Fun with Math
Floor Speech
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Mr. SCHWEIKERT. Mr. Speaker, to begin, I am going to yield to Chairwoman Foxx, and then we will have some fun with math.
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Mr. SCHWEIKERT. Mr. Speaker, the good news for the team here, I am not going to use the rest of the hour. I promise you I am not going to go that long. That is the only happy part of this I have for you because I thought I would actually use this week, I would come and show you all the creative ideas we have to take on debt and deficit and get wages growing.
Mr. Speaker, we had an incident today where the Budget Committee was inviting Members to come in and sort of give our priorities.
My comments to the Budget Committee--I brought them some work that has been done by the Joint Economic Committee economists. One of my only joys I have here anymore is I am blessed to chair the Joint Economic Committee. I have a handful of Ph.D. economists. It turns out they are really good at math. I handed it over. I said that we need to tell the truth about math. I say this almost every week, and I beg for someone out there to hear it.
Regarding debt and deficit, we are buried in debt, but it is primarily interest and demographics. I would love to blame the Democrats. They want to blame us. I have shown over and over that, as a country, 40 years ago, our fertility rates started to fall. I am going to show it on the board.
This year, we functionally have double the number of 65-year-olds as we had 20 years ago, but we have the same number of 18-year-olds. It gets worse next year. The year after that, it gets worse. The year after, it gets worse. Yet, we built Social Security, Medicare, and these things on a model that had population growth.
Mr. Speaker, I am only one-third through the paper. It is always dangerous to come behind the microphone and act like I know what the hell I am talking about. Let's actually walk through it.
This was brought to me by some of my economists. The National Bureau of Economic Research has a number of folks from Cambridge. It is not Cambridge, England. It is Cambridge, Massachusetts. There are little institutions hanging around there such as Boston University, MIT, Harvard. Apparently, they are freaking good at math.
The headline here should actually make us pucker up, ``Measuring What Matters: Why Italy May Be in Better Fiscal Shape than the U.S.'' Then, we go in here and start to understand the punch line of this paper. I will do my best to describe this.
Please, someone out there, if there is anyone listening, it basically says that if we keep things the way they are--the current tax policy, spending policies, and pension policies--to cover Social Security, Medicare, military retirement, and Federal employee retirement, it will require 104 percent of the income of the next generation.
This isn't building bridges. This isn't modernizing the military. This is just the retirement system of the United States. Doing so requires levying lifetime net tax rates exceeding 104 percent.
We need 104 percent of the next generation's income. It is not 100 percent of their income but 104 percent of their income to meet our pension healthcare obligations. Is that going to work? We have the research.
How many people are going to come behind this microphone the rest of this year and the next year and actually say: Hey, we have a demographic problem. We have a spending problem.
Let's actually walk through some of the things we do know. Every day, I send out something called the ``Daily Debt Monitor.'' It is a text message. We have a few thousand people who subscribe to it. We have probably a lot more people who don't want to get it. It tells us how much we have actually borrowed.
Mr. Speaker, this always goes on. This is the conflict between the White House, Congress, and those of us who actually have some responsibility on spending, budget, economics. They say: David, you are scaring people by telling people how much we are borrowing so far this fiscal year.
Think of this. We are what? I should have calculated this in my head before I got behind this microphone. What are we, 73 or 74 days into this fiscal year, Mr. Speaker? In that 70-some days, we have already borrowed $788 billion as of yesterday. If we stay at this rate, we will click off another $1 trillion of borrowing. From October 1, the beginning of this new fiscal year, to before Christmas, it is another $1 trillion of borrowing.
Once again, the left will blame us. We will blame them. No one wants to have a conversation of how healthcare costs are exploding on us, and we refuse to do the things to lower healthcare costs. Instead, we will spend months around here debating subsidies because we have turned healthcare into financing and not the actual price of services and healthcare.
Mr. Speaker, I need my colleagues to think about this. That $788 billion in that 73 days or so is like $148,000 a second in borrowing so far this fiscal year. If we average it out over 12 months--I did see the number. It is like $73,000 a second if we take the last 12 months. That is what we are borrowing.
Don't worry. Be happy. Don't tell the truth. Yet, I have done presentation after presentation over these years, saying that in 8 years, 8 budget years, 30 percent of all of our tax receipts in this country go just to pay interest. If interest rates go up 1 percent, 45 percent of all tax receipts in 2034 or so go just to pay interest.
Yet, the clown show--excuse me--the Congress will find shiny objects and will find things that will enrage them. They will go really hard on getting on cable television tomorrow night and say something inflammatory so the dopamine hits.
Mr. Speaker, how often do we go home and have meetings with our constituents? There will be this one person who found something on the Internet, and it sounds like a conspiracy theory. I would argue the greatest conspiracy in our society is the unwillingness to tell the truth about basic math.
