Concurrent Resolution on the Budget for Fiscal Year 2025
Floor Speech
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Mr. SCHWEIKERT. Mr. Chair, I yield myself such time as I may consume.
To the chairman and the minority, I first want to apologize to everyone. I have one of my crappy lung infections, so at some point, I am going to start coughing and doing an inhaler. Just ignore me. Somehow, I thought that would be funnier.
Mr. Chairman and my good friend, Mr. Beyer, I think this is somewhat of a unique opportunity. Those of us from the Joint Economic Committee actually take math seriously. We don't always see things alike, but the fact of the matter is the Joint Economic Committee I think started in 1956. It has this remarkable history of some of the world's greatest economists coming and speaking before walking us through it. That is why, at this moment, we are going to try to do something that is special. Instead of just sort of sharing feelings, I am going to ask us to share math. Within that, we are going to walk through what is actually in the budget resolution.
This is a reconciliation budget. It is not a regular budget. This is a budget that opens up the ability, because of the insanity we go through, of moving something through the Senate and its 60 votes. With the 1974 Budget Control Act, this is the dance we go through.
The other thing I am going to try to walk through is where the actual math lays in the box that has been given to us by the Budget Committee, and then the part I am going to do, the Schweikert little bit of hope, is: Is this the moment? Is this the moment of policy that actually forces us, both the left and the right, that if there are cuts, modernization, changes, updates in methodology on how we deliver services, is this the stressor that makes us do something that is hard but also do something that is truthful.
I am also going to try repeatedly to make the point, Mr. Chairman, and show why we are primarily doing this. We have a bunch of provisions of the 2017 tax reform that begin to expire. Most of those provisions actually are to the benefit of small businesses and the working class. I will show that over and over and the distributional effects.
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Mr. SCHWEIKERT. Madam Chair, I yield myself such time as I may consume.
I have to figure out, do I sit here and just spend my time correcting things that are mathematically not true or not in the design of what is actually here or just over and over say how much I like working with Mr. Beyer because one day he will be the chair, and I will be in his position.
Let's actually walk through some basic math together. What will our spending be this year? It will be $7 trillion. What is actually in the cuts--remember the horrible draconian cuts--is $120 billion in a year. So, $7 trillion--a trillion is a thousand billion, for those of you who are math dysfunctional--let's walk through it, and $120 billion is the Armageddon.
I am probably going to end up using these a couple of times here because I think they make a point.
The way a reconciliation budget is laid out is it creates a series of boxes. Here are all of these authorizing committees. We need you to find savings. We need you to find those savings through modernization and waste and fraud.
We are going to spend a little time actually talking about some great documents even the Biden administration produced on waste and fraud, and I am sure every Member here has actually read them. We have some other articles from The Wall Street Journal on Medicare Advantage and all these others. Many of them, when all added up, are a trillion-plus dollars. Are we capable of actually being intellectually honest and walking through?
One of the charts--we are going to come back to this again--you have been hearing the Armageddon being said, that it is Medicaid.
I used to do my State's Medicaid budgets. Arizona has a somewhat unique system. We actually buy managed care capitated policies for our indigent population. It is remarkably effective, and we deliver remarkably effective healthcare cheaper than almost every other State in the country, demonstrating that planned design, managed design, can both be much healthier for our society and save money. You don't start to have those revolutionary conversations in Congress until you have moments of stress like this.
Once again, I want to add, in the document, 96 percent of the budget authority within Energy and Commerce is not touched. We are talking 4 percent of their budget authority, and that is spread over a decade. If we can't find 4 percent of modernization in these programs, we are actually in much more trouble than even just the brain trust here as we tell our stories.
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Mr. SCHWEIKERT. Madam Chair, I yield myself such time as I may consume.
I love public policy by storytelling, but this being the Joint Economic Committee, let's actually go back to math.
Madam Chair, I would say to Mr. Beyer that I want to make sure I am communicating right, but at least we are down to, instead of the Armageddon, his number was, well, if you cut $2 trillion over 10 years, that is $200 billion. He is right, but that is actually not what is in the document here. It is functionally 1.2 with a shock absorber. Once again, I will give you the shock absorber, depending on what Ways and Means ultimately does. I thank the gentleman again. It shows we actually are fairly close on math.
