An Honest Discussion About Math

Floor Speech

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Mr. SCHWEIKERT. Mr. Speaker, first, I am going to ask everyone's--let me extend an apology. I have fairly severe asthma and just got off an attack, so I am pumping down some inhaled steroids, just routine.

Also, last weekend, I lost my voice. Should I be worried that my wife said it was the best weekend of our marriage and that staff was thrilled and upset I got my voice back?

Here we go. This is like my therapy hour, because I have some things I think we need to share. One of the number one things I want to accomplish tonight is please let there be some of our incoming Members' future staff and the Members themselves listening.

I know there is no one in the room. That is the way it is supposed to be. People are supposed to be in their meetings and reading and trying to understand what is going on. Don't fuss at people for not sitting here. We are on probably a thousand televisions around the Capitol campus.

One of my frustrations is--we just got off election season. Would you believe during elections, people--what is the term? Oh, yeah--make crap up. We need to have an honest discussion about something called math. Let's actually have some fun.

Have you ever had someone say that we are going to grow ourselves out of the debt and deficit?

Let's actually do some math off the top of our heads. This year's debt is going to be $2 trillion. How much does the economy have to grow to produce enough tax receipts to cover $2 trillion? It is actually fairly simple math.

Mr. Speaker, 1 point of GDP is about $300 billion, so you get about 17, 18 percent of GDP in tax receipts. So let's see if $300 billion, 17 percent is $48 billion, so if 1 percent of GDP growth only gets me $48 billion, you do realize that means you, in a single year, have to have 40, 41, 42 percent GDP growth to cover the debt and deficit of this year.

It is absurd. I beg of people: Learn your math. Mr. Speaker, don't let the political consultants make crap up and then put it on our brochures and then tell you to go out and say it.

It is now time to do adult-like math and the understanding--and I am going to do this three or four times tonight--every dime of deficits from today through the next 30 years is the very thing we are not supposed to talk about.

It is demographics. We got older as a society. Our brothers and sisters who worked their 40 quarters and who paid into the system now start to get their benefits.

Mr. Speaker, if you actually look at the inputs of debt the last decade, but particularly what we expect the next three decades, healthcare, Medicare, interest--then, 9 years from now, do we backfill Social Security or do we double senior poverty when the trust fund is empty?

We are not supposed to talk about those things. Actually, I need to share something. I believe the Democrats engage in something--I won't call it evil, but it is absolutely dystopian and cruel when they basically attacked members of the Republican Party for actually talking about ways to save Social Security. Even mentioning it and having the conversation, they do an attack ad on you, and then you wonder why they come back and say that we need bipartisanship, that we are going to work together--except you are not allowed to actually say anything that actually has a basis in a calculator. It is perverse.

Mr. Speaker, is the left actually okay, in 9 years, doubling poverty of seniors in America? We already have reports right now of baby boomers who have retired and are becoming homeless because of the inflationary cycle we just went through not being able to pay their rent. It is just this level of cruelty.

The solution isn't spending more and more money because we don't have it.

Let's actually walk through a couple of the other bits of math here. I was talking to some constituents this week. Actually, I was listening to them because I had almost no voice. One of them was talking about some things they saw in the press: What would happen if we got rid of this department or this department? I did the math for them.

For the entire civilian nonuniform workforce in America, last year's salary cost was about $213 billion. Think about that, Mr. Speaker. If we are borrowing $2 trillion, if you fired every nonuniform person in the Federal Government, every one, they are all gone, you just covered 10 percent of the shortfall this year.

There is a lack of understanding of the scale, so we are going to actually do a little bit of that.

First, I thought tonight I would come to the floor and say that we just crossed $36 trillion. We are close. We are very close. It looks like the Treasury may have reached into a little bit of their cash supply.

Remember, Mr. Speaker, Treasury sometimes keeps from $400 billion to $800 billion of cash. $500 billion is more normal, but we will hit this before the week is over.

Think of that, Mr. Speaker. We clicked off another $1 trillion, from $35 trillion to $36 trillion, and we did it in about 113 days. The projection is that we will go from this $36 trillion to $37 trillion in about 100 days.

Think of that, Mr. Speaker. We are functionally borrowing about $70,000-plus a second.

