Effect of Waste and Fraud

Floor Speech

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. Mr. Speaker, I know it has been a long day for everyone, but I have a couple things to walk through.

One of the themes we have had the last couple weeks is waste and fraud. I thought it would be important to actually come here and sort of show what we calculate the math to be, where it comes from, and then something huge.

Today was also the issuance of the annual Social Security actuarial report. I have not read the whole thing. I have just gone to the basic tables. I promise you I will read it over the next couple of weeks. I am going to make some commentary. Some of it is going to be based on last year's report, but we also have the CBO analysis and some of the outside groups and where the math doesn't match.

But I need all of us to grow up and understand some of the realities out there. This last weekend, I had the joy--I am traveling around the State, running for Governor, because I am leaving this insane--excuse me--this fine place. Some of the folks will come up to you and say things like: Well, if you just got rid of the waste and fraud. Look, it is huge, but I am going to show you some of the charts of what the reality is on the percentage of our spending.

From joint economists, our best estimate right now is we are going to borrow $2 trillion this year. My personal number--I am the outlier--is we are going to borrow about $2.2 trillion, but then I am a little more pessimistic. Remember, when we went into this year, we were going to borrow $1.7 trillion or $1.6 trillion. There are some games we play in that, for those who are keeping score, like: Hey, here are student loans. We are going to credit that back because we are not writing them off. Does that actually go on the books as a credit even though there is no cash that comes with it?

These are the sorts of things, if you really want to understand government accounting, that will drive you insane.

Let's first actually do some stuff on waste and fraud. This is the full kit and caboodle, or whatever colloquialism I can come up with, that estimating government fraud would cover 71 days of borrowing.

Now, remember, that is on the assumption that we are borrowing about 7-some-billion dollars a day. Take the high and the low, but this is everything. These are the bad actors from other parts of the world that have figured out how to steal from unemployment by fraud.

These are the corporations that found leakage that have actually been able to designate people as sicker than they actually are so they get the risk premiums in some of the programs.

It is a stunning amount of money. But if we borrow $2.2 trillion this year, it actually covers about a quarter of our borrowing. But when you start to think about that, it is 71 days if you actually do the mean here.

It is a big deal, but it doesn't solve our problems. My frustration is, this place has a habit of saying: We are against waste and fraud. Let's do a piece of legislation. Let's do another analysis of waste and fraud. Let's actually say we condemn fraudsters.

Damn it. How many years have some of us worked on just simple concepts? There are these things--what do you call them, Mr. Speaker? Oh, yeah, computers and data. If someone is billing and you have a dozen different organizations billing the same P.O. box, maybe you have hospice fraud. If you have a Social Security number being used over and over and over, maybe there is a problem. If you have data that says: Hey, this person is saying they made $24,000 a year last year so they deserve these credits as our society, but we have data that shows their consumption was $88,000, maybe we should look at this.

We have the systems today that we could have stopped the $2.8 billion of sober living home fraud that basically punished Native Americans in my State with a simple data system.

Is that Republican or Democrat?

It is just dragging this government into maybe this century of technology instead of doing another resolution. It is like the absurdity of--absolutely, we all vote for it--let's do a balanced budget. Great. Tell me how. I will tell you how to do it. You won't like it, but there is a path to do it.

We actually have some math that says if you told me I can balance the budget next year, I can do it. We have to cut almost half of all Federal spending because of the economic effects.

Why is it so hard for us to tell the truth about math?

Let's actually get ourselves in some real trouble here. All right. This is using the most optimistic number saying, Mr. Speaker, we are going to be able to stomp out every bit of fraud, waste, misalignment, and exploitation in this government. We are going to spend--estimated government fraud is almost 7.8 percent of the outlays for this year. That is a remarkable amount of money. It is remarkable.

Do you really think we are going to get all of it? How about if we could get half of it? How about if we could get a third of it?

Our economists think we can nail down a third of this waste and fraud if you just take some of the legislation we have worked on for years of the use of data, matching benefits, matching Social Security numbers, matching addresses, matching codes coming out of CMS, matching these things. Why is it so scary?

I will tell you, some of the lobbyists marching down the hallways hate this stuff. How many times have I come behind this microphone and say, you know, let me give you an easy, intellectual one to process?