Another thing, and this is just someone who actually had worked on the tax reform in 2017 and the storytelling that has existed, particularly with my brothers and sisters on the left--Madam Chair, how would you feel if I could document to you that the post-2017 tax reform was more progressive? They were lower rates, but the top portion of income earners actually were paying a higher percentage of Federal income tax.
When you start looking at this, remember, this is the distributional problem that I was going to try to walk through. I believe when you do the math here, 5 percent of the population are people making stunning amounts of money. If we want to have a discussion about whether they should pay more--guess what?--this opens up that discussion because there are no rates locked in to this. It just creates the capacity to now have the discussion.
The fact of the matter is that the top 5 percent pay 38 percent of all Federal income taxes. Functionally, half of the workers in the United States pay less than 1 percent. I will take a correction if someone knows the actual number, but I think the bottom 25 percent receives more because of the earned income tax credit, which is the old negative income tax model. Look, we have a distributional problem.
If you want to have a discussion of wealth and income equality, I have some great charts to show you what inflation did, what the previous functionally 3\1/2\ years of inflation did to wealth and the working class. When you inflate up people who have assets and crush those who are trying to survive, congratulations. Remember, before the pandemic under the TCJA, the tax reforms of 2017, it was the fastest closure of income inequality in American history.
What is being discussed here is whether you allow those very tax benefits for small businesses, for individuals, to expire. We don't get a huge economic pop from continuing them. You maintain consumption. We know if you don't do them, that loss of consumption in those populations actually really hurts us economically.
I am going to reserve in a moment, and then, we are going to come back and talk about some of the other provisions that are just, once again, Madam Chair, trying to create the capacity so we can actually have the more elegant debate of what should the distributional effects be and where do we get the most economic growth from?
The next time I come back, let's actually do a bit of where the economic growth can come from, and we will walk through the model of expensing and those things.
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Mr. SCHWEIKERT. Madam Chair, I yield myself such time as I may consume.
I actually made a board for what the gentleman's point was, showing, within this reconciliation budget document, how much additional tax cuts are there for C corporations. There is your board. I am being a little sarcastic, but that is sort of a personality trait.
The fact of the matter is, once again, the talking points don't match up with the reality here.
Everyone in this room, your taxes go up at the end of this year. If you run a small business, a passthrough, not a C corporation, a passthrough, your taxes go up. If you are part of an employee-owned company, so you have come together and you are managing yourselves almost like an employee co-op, your taxes go up.
Also, I hope but don't know if the capacity that this creates will allow us to do it, but I sure hope so. We have some great data, and I won't make you live through my charts that show expensing, research and development expensing and expensing. It has a cost in the 10-year window.
Hopefully, everyone has listened to my dozens and dozens of speeches walking through what expensing is. Expensing is nothing more than depreciation. Do you take the expense in 1 year or, let's pretend, 7 years? You still get the exact same amount of reduction on your taxes. It is a timing effect. The difference is if you can't take it in the first year and you do it over 7 years, you have to finance it.
We have great economic modeling that shows when you do expense research and development, when you do expensing, you get a virtuous cycle of: We bought the piece of equipment, so we do it better, faster, and cheaper. Our competitors just did it, so the next year, we have to do it again.
That was one of the reasons, particularly prepandemic, we had that sudden spike of capital expenditures and productivity. The punch line on that is that does not exist now. It is our fading out for those C corporations, which had their rates already locked in, but also for all those other small businesses to make those capital expenditures.
Why is this really important? Well, there is a lot of data that shows that part of the tax code actually does, from an economic growth standpoint, create incredible vitality. It is a timing effect. It is the tyranny of living within a 10-year window in our models. I just hope that starts to elevate a little bit of the economics discussion instead of the storytelling.
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Mr. SCHWEIKERT. Madam Chair, the average family would save $2,853. That is your crumbs.
I would argue, for the average family that has been crushed by the previous 3 or 4 years in inflation, if you don't make 27 percent more money in my district, you are poorer today than you were 4 years ago. They were having their taxes go up $2,853, and that is the average.
I promise you, Madam Chair, I think in my district it was closer to 3,300. I am blessed to have a more prosperous district. That is not crumbs, Madam Chair.
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Mr. SCHWEIKERT. Madam Chair, may I inquire as to how much time remains.
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Mr. SCHWEIKERT. Madam Chairwoman, I yield myself such time as I may consume.
Madam Chairwoman, can you believe this? We broke our printer. However, thank heaven we didn't break the markers.