Walk through this math. Let's actually try to get a sense of what is going on. This chart is a little hard to read, but I want to make a point. I have done entire floor presentations here of showing here are all the tax hikes that the Democrats have proposed and have been scored, and then you do the economic adjustment and functionally get about 1.5 percent of GDP. The things we want to cut, if you go to nondefense discretionary, Mr. Speaker, and cut almost one-third of nondefense discretionary, it is about 1 percent of GDP. You have our 1 percent, their 2.5, you add that together--excuse me, 1.5, our 1 percent, you have 2.5 percent.

We borrowed just a little under 7 percent of the economy this year. Does anyone see a math problem when the left's tax hike solutions and our cut solutions get you 2.5, and we are borrowing close to 6?

The reason I have this chart here, functionally, in 9 budget years, we go from a little under 6 percent of the entire economy being borrowed money by the Federal Government to 9.2. That basically means, in about 9 budget years, we are borrowing close to $4 trillion a year, and that is on the baseline right now. That is with all of our taxes going up after next year. That is with none of the new programs and none of the new spending. That is just where we are at today. That is current law.

Does anyone see a math problem? At what point does the bond market come in here and say that you guys are, by the end of the decade, approaching 9-plus percent of the entire economy in borrowed money, so maybe we need a higher interest rate?

Has anyone paid attention to the bond market the last 3 weeks? Mr. Speaker, have you noticed that even though the Fed started to lower interest rates, we are still sitting 4.4 or 4.5 on a 10? Does anyone understand that is almost a full point higher than we expected at this point in the cycle?

Mr. Speaker, do you understand what 1 point of interest means? Today, interest is the second biggest expense in the Federal Government. Last fiscal year, 14.1 percent of all of our spending was just interest.

We have an economist as part of the Joint Economic Committee, and we are trying to model at what point does interest and the obligation to pay it start to consume so much of our future.

Then, you get yourself in the debt spiral where interest rates keep going up because you are considered riskier, and you are in this interest trap. You almost don't have enough to cut. We are going to show that to actually deal with the interest trap.

A point of reference, think of this, Mr. Speaker, the United States is number 14 on the credit stack, meaning there are 13 other countries that can sell a 10-year bond cheaper than we can. When Greece today can sell a 10-year bond cheaper than the United States, when Greece today is actually paying down its debt from the last decade, and we are borrowing $71,000 a second, does anyone see a problem?

How many people have you seen come behind these mics and how many people on the election trail stood up in front of you, Mr. Speaker, and said that we have a problem?

I can stand here and promise you all sorts of stuff, buy your vote, that we have actually no money to pay for so we are going to just put it on your retirement or your kids' credit cards because that is what we are doing.

Understand, Mr. Speaker, we have almost made a decision that, in the next couple of years, Congress isn't going to run this government and the President isn't going to run this government. The bond market is.

Last year, we had to bring in almost $10 trillion to market, $2 trillion new issuances, and everything else was refinanced.

If anyone is a finance or bond geek, the bonds we are issuing, we have been staying very short in the curb, meaning we refinance and refinance. It means you become very fragile to little hiccups in interest. God forbid the bond vigilantes figure out there is some way to start to screw with U.S. sovereigns.

This is important. This is just the baseline math. In 9 budget years, 9.2 percent of this economy will just be what we borrow in debt, and this is a calculation with no wars, no pandemics, and no recessions.

Mr. Speaker, do you really think we are going to go the next decade without a moment when the wheels are coming off?

We are living on the edge, yet do our brothers and sisters and does our new incoming freshman class understand how dangerous and fragile we are about to make the greatest republic in human history?

Remember, Mr. Speaker, the world, not only the United States, but the world needs the United States to be prosperous. Prosperity is moral, and we are squandering it.

Let's actually just work through some basic math. Here is one of my great, intense frustrations. Here is basically fiscal year 2024 to date. We shouldn't have done to date. We should have just done the whole date, but we didn't want to reprint the board.

The ratio I want to point out is that everything you see here in the red, Mr. Speaker, is individual income taxes. We are a country that lives on individual income taxes.

Do you see this big blue there? That is functionally Social Security, but we don't touch Social Security. Social Security functionally goes to Social Security. A bit of it is unemployment, and a little bit of Medicare, but we don't get to touch the FICA tax. The fact of the matter is every month what we collect in payroll taxes for Social Security actually isn't enough money for the checks that go out that month.

Every single month, we collect the payroll taxes from your labor. It comes into the Treasury, actually, and then it is sent over to Social Security. Then, Social Security sends a little note over to Treasury saying: Hey, I am holding a couple trillion of your bonds. I need you to cash in $50 billion, $60 billion--whatever they are short--and send us the money so we can get our checks out the door.