We did some analysis almost a year ago--you are a doctor. An MRI scan, an ultrasound, a CT, an x-ray. We think there could have been $25 to $35 billion last year in duplication. You know, you bust up your knee on the ski slope, and you get an MRI. They patch you up, you go home, and a week later before the ortho is about to work, you do it again--why do it again when you can attach that scan to a simple app right here? You put it up on the screen. If it isn't good enough, then redo it. Something as simple as that, that is $350 billion on the outside over 10 years. Why is that scary around here? However, it is.

Does it annoy some of the lobbyists? Does it annoy some of the real estate investment trusts that have been putting up MRI centers? Does it annoy the equipment sales? Look, I am sure they are all wonderful people, but if you and I were operating in the real world and not in government, we would be insisting on these things that say we are not taking away benefits, we are using technology. In many ways, I would argue it makes people's lives better, faster, cheaper to stop these duplications. That is in this number we are calling waste and fraud.

Understand, when you get the politician in front of you saying: We are going to stomp out waste and fraud, and then they make it sound like it is someone from the other side of the world stealing from us, that is some of it.

However, the vast majority that is in these numbers is how we have designed benefits, how we have designed healthcare reimbursements, how we have designed these programs.

How do we work with our States, our vendors, all the bureaucracy to actually say let's just do the things that technology now allows us to do to stop the American taxpayers from being bled, being scammed.

Now, the number of times I have come behind this microphone and said Social Security trust fund, the Medicare trust fund, a little over 6 years, and I have actually had debates--as a matter of fact, we had some sparring today--where I spoke for a couple moments, and the Democrat who was speaking said: Yes, but illegals pay into Social Security.

Yes, but if you actually read the Social Security actuary report, it would have shown you, yes, they are paying into fake Social Security numbers--okay, that is a little money--but the suppression of wages that happen from the millions and millions and millions and millions of people that came across the border in the Biden years is greater than. It is in the tables.

I know, it would require reading the Social Security actuary report and maybe pulling out a calculator and doing some math.

One of the things that is going on in our country right now, particularly as we arrogantly often say: the lower quartiles of education and labor. Why are they getting poorer? Have you looked at the wage growth numbers of our working class brothers and sisters, particularly those without high skills, where they sell their labor? They are out hanging drywall, and now they are competing with how many potentially millions of people that came across the border during those years that are competing with them selling their labor. That was the great cruelty.

I know I am trying to think like an economist. I am just wired that way.

I would argue, the morality of prosperity is what we as conservatives believe in, and trying to explain all the horrible things policy wise, our inability to fixate on making people's lives better. We talk about affordability. The fastest way you get affordability is wage growth because to magically start to make prices come down, you have to change systems and supply chains, legalize automation of ports, all the things that the unions and everyone else is going to come lobby and scream at us.

Let's actually walk through a couple things that were out there in that Social Security actuary report today and from last year so there is an understanding. I got up here last summer and said my math, my Joint Economic economists on the Republican side, we were guessing about sometime in late, mid-2032. We nailed it. We got the number right.

The only controversy right now is the Social Security actuary report that came out today said it is a 22 percent cut in 6 years. CBO said it was a 24 percent cut. My folks say 24 percent cut. Both are miserable, both will double senior poverty 7 years from now. We will double the number of baby boomers who live on the street 7 years from now.

How many times have you seen people come behind the microphones today--because the report is out--and actually say, yeah, this is immoral, maybe we should actually hold hands, get the crap kicked out of us because we are telling the truth about the math? Instead, in this place--and God knows I have gone through it election after election after election--where the Democrat consultants say: Oh, Schweikert used the words ``Social Security,'' he used the word ``Medicare,'' let's beat the crap out of him.

Then you wonder why Members here are scared to death to actually save these trust funds, save our brothers and sisters who are seniors from poverty. It is because we are not allowed to talk about it. Then you will get some idiot who says: Well, we will just raise the taxes, that covers it. It doesn't. I have done presentation after presentation after presentation showing just even raising the cap doesn't come close to covering, 2033, Mr. Speaker, the money needed to cover the Social Security shortfall and the Medicare shortfall--because, remember, the Medicare trust fund is also empty at the same time. This was our calculation from last year. We actually haven't had time to recalculate. We believe it is more now with $638 billion in a single year.

