,000 a year and not give them any benefits, but we make them pay the entire 12.4 percent FICA tax, we are going to be fine. Then you do the math, and you realize they have never actually put a calculator to that, have they? One more time, in 9 years, $616 billion is the shortfall. In 9 years, everyone is getting a 25 percent cut.

Let's do the first suggestion given to us by our Democrat colleagues. Just create a doughnut hole. You pay your FICA tax up to $160,200 today. It will go up with inflation over the next few years. You create a doughnut hole, then people $400,000 and up, you get to pay the 12.4 percent tax from that to the sky's the limit, whatever you make, but you get no benefits for it. It turns out our best estimate, we have to work at these numbers to do this because for some reason no one wants to actually put these on charts. Our math comes out to about $86 billion.

You remember the chart before, let's do this again. Sorry, but this is important because almost no one ever wants to talk about this. Do you see the $616 billion? That is the shortfall in 9 years. Take taxing people the full FICA portion of Social Security at the 12.4 percent produces $86 billion. Does anyone notice a math problem?

Let's do the hard left suggestion, David, we just need to get rid of that Social Security cap. We will let them have benefits up to that $160,200, but every dime above that still pays the 12.4 percent tax, but you don't give them any benefits.

All right. So this is lifting the cap. I have had some of the most arrogant leftists over and over say that solves the problem. Does it? One more time. The shortfall in 9 years, our estimate is $616 billion. Lifting the cap, our best estimate produces about $164.7 billion. You get about 20 percent of it.

This is what the brain trust around here has as the solution. We are going to force the Republicans to just lift the cap on Social Security taxes, and we will be fine.

Really? Really? You have $420-some--$427, $428 billion, you are still short. That is in the first year. That is in one year. You are still doubling senior poverty at these numbers. This is the left's plan for us?

Come on, people. This shouldn't be Republican or Democrat. We had a President get behind that microphone and say we are not allowed to talk about this.

Please understand, it is absolutely just abysmal that we are going to spend the next couple weeks doing theatrics and fighting, and we will scrape out some savings, but those savings are going to be tiny compared to the scale of this sort of nuclear debt bomb.

This isn't way off in the future. This is no longer about your kids and your grandkids. This is you. This is your retirement.

Let's actually do a couple other pieces of math that really upset people, but it is math. Okay, we are going to do something called expected present values. Why this is important is you have a lot of folks who somehow believe that they have paid in stunning amounts of money into Social Security and Medicare and they are getting cheated. In some ways you actually are, but it may not be what you think.

What we are trying to show is lifetime taxes, lifetime benefits. The blue here, or is that purple, is Social Security, Social Security. Medicare and Medicare. On Social Security, the average couple, you get every dime back plus about $72,000.

Now, remember, if 25 years ago when George Bush tried--and he was absolutely nuked by the retirement--I have got to come up with a name for the folks that basically want to nationalize retirement and the Democrats. President Bush ran around saying could we just take a sliver of it and allow people to have their own private account? Oh, you are trying to privatize. Too late now. That window is long past.

You are going to put in several hundred thousand dollars into Social Security through your taxes. This is an average couple who works their 40 quarters. You get about a $72,000 SPIF. It would be several times more than that if over those working years you had been allowed to put that 15 percent or so into a private account, but water under the bridge. This is the left's brilliant economics.

Primary driver of debt, though, turns out this is the lifetime Medicare taxes. It is about $200,000. We are still working on updating the number, but our newest number is maybe just shy of $700,000 per couple on the benefits they are going to get from Medicare.

Does someone see a problem? Average couple--remember, there are 76 million baby boomers--that couple will put in a couple hundred thousand in Medicare, and they are probably getting close to $700,000 in benefits. That gap right there is the primary driver of U.S. sovereign debt. Almost no one will ever tell you that.

Mr. Speaker, the reason I keep coming behind this microphone is I truly believe there are people out there in the public that want to be talked to like adults. Yes, some like getting the stimuli of having someone say something angry and crazy, but that is not how you save the Republic.

There are ways to stabilize this. There are ways for this to be another ``American Century,'' but that clock is ticking on us. Do you think we are going to recapitalize if the Medicare Trust Fund is how many billion dollars of shortfall starting in 7 years? I just showed you Social Security is 616 in the first year; transportation is also gone in that time. Plus, we are heading into 3 trillion-dollar-year deficits at the end of the decade. We are going to do 2.2 this year.

This is moving away from us very, very, very fast, and I do need people out there to understand the difference between a million, a billion, and a trillion. Play with your calculators to see how many zeros are the difference. Don't let someone trying to get your vote pander to you by making crap up if they are not being serious with you.

I will argue, this is the thing that destroys your Republic. This is what will make you much less free. This is what will take your freedoms from you, destroy your retirement, and heaven knows the misery we are leaving to our kids.

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