That is why the trust fund continues to shrink. They are cashing in every month because payroll taxes don't cover all the benefits going out the door, so you don't get to touch that.

Over here in the powder blue or whatever color that is, it will be in about $450 billion when it is all done. This is corporate income tax. What I want you to understand, Mr. Speaker, is if you take a look at all of these tax revenues, when you strip out Social Security, and then you realize that almost all that revenue barely covers our baseline spending, meaning every dime a Member of Congress votes on this year, every dime in defense and every dime of nondefense discretionary, will be borrowed money.

So you have a Member of Congress here, a brand-new Member of Congress: I get to go vote.

Every dime is borrowed.

The way structurally we are, we are also going to have to borrow probably $300 billion of what goes into earned benefits.

Does that sound screwed up to people? Have you had other Members explain this to you, Mr. Speaker? Think of that. Every dime a Member of Congress votes on is borrowed.

If you come to me and start to say, let's do this exercise--look, these charts are going to be unreadable, but I want to point out that I am trying to make a point. This is actually a bunch of the outlays. Go through all the outlays, and we are going to basically do it chart by chart.

Then, the next outlay, what would happen if I came and said that we are going to cut, but we can't cut Social Security, Medicare, and mandatory spending? Those are earned benefits, but we are going to get rid of all defense. All right, defense is gone.

Then, we will go to our next chart. We will get rid of defense, and let's just get rid of a whole bunch of the discretionary budget. We go through and get rid of foreign aid, not just Ukraine, all foreign aid is gone. Let's close the IRS. Let's close all these programs. Go through and basically wipe out--can't touch Social Security, Medicare, and interest on the debt.

Remember, interest on the debt last year was almost 14.1 percent of all our spending, but you have to pay your bills. You continue to just get rid of all government.

At what moment are you in balance? It turns out--and I know these are unreadable, but trust me on the point--you can get rid of every dime of defense, every dime of discretionary spending, and if you keep your promises of paying back your bonds, keep your promises to Social Security and Medicare and a couple of the other mandatory programs, so you just got rid of all government, got rid of all the military, Mr. Speaker, you still would have to borrow money.

When you get the brain trust that goes: If we just got rid of foreign aid, we would be fine, and you do the math and show them it is like a week, 1\1/2\ weeks of borrowing, and they just look at you with these daggers because they saw it on some brilliant Russian-sponsored X or Twitter saying that if you just got rid of this, you would be fine.

Learn the math.

You will hear the Democrats say: Well, we are going to cover it with a tax gap. We will give $80 billion to the IRS, and we will just raise more. We came here a couple of months ago, and we have done that for 2 years now. It looked like we had spent $13 billion or so, so far, in trying to do tax collections of people over $400,000, and they collected $1 billion. They had raised a fraction of a fraction of a fraction, what they were able to get the Joint Tax and CBO to score.

One of the first things we have to do when we start is we have to go back and rescore all of the frauds because it turns out there may be a tax gap out there. However, you are not going to do it with an army of people you can't hire; you are going to do it with technology.

I am going to show you the board that I get the most complaints about because almost no one wants to hear this, but how do you fix things if you are not willing to tell the truth?

Think about what a crap place this was last week. We had people come to the floor here and spend $200 billion without offsetting it, and they go: But I had constituents that wanted this money.

Great. Find a way to pay for it. In our own, we added earmarks again. We chose not to prioritize the Debt and Deficit Commission because those things would be hard.

You get up in front of a room and say: Every dime of debt for the next 30 years is demographics. As soon as I say it, you can actually see people running for the exits because, if you don't know it, you don't have to go tell the truth to your constituents. It is math. It is not Republican. It is not Democrat. It is demographics.

This is Medicare. This is Social Security in 9 years when the trust fund is gone, but this is the rest of government. This is the CBO's score on baseline right now, where the taxes are going up next year, where there are no wars, no recessions, no pandemics. This is the baseline. They still functionally have us at $115 trillion of debt.

Do any of you have kids?

Do any of you have grandkids? Do you like them?

Is it moral?

I have a 2\1/2\-year-old. Yes, I think that is moral. It is the greatest thing that has ever happened. I have a 9-year-old also, same birth mother. My wife and I, it is the greatest thing that ever happened to us, to be able to adopt these kids.