There is this misunderstanding. Let's just call it a misunderstanding. I would never say people just make crap up around here.

Let's take a look, just to understand how fast the Social Security trust fund is eroding. In 2026, we have got $2 trillion in there, and it is loans to the general fund. It is paid interest. It is actually paid a pretty darn good interest rate. When people say: They stole the money. No, no, no. Just like you might have bought a note, a T-bill, a bond from the Federal government, and the Federal Government every 6 months pays you interest, and then at the end you get your money back, that is the exact same thing the trust funds did.

Here is the problem: Then next year, there is $1.9 trillion in the fund, and then you get over here, and, boom, in 2031 there is nothing left in the trust fund. Then you start to walk into 2032, and it is empty. The debate now is: What month in 2032 is it gone?

What is happening here? The checks going out the door are bigger than the tax receipts coming in from payroll taxes. Every month, Social Security says that we hold all these, let's call them magic Social Security T bills. They call the Treasury and say: Hey, guys, I have to make my monthly Social Security checks. Please send us some cash.

Treasury goes and says that, this month, they have some tax collection. They send a check from that. This month, they don't have enough, so they sell some debt.

If you ever look at the Treasury statement, Mr. Speaker, they explain how they finance it. It is called the Treasury management system.

That is how fast the numbers are eroding, and it is basically because of baby boomers. I am one of them.

What is it? There are 67 million of us born during that time, and now we are down to the last few years of them moving into their benefits. This is what happened. We functionally have a country without enough children, and we haven't had enough children starting 40 years ago. Now, we are going to pay the price for it.

You start to look at some of these, Mr. Speaker, and the reason I put this one up, and I will tell you, this is done by my economists and some of the others. I actually believe the numbers are a little more dour, but the math is the math.

Social Security, Medicare, and net interest account for 81 percent of the spending growth over the next 10 years. In 9 budget years from now, we calculate--and this is before the rise of interest rates that have happened the last 4 months. CBO calculated that in 2036, the annual debt will be $3.1 trillion, $2.1 trillion of it just being interest and the $1 trillion being the baseline deficit.

Heaven forbid, if interest rates go up, these numbers get much, much uglier. I am trying to help folks understand. Once we cover Social Security, once we cover Medicare, then we have to pay the interest bill. That is the majority of the spending growth. The rest of the spending growth, 19 percent, is everything else, and if interest is a little bigger, it is actually almost all the spending growth.

It is uncomfortable to talk about, but it is demographics.

Mr. Speaker, there is a dataset out there that says that next year we are functioning at the same or fewer children than we had 20 years ago, but double the number 65 and up. That is not Republican. It is not Democrat. It is just demographics.

Now, I would argue it is caused by a number of social policies and then other things that the Democrats promoted, but now some of us have to figure out a way to manage this and tell the truth on how we are going to keep our promises to seniors. Every day we wait, we make it a bit harder for ourselves.

Let's walk through a little bit of this. In 2026, old-age and survivors account with Social Security, annual balances are much worse than previously predicted. This is what we had in 2025. It was up here. This is population. Now, we are starting to believe our population falls further.

The problem is if you actually go and look at the Census Bureau numbers, Mr. Speaker, CBO numbers, they are actually way down here. They are actually much worse than the numbers the Social Security actuaries are using.

The head of Social Security is going to be in front of Ways and Means in the next couple of weeks, and we need to ask him why the other demographers are actually saying that fertility calculations in future years are much worse than Social Security is using.

This should scare the hell out of us because it means these numbers that are dour are actually worse.

I know some of this is geeky, but it is important. This is millions and millions of people who were planning for their retirement. How many of them are prepared for a 22- or 24-percent cut just a few years from now? Where is the morality of this place?

All I am trying to do is show on this, this is the trustee calculation in future years. This is everyone else's calculation that we trust.

Mr. Speaker, that is one hell of a gap. We need to come up with a way to either say that when we produce the Social Security actuary report, we as policymakers should actually be reading it and doing something instead of hiding from it, and maybe also add in there saying we are going to also other academic demographers, and we are also going to add maybe the Census Bureau, which has had, historically, the most accurate numbers of fertility rates.

As a matter of fact, I think there is a new number that came out that the United States is now down to 1.57 births per thousand. You realize our fertility rates are now under many countries in Europe now, Mr. Speaker, and we thought they were crashing and burning. We are.