Once again, let's go back. Let's go double down. I was told ``double down'' is actually saying when I have a good hand. Maybe it is not appropriate for this. Let's see what the report says. Assuming the current generation makes no contributions to reduce the U.S. fiscal gap--that basically means taxes, contributions, and incomes stay on the track they are on, and there is not suddenly much higher taxes or much further paydown--a newborn today, a new generation today, would pay a 104 percent net tax rate.
Mr. Speaker, 104 percent of their income would be required just to cover Social Security, Medicare, military retirement, Federal pensions, and railroad retirement pensions. It will not cover the rest of government. It will not cover a new building, a new bridge, the State Department, the FBI, or the military. It is just to cover our unfunded liabilities, Mr. Speaker.
Where is the fiscal commission? Where is telling the truth?
What will happen if we don't get our act together and adopt the technology, adopt the revolutions in healthcare, adopt the things that make our brothers and sisters healthier, adopt the things that actually raise wages, or adopt the policies on immigration that maximize growth instead of the importation of poverty?
We are being handed reports that say, if you actually look at the underlying math: You are worse than Italy.
When Greece has a better credit rating--Greece, right now, can sell a 10-year bond cheaper than the United States--I struggle. Greece can sell a 10-year bond cheaper than the United States. I keep trying to find out ways to describe this. Yet, in this place we call Capitol Hill, I will walk into a room with some of the budget documents and say: Hey, I am here not only as a Ways and Means member, I am number four on Ways and Means; I am the Oversight chairman, so I chair the Joint Economic Committee, our economists have come up with some numbers we really should talk about. I look around and everyone is getting up and leaving because we don't want to know.
So let's actually deal with a couple of other facts.
Remember, Mr. Speaker, last summer, I think it was July 4 this last summer, we raised the debt ceiling by $5 trillion. We have already burnt $2 trillion. So we borrowed $2 trillion of that $5 trillion of authorization.
We are doing a calculation by April 27, so in 1 year and a few months, we will hit the debt ceiling again.
Remember, Mr. Speaker, the debt ceiling is just the authorization to borrow what you have already obligated. When you get the clown show that says: You can't raise the debt ceiling. Then I say, okay, I can do that. Tell me the portion of government you want me to cut, Mr. Speaker? Because this fiscal year, for every dollar of taxes we take in, we are going to spend $1.43. I am happy to work with you. Let's not raise the debt ceiling.
Tell me the functioning half of government--because, Mr. Speaker, you have to understand the economic effects if you stop the spending. So, Mr. Speaker, what is the 50 percent of government you want me to cut tomorrow?
Consider that only about one-quarter of U.S. spending is actually voted on by Congress. We vote on defense and what they call nondefense discretionary. The rest of the spending, the rest of the 75 percent of the spending is Social Security and it is Medicare. They are the things that we call entitlements. They are earned benefits that are on autopilot.
Well, David, they stole my money.
No, they didn't. We just stopped having children.
The number is a couple of years out-of-date, but the average couple in America gets about $73,000 more from Social Security than they put in. It is a crap rate of return, but Congress, the AARP, and the union groups back in the Bush administration--this was W--when there was discussion of: Hey, can we take maybe a small sliver and put that into markets? If we had done that 25 years ago, then today's retirees and those moving into retirement would be dramatically better off.
It is too late. Remember, in only a couple of more years all the baby boomers are 65 and up. So the demographic curve is here. It is just math. It is just math. These numbers get worse. So that is the debt ceiling.
Let's actually have a little bit more fun.
Medicare. There is a trust fund with Medicare. You pay it on your FICA tax, Mr. Speaker, your payroll tax. Except we have a little problem. We calculate in early August 2032, so 7 some years from now, the Medicare part A trust fund is gone.
Hospitals are probably the largest lobbyists here in Washington, D.C. They are all up and down the hallways.
Are they ready for the 11 percent cut in spending?
Because in less than 7 years this is coming.
So let's add something else on top of that. This is the one--and I am told I need to stop cussing behind this microphone. It shocks me because I will get some very important people around Washington, D.C., who get upset with me for this portion because apparently--particularly as a guy who is in the 50/50 district--we are never, ever, ever, ever supposed to use the word Medicare or Social Security.
So let's actually have some fun here.
The Social Security trust fund is projected to be depleted in late 2032, so 7 some years from now. When this happens, then we double the poverty of seniors in America.
Mr. Speaker, if you are on Social Security, then you will get a 24 percent cut in your check. There is math and there are models out there, and you will double the poverty of seniors, and we will double the number of baby boomers on the street.