How do I explain to that 2-year-old that, when he hits 21, 22 years old, baseline says United States has to double every single tax--every excise tax, every corporate tax, everything--just to hold current services, and that our kids will be the first generation in American history to be poor?

This is the morality of this place, and it doesn't have to be that way. There are incredible solutions to disrupt the cost of government. For a bunch of the Members here, it almost seems easier for them to go cut something or raise a tax than actually pass pieces of legislation saying: We are going to adopt technology to crash the price of government. Even though it would be moral, you could make people healthier, you could make the air quality cleaner, and you just change the current bureaucratic model.

We all walk around with these supercomputers. You do realize this is part of the solution?

If anyone is listening, the four or five people who may give a damn enough to watch this, environmental crowdsourcing--YouTube Schweikert, I have a little YouTube video that is 90 seconds that I did 7 or 8 years ago. I have been trying to do that as a piece of legislation that says: Why don't we just crowdsource air quality?

You could wipe out the bureaucracy like this.

You could have a building permit, but if you screw up, we catch you instantly. It would be really good for the environment and really pro- growth and it would wipe out the absurdity that shoving paper in file cabinets makes the air look cleaner. It is basically documentation for the trial lawyers.

Do you think I could ever get a hearing here? It is creative, it is disruptive, and the air quality engineers are going to come lobby against it.

How about the ginormous drone that flies the pipeline path? We all have had this conversation over and over. We need permitting reform.

Great. Let's do permitting reform. You have to change the inputs on how you do your NEPA, your environmental study.

What happens if you could have that ginormous drone, put ground- penetrating LiDAR under it, and it runs back and forth over the pipeline path, the power line path, and it does your archeologicals, it does your soil, and it does your plant inventory? With technology, you could get much of your NEPA report written in 6 days by AI. That is thinking disruptively.

I am incredibly hopeful that our incoming President really will follow through with the brains of people like Elon Musk and others who are willing to think, saying: Is there a better, faster, and cheaper way where it is moral, our world gets better, healthier, but we crash the costs and crash the size of government?

When you show charts like this, the Democratic solution always turns out being: Well, the way we will take care of healthcare is we are going to subsidize it more.

How about if we embrace the technology that made it less expensive?

The thing you blow into that tells you, you have a virus, that orders your antivirals. Do you know that technology exists?

It is just illegal because we are allowing an algorithm to write a prescription.

We can crash the price of healthcare. Remember, the ACA, ObamaCare, was a finance bill: Who gets subsidized, and who has to pay?

The Republican alternative was better. Actuarially, it was better, but it was still a finance bill. The Medicare for All Act is a finance bill. They are not discussions of what it takes to lower the cost of healthcare.

My Joint Economic economists did something we thought was really risky, and it was shocking. We even had Democrats and Republicans who said: Yeah, you are going the right way.

Last March, we did a study. What do you think obesity will cost in America over the next 10 years?

It turns out we calculated it could be $9.1 trillion in additional healthcare costs, plus the fact that our brothers and sisters are dying. This may be the fifth year in a row where prime-age males are dying younger.

The concept of making America healthier, it may mean having to do things that are hard. It may mean reexamining the farm bill, what we do in nutrition support, how we help our brothers and sisters, but our brothers and sisters are dying.

Also, it would be great fiscal policy because it turns out obesity is the single biggest cost in government. It is moral.

Is that Republican, or Democrat?

I am sure we will make it partisan because someone will contribute to one side or the other and then we will go to war over it.

The fact of the matter is there are actual solutions that are not hacking apart government or raising everyone's taxes, but it is changing how we do things.

Right now, when 31 percent of Medicare spending is just diabetes, why do we do this to ourselves?

Why is it so hard to think disruptively, to think morally, to challenge the armies of lobbyists who are walking up and down our hallways--remember, those lobbyists aren't always corporates. They are good government groups. They are societies that just want to be subsidized. They are bureaucrats--and basically looking at all of them and saying: What is more moral: Making people healthier, or sticking more cash into the maintenance of your misery because the model right now is we spend a fortune maintaining your misery?

Put the money in things that produce cures. We are going to talk a little bit about that.

Mr. Speaker, I want to talk about how serious we are on this. We have been trying to do simple things. If you read some of the stories, The Wall Street Journal gets amazing credit. Over the last few months, they have done amazing stories on Medicare fraud.