Let's do a couple more of these. All I am trying to do is make this make sense. The trustee population projections are significantly more optimistic than other sources, Census Bureau, and Congressional Budget Office. I am saying it again another way.

These gaps, because they are calculating, suddenly we are going to actually have fertility rates going up. That is wonderful. Please, Social Security actuaries, I look forward to the explanation of how you came up with that because no one else has that number.

Understand what these numbers mean, Mr. Speaker. The national effects of Social Security insolvency is basically the depletion of the trust fund in what, 6 years, 3 months on recipients, 24, 27 percent benefit cuts over those years. The Social Security actuary report said 22. Everyone else will say 24. I will give them 22. I think my 24 percent number is more correct.

Monthly cuts exceed $500, so in 29 States, basically they are adding up how much of the population's average income they paid into Social Security. Remember, a number of people don't understand, Mr. Speaker, Social Security is means-adjusted. High-income earners get less back of the taxes they paid in. Low-income earners actually often get much more than the FICA taxes they paid in.

Mr. Speaker, if you are a poor senior, are you ready for a $500-a- month cut?

Let's take a look at my State, Arizona. Insolvency of Social Security, what does it mean to my recipients, my folks who receive a Social Security check in Arizona?

There will be estimated monthly cuts of $511, and this starts in 6 years. That will affect $8.2 billion in benefits lost a year, and 18.3 percent of the residents are affected in my State.

Mr. Speaker, this is an avalanche coming at us. It is really hard to fix. It is really expensive to fix. Every day that we wait, we make it worse.

The ugliest part of this punch line: The Medicare trust fund is empty almost at the same time, so hospitals are going to take about a 12- percent cut, the Medicare part A trust fund.

Yet, the political class, because they either are good at math or they are terrified to tell the voters the truth, on Social Security, you functionally get, for the average couple, the money you put in plus a tiny bit. It is a horrible rate of return.

If 25 years ago we had done what President Bush and others had talked about saying--just a little bit of your Social Security money going into side accounts--the retiring population today would be so much more prosperous.

Democrats and unions crushed that. It is on them. They should be the ones standing up and saying: We apologize. We are going to create a wave of poverty, but, hey, we are just going to tax the hell out of people who are still working. At least they could admit what they did.

The hardest part is also showing chart after chart after chart--it is Medicare that is actually the biggest contributor to U.S. sovereign debt. The average couple, the dollars they put in, they are going to get about $6 back. That is a pretty good rate of return. That is because we, as a body, have been terrified to fix the cost of delivering healthcare. We know there is waste and fraud.

Mr. Speaker, do you remember the couple of charts we started with? When the MedPAC report comes to us and says that it is like $1.5 trillion to $2 trillion of not fraud, because it is--well, partially it is fraud. What would that be worth if we just fixed the misalignment in Medicare Advantage, let alone all the durable medical equipment and all the things that are now happening with Medicaid, whether it be the scams we found in New York, where you hire family members to be the visitor. In New York City over the last 5 years, it is the number one job creator. For every 1,000 people 65 and up in New York City, they have--what was the number? It was like 141 signed up for this program. Even the Democrat Governor of New York says this is pretty much a scam.

Why is it so hard for us to step up and fix these things? The first time I gave a presentation on this a couple months ago, it was fascinating. All of a sudden there were articles popping up on the internet, I think written by AI, beating the crap out of me. It turns out they have their own lobbyists for the fraud. That is how perverse this society has become. The fraudsters now have lobbyists.

Mr. Speaker, I am fixated on debt, deficits, and demographics because I am going to argue that we have a country that about every 13\1/2\ seconds we are borrowing a million dollars. Yet today even, we have debates around here and we are arguing about saving a couple million dollars. That is great, but we borrowed more money during the debate than the debate actually would save if it became law. That is how screwed up we are.

Mr. Speaker, I beg of you and anyone out there that is listening, can we do something real?

I have a 3-year-old and a 10-year-old that we have adopted. The data says that we will need a 104 percent of little Matthew's lifetime earnings just to pay the pensions of this Federal Government. That means every dime he will make plus 4 percent.

We as a society have decided the next generation will be poorer than we are. Welcome to the morality of the modern Congress.

BREAK IN TRANSCRIPT

Source