So I thought actually just because we are trying to do fact-based, the average family's taxes are going up at the end of this year $2,853, and 62 percent of taxpayers will see hikes.
I am sorry, we just didn't have time to make a much prettier chart for everyone.
Remember that after 2017 we actually moved up, some of that were some of the deductions and things that were added, we moved up the threshold, so almost one-half of our taxpaying population actually didn't pay income tax. They still had payroll taxes and FICA and those things.
A bunch of that population that has not paid taxes in years and years and years will be getting tax bills with the opposition to this.
Madam Chair, we are going to come back and go over more.
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Mr. SCHWEIKERT. Madam Chair, I yield myself such time as I may consume.
Madam Chair, once again, here is the budget document. Here are spreadsheets. I keep hearing: You are giving away to billionaires.
Where is that?
Where is it?
Madam Chair, it doesn't exist because this is a box that allows us-- and understand, Madam Chair, I am passionately concerned about debt and deficits, but this may be, for an idiot like myself, the first opportunity where members of leadership and those are ready to allow people like me to come in and walk through how we can improve and change the costs of how we deliver services, and we need this type of document to do it.
Madam Chair, you deal with the reality of what we are allowed to touch. You do realize the majority of mandatory spending we are not even allowed to touch in a budget reconciliation because it is interest and Medicare is the majority. Every day we wait to modernize, we are in that much more trouble.
The last thing before I do a yield here. We are going to spend $86 trillion, and I am partially doing this off the top of my head, over the next decade.
This budget reconciliation we are hoping to get, let's say we are blessed and we get $2 trillion in offsets, so that creates a couple trillion dollars in additional borrowing, we are talking a fraction, a couple percent of the spending, Madam Chair.
I would argue this is the moment for us where it is not about cuts. If any of us has ever just even bothered to look at the MedPAC reports, and this was done by the Biden administration, we have potentially over a decade hundreds of billions of dollars in here that aren't going to services. They aren't going to make our brothers and sisters healthier.
Help us. Help us engage the morality of doing this better, faster, and cheaper.
Madam Chair, I yield 2 minutes to the gentleman from California (Mr. Valadao).
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Mr. SCHWEIKERT. Madam Chair, I yield 30 seconds to the gentleman from Louisiana (Mr. Scalise).
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Mr. SCHWEIKERT. Madam Chairwoman, economic literature and, actually, I think even the board here demonstrated that, if we go back to the original TCJA, over 70 percent of those corporate tax cuts show up in wages. That is one of the reasons there was such remarkable wage growth without inflation. If workers are cared for, tax policy becomes correct.
Madam Chair, I yield 1 minute to the gentleman from Louisiana (Mr. Scalise).
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Mr. SCHWEIKERT. Madam Chair, may I inquire as to the time remaining.
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Mr. SCHWEIKERT. Madam Chair, let me have just a couple of moments of joy here. A reconciliation budget that only touches individuals and passthrough businesses, so there are no shareholders who are getting-- that is actually already locked in.
That is one of the reasons we are doing this is because you want to see distortions in the economy, have a world where small businesses, passthroughs, employee-owned, their taxes shoot up, but the C corporations are down here. What distortion did you just create in the world?
I am a C corporation. I am buying everyone else. You want to see the big get bigger? It is one of the reasons you have to do this. Also, I beg my brothers and sisters, have a different view but actually just try to get the most basic facts correct here.
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Mr. SCHWEIKERT. Madam Chair, apparently, the Democratic position is the $2,000 you get per child, which was the doubling of the child tax credit in 2017, should go away and go back to the $1,000? Wow. I think that is what I just heard.
Those of us who have adopted kids, those who have children, congratulations, your child tax credit is going to get cut in half.
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Mr. SCHWEIKERT. Mr. Chairman, I would inquire once again on how much time is remaining.
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Mr. SCHWEIKERT. Mr. Chair, I yield myself such time as I may consume.
Mr. Chair, just as some of my Democratic colleagues have done, I was just thumbing through the actual document. I know this is crazy, and literacy being sort of a lost art, but I am trying to find where this heresy, these cuts are.
There is a discussion here that basically says we need not to just purely stick this on the debt and deficit. Okay.
In the Energy and Commerce instruction, I think it is 4 percent of the area of authorization, you are telling me after the hundreds of hours idiots like me have come behind this microphone and done presentations showing the distortions, the waste and fraud, the misallocations, the lack of use of technology, the duplications, you can't produce 4 percent?