Do these two things together, the trust fund for Medicare and the trust fund for Social Security, being gone in 7 years, to capitalize it--so that is happening in 2032. If you took 2033--and I am sorry but the dates are important--and said for that full year, we are going to just reach into the general fund. We are just going to use the general fund. It is over $600 billion, and then the next year it is bigger and the next year it is bigger. So it is functionally about 60 percent of the entire defense budget, just to make up that shortfall for that first year.
Mr. Speaker, you would think something this--to use my little girl's term--ginormous would be a big deal around here. Yet, what happened in this place, because it is so perverse, is that right now there is some leftist political consultant saying: Hey, Schweikert used the words Social Security and Medicare, let's design our attack ads for the next campaign.
They spent millions of dollars in the last campaign beating the ever- living crap out of me because I cared enough to want to fix this.
When this place cares more about what the political consultants can design as an attack ad, then where is our fiscal commission?
Where is the fact that we are putting people who can do math into a small room, turning off the air-conditioning, and saying: Come up with a plan to save the future? Or is just doubling poverty of seniors functionally our political plan?
The left says that we are just going to raise taxes. I have done presentation after presentation on the floor here. I have shown the math. Every tax hike of the Democrats--so a tax on capital gains, a tax on income, a tax on corporate taxes, you can go grab the entire Bernie Sanders playbook, and we have had it scored, and you do its economic effects, and we do the maximum tax rate before the tax receipts roll over--produces about 1.5 percent of GDP of the economy.
I am so sorry for the staff because they have all heard me say this a dozen times: When we do the cuts, the actual spending cuts and their economic effects, it produces about 1 percent of GDP.
So what is that, Mr. Speaker?
It is 2\1/2\ percent.
If we do the borrowing we did from the trust funds last fiscal year, we borrowed almost 7.2, 7.3 percent of the entire economy, then does anyone see the problem?
We borrowed over 7 percent, but all the solutions of raising taxes and cutting spending over here come in at 2\1/2\ percent. It is called a fiscal gap.
But, David, you are not allowed to talk about these things. We need to just pretend.
What sort of pretending is it going to be in 7 years when grandma gets a 24 percent cut in her check and when the hospital won't see her because they had an 11 percent cut in their Medicare compensation and they no longer can afford to see seniors?
This is coming. This is real. This isn't pretend. This isn't feelings. It is called math.
Please understand. I am giving up. I have spent one-and-a-half decades of my life behind these microphones running around here and actually producing actual legislation to fix it. I can't even get my fellow Members of Congress to cosponsor the legislation just to take on fraud in Medicare part C, let alone fix things. You know, David, it has the word Medicare, and we are not allowed to say that.
I need to do a correction from last week because I was going so fast at one point, I didn't describe this chart well enough.
I was actually trying to just say that tax collections are up, but capital gains are up 64 percent. Remember, Mr. Speaker, capital gains are only about 7 percent, where income taxes and taxes on wages are up 5\1/2\ percent. That is amazing. However, remember, Mr. Speaker, income taxes are over one-half of all income into the Federal Treasury. I didn't want to say: Hey, 64 percent of all tax collections are up because of capital gains. That is only the little sliver that is capital gains.
A 5.5 percent increase in wages is amazing. The problem is that spending is up about 9 percent. If we could just hold our spending flat--except our problem is our demographics. This year, every day we have 13,000 of our brothers and sisters turn 65, they move into their earned benefits. We made a social contract.
In 1990 or 1991, when the fertility rates in the United States started to roll over pretty hard, we never built a model saying, oh, heavens what happens when you don't have enough young people.
Let's make some more people mad with the truth. The customs duties, the tariffs, have actually been very helpful. They are important. I actually think we need to come up with a much broader scheme on international tax collections, particularly imports and dealing with other countries and their value-added tax, what we call a VAT tax, and how they arbitrage or they refund it when you export to the United States. However, if we send them something, they attach their VAT back on. It gets a little confusing.
We actually held a hearing today in Ways and Means on the international tax system because if the Supreme Court, whether it be this month or in the coming months, changes the President's authorities on tariffs, maybe those of us on the tax writing committee should step up and do our job.
I need to tell you the truth about the math. Let's have a moment here. Let's do 2025. That is the chart here. The $77 billion you see right there on the chart, that was already the law. That was before the Trump Presidency. That was tariffs. Customs duties is the proper term.
The President added other rules, mechanics, tariffs, customs duties. They gave us another--a total of $155 billion. That means we collected, in the 2025 fiscal year, an extra $118 billion. That is a lot of money.
Remember, in 2025, we were borrowing $6 billion a day. You can do the basic math. That is like 18 days of borrowing, was the increase we took in 2025.
It is helpful. It is helpful. Do not walk away from it, but also don't make up numbers that it is going to pay off the debt.