We have pieces of legislation that functionally would use AI because it is data science. The fastest way you find fraud in government, particularly in things like Medicare and Medicaid, is data, not an army of lawyers. It is data scientists. We think we can get you $60 billion a year just on that.

Clean claims. What would happen if, just by using technology, the constant battle between the doctor and the insurance company and the healthcare provider, we just say: Look, we are going to use technology that meets the doctor's notes, meets the insurance contract. Pay it. We think we can get you $31 billion a year just doing that. It is technology.

We have looked at other things. This is already a piece of legislation, just wiping out some of the fraud in some of the employee retention. We can still pay the people that we owe the money to, we wipe out the fraud, and we think we just got you $79 billion a year.

Those are just a couple of the bills we already have. You add that up. Didn't I just show you almost $150 billion?

We need $400 billion a year to cover the tax hikes that are coming.

My point is: The way that you cut the price of government, yes, there are a whole bunch of programs we need to get rid of, but you have to understand that some of the discussions are much tougher.

If you take a look at the $800-and-some billion that is in the nondefense discretionary, you realize about 38, 40 percent of that is money we take, we borrow, and we send it to entities around the country--your city, your town, your State--that have their own taxing authority. They are programs we love, such as justice grants, other things. They are good programs, but we are doing it with borrowed money, and we are giving it to entities that have their own taxing authority. That is a tough conversation.

Mr. Speaker, when we get back in December, I am going to do a much more detailed presentation on this because this is one of those topics that most idiots like me that are in public office are terrified to talk about.

We actually spent part of our summer really digging into the math of immigration and illegal border crossing and what it does and affects because you are seeing these articles, particularly in the leftwing press: Hey, these several million undocumented immigrants or asylum seekers, look at the economic growth we are getting.

Then we overlaid it with: What is the cost? The social services, the populations, and where you are in the tax--it is not personal. It is just math.

Well, it turns out, when we dug into it, let's say you did a talent- based immigration system in America, like Great Britain, like New Zealand, like Australia, like Canada, basically the rest of the world. Okay. Let's make a point.

In the 1970s and 1980s, the world fought for hydrocarbons. Remember, no war for oil. In the last decade, it was rare earths.

The literature makes it very clear that, from today through probably the next 20, 30 years, nations are going to battle for smart people.

Remember, there is math out there. If you go look at the data on the Census Bureau's own website, it could be from 11 years to about 16, 18 years where the United States will start having more deaths than births.

We are a dying society. If we don't fix things, we are a dying society. Think of that. The shortest on the numbers is 11 years, more deaths than births.

What if I came to you and said we are going to move to a talent-based immigration system because it turns out people with advanced degrees pay a boatload of taxes, they grow the economy, and they expand GDP?

Our brothers and sisters, they may be wonderful people, but it turns out the economic effects of those without a lot of skills when they come into the United States, they actually squeeze out and lower the labor value of your domestic population that is often in those lowest quartiles.

You are the couple that didn't finish high school, but you are out hanging drywall and you are working your heart out. All of a sudden, you bring in how many people with a similar skill set. What happened to your labor rates?

That is the cruelty. What this administration did on the border was incredibly cruel to the working poor.

What if I tell you, if we do some things right in the tax code fixes, like we want expensing on research and development so we are always innovating; well, it turns out, for that to really take off and grow the economy, we need a lot more smart people.

Is it sane to be a country that invites people from around the world to come do your graduate degree, get your college degree, and then say: Congratulations. You learned the American technology, the American ethos. Oh, you have got to get the hell out of here; send them back home?

We are out of our minds, but we are the last country functionally on Earth that still has a familial immigration system, where you come to America because of who your family is. I know that seems compassionate, but, right now, I am trying to figure out how to pay for the promises we have made.

Ideas like we need to move to a talent-based immigration system while doing other things because it is a unified theory. I need this to make this work so they both raise money for the government so we grow.

Mr. Speaker, thank you for being patient with me losing my voice. The point I will make is, there is hope. There is a way you can make the math work, but you can't continue to live in this fantasy world of, oh, don't worry about debt and deficits, that it is somehow magically just going to disappear. It is magically going to do this. It is magically going to do that.

There is a way to make the math work and this becomes another American century, but we can't keep doing public policy by our feelings. We actually have to do it by a calculator and good quality economics. It is how we will stay a free people because do you understand the dystopian life our world will be when we smash up against the debt crisis?

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