Why is the left so terrified of the moment where maybe a document that forces us in some ways to listen to each other, to maybe say: How do we do this better, faster, cheaper? I am going to say this three or four more times. Does the left really want to raise taxes on the average American family by $2,853? Is that the plan here?
This says that 63 percent of those who are tax filers will see their taxes go up. Is that the plan here?
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Mr. SCHWEIKERT. Mr. Chairman, just because I want to help out-- because I know this is heresy around here. Truly one of my favorite Members to work with, even though we are on different sides of the aisle, he may want to retract the words ``Social Security,'' which he just said, because he knows Social Security cannot be allowed in any of this package.
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Mr. SCHWEIKERT. Oh, no. Who else has been working for a decade now to save it?
Remember, in 2033, about halfway through the year, the trust fund is gone. Is that a Republican or a Democratic problem? I would say it is a morality problem. We will be doubling senior poverty in America in 8 years.
How often are we allowed to come talk about it?
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Mr. SCHWEIKERT. Mr. Chairman, I yield myself the balance of my time to close. I know it is painful to listen to an idiot like me for 5 minutes, but let's have some fun here.
First, I want to say to everyone who has spoken, I love the passion and I love the caring. I just, once again, have to come back. This is a reconciliation budget. It basically builds boxes. This box here is for your authorization. You can go more, but you can't go less. Okay.
I am on the other side. I actually believe there should be more cuts in spending because I think we can achieve that by modernization, changing processes, and the adoption of technology.
Last week, I believe I was behind this very microphone, and we were showing charts of, hey, this is Medicare, how many billions and billions do we spend every year on duplicative MRIs, ultrasounds, x- rays? Does that make someone healthier? Does that make them better? No. It is basically waste and fraud.
We have the ability to use technology to get rid of that. If we all agreed to do something like that, then we are going to get rid of these duplicative services. We are going to get rid of some of the--we like to say waste and fraud, but the fact of the matter is there are design problems in the model. You didn't cut a single service. You didn't take anything away from someone, but what you gave is my kids a chance to survive.
Look, part of this I don't like. I am going to be brutally honest. I wish there were more cuts. I don't like the amount of borrowing here, but if this is the moment that opens up a chance for someone like myself, who has spent a decade here passionately trying to say it doesn't have to be cuts. It is actually the adoption of technology.
I am going to go slightly off track, then I want to get back into the distribution. If I turn to my brothers and sisters and anyone willing to listen right now, what is the single biggest cost in our society? This is where Schweikert soaks himself in kerosene and plays with matches, Mr. Chair.
It turns out it is obesity. For our brothers and sisters, we calculate there will be over $9 trillion in additional healthcare costs over the next decade. What would happen if the left and the right actually said we are going to fixate on the way we deliver healthcare, the way we deliver nutrition support, the way we do agriculture policy, that we are going to help our brothers and sisters be healthier, and, by the way, family formation, the use of healthcare, the ability to have a life.
Maybe it is moments like this where we go to battle in the committees. We have really smart people, but armies of lobbyists outside these hallways look at us and stress out when we start saying it is time to modernize, time to find a better, faster, more elegant way to deliver services and slow down the piling of debt because the math still comes back to 63 percent of our tax-paying brothers and sisters will see their taxes go up.
Now, for the comments you have heard over and over here about the distributional effects. Okay. Mr. Beyer and I are both on Ways and Means and battle in the committee.
Remember, there is no bill coming out of the committee yet. What is it going to look like? Do we actually have to make elegant changes? Are there things we can agree on as a body that will maximize economic growth?
At some point you have got to look--and I am sorry I have beaten up this chart, but we have been trying to model what happens to the economy if we allow these tax hikes to come in automatically.
It turns out the economy is also benefited if we maximize how much we pay for at the end of 10 years. I know changing spending policy is hard, but if we were to maximize both, at the end of the decade we are more prosperous.
Mr. Chairman, at some point that is the ultimate question here: Is prosperity moral? Is there a way we can actually do our work here where we maximize the prosperity for my 2\1/2\-year-old but also the person heading to retirement, to our brothers and sisters who are out there working their hearts out? There is a way.
The hardest part is we are going to have to do things differently than we have done in the past.
Mr. Chairman, I yield back the balance of my time.
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