In 2026, we modeled that the base tariffs, base customs duties, would produce about $84 billion. Wonderful. The total we model is $324 billion, meaning we are going to get an extra $240 billion this year, if President Trump's tariffs are allowed to stay in. It is really helpful, but it is basically 1 month of borrowing. It is 1 month of borrowing.
If you go on cable news tonight or cable talk and you say: We are going to get a refund--math is math, and I really wish this body would get better at telling the truth about it.
Just a couple more boards, then I am going to give everyone back their life. Then I will go home and deal with the angry text messages I am going to get from people who don't like it when I tell the truth.
You don't want that one, but it basically says CBO actually did some remodeling, and we calculate that total customs duties over the next 11 years will bring in about $3 trillion. That is a lot of money, very helpful.
But you have got to understand, over the next 10 years, what took us 240 years to build up in debt, we almost double in the next 10. It is estimated by 2035, we are somewhere around $63 trillion to $65 trillion in debt. You actually start to see the squeeze where publicly sold debt, compared to borrowing from the trust funds, goes because we are depleting the trust funds so there is less money so borrow out of them. In the next 10, 11 years, we almost double what took us 240 years as a country to build up in debt.
Here is the thing that is really hard to talk about. I actually saw Elon Musk this last week saying: We have got to have the productivity. We have got to not be afraid of AI.
I wish he would also talk about synthetic biology and all the cures and the fact that we are curing diseases. The President did an amazing thing of getting the prices down on glutides. We know obesity is almost 47 percent of U.S. healthcare spending. If we could cut that in half, could you imagine the growth of the economy, the family formation, the savings to the debt and deficits, if we helped our brothers and sisters get healthier.
There are policies that will work, but you never hear them evangelized behind these microphones because either they are complex or they don't set off a dopamine fit of anger.
We have got to deal with this reality, and this basically says demographics. We have fewer 18-year-olds than we did 20 years ago and almost double of number of 65-year-olds. That is going to continue. It is happening all over the industrialized world. We are actually in much better shape than so many other places in the world.
But we don't tell the truth, saying, hey, it is math. We are going to have to find a way, because we are magically not going to have millions and millions and millions of people in diapers, little people.
I am 63 and my wife is 63, and we have a 3-year-old and a 10-year- old. I am optimistic about the future. I had better be. Either that or my kids are coming to my nursing home. Sorry. I didn't mean to say that. This is the reality we are up against.
Just one more board. This is hard to see. It is important for anyone who is actually listening, who actually has a fondness for basic math. This isn't that complicated.
We now model, in the Joint Economic Committee Republicans, that there is over a 50/50 chance that the United States, this calendar year--so 2025, the calendar year we are in--will be close to zero population growth.
Why is that a big deal? We built our Social Security system, we built our Medicare system, and we built much of our entitlement, our earned benefit system, on a concept that we grew population-wise and therefore grew economically, therefore we grew in GDP, therefore we grew in productivity, and therefore wealth grew in the country for everyone.
What we are trying to show in these charts is, you can see from 2004 to 2024, the difference--this was under 18. We functionally have the same, but the number of those 65 and up going from 36 million to 61 million. Yet what is fascinating is if you go with no immigration, or even with immigration, we still end up upside down. It is just demographics.
Yet when the President tries to talk about this, he gets attacked. When people like me try to say there is a way to set off productivity so we don't live poor, that the future is prosperous, that this is another American century, instead we engage in sort of clown-show type politics because we want to satiate the theater instead of the economics.
There is a path to do amazingly good things for your retirement and for my kids, but the fact of the matter is that, Matthew, my 3-year- old, when he hits 23 or 24 years old, every tax in the United States has to be doubled just to maintain baseline services.
Have we really made the moral decision that the next generation lives poorer or will be poorer than we are? Is that what America has become about? It doesn't have to be that way.
Are we on the cusp of an amazing productivity curve with artificial intelligence, with synthetic biology curing diseases, and with robotics being able to produce products cheaper and faster? Possibly, but you have to understand that we have lots of laws that this place has made that it is illegal to modernize a port. It is illegal to modernize a rail system. It is illegal to actually adopt technology that can read your body at home and prescribe to you.
We have barrier after barrier so that when we talk about deregulation to make the economy grow, we also have to talk about the deregulation that the armies of lobbyists in our hallways are here to stop us from doing because it will force a change in their business models.
Once again, it can be another American century. The future can be absolutely amazing, but we need to get our act together and stop lying about the numbers, tell the truth about the demographics, and then actually think boldly. We can do amazing things. I just haven't had an amazing conversation around here in years.
Mr. Speaker, I am going to go and apologize to all of the people I have just made mad.
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