On Tuesday, Rep. David Schweikert (R-AZ) delivered remarks on the House floor about the proposed reconciliation package.
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00:00If you return here illegally, you will be punished.
00:05Thank you, Mr. Speaker. I yield back.
00:13Under the policy the Speaker announced on January 3, 2025,
00:18the Chair recognizes the gentleman from Arizona, Mr. Schweikert, for 30 minutes.
00:23Thank you, Mr. Speaker Pro Tem.
00:31I could almost hear the joy of, hey, it's only 30 minutes this time, not an hour.
00:37Mr. Speaker Pro Tem, I want to do just a handful of things.
00:42One of these days, we're going to have not enough noise about the facts, the numbers, the data, the debt,
00:50those things, that we can come in and sort of do our boards, our charts on things that actually reduce spending and modernize.
01:00But I do want to sort of start with this.
01:03We have spent, since last summer, working on pieces of legislation when the Wall Street Journal series,
01:11ProPublica series, came out about the scale of bad acts that were happening in what we call Medicare Part C,
01:17which is Medicare Advantage for most of us, which is now, I think, about 55% of the Medicare population.
01:25We've been working on that to sort of modernize it.
01:29And so for all the lobbyists who are making money, trying to beat us up for trying to actually fix it,
01:38I'll warn you, the legislation's almost done.
01:40We now have to work with the economists and the other things to score.
01:43We've been stunned that, though, it continues.
01:48Even last Thursday, I think there was a whole other set of investigations or indictments announced.
01:54All right, let's get on to some of the math here.
01:57Mr. Speaker, I've come behind the microphone many times and talked about the scale of debt.
02:03We borrow about $72,000 per second.
02:06Some of our math next year, that goes up to about $82,000 borrowing per second.
02:11But if you're a country that needs to borrow about $6 billion a day,
02:18so we borrow about $6 billion a day,
02:22what happens in a world where you actually, the liquidity of the debt markets?
02:29So I grabbed an article that was in one of my, I think it was in one of my bond publications,
02:34because I have some weird reading habits.
02:37Japan prepares to use its role as America's largest creditor as leverage in Trump's trade talks.
02:46The point I want to make by reading that headline to everyone
02:49is Japan now is our largest individual creditor country.
02:55So when you have a country that has $900 billion, maybe a trillion dollars of U.S. sovereign debt,
03:06and you walk in the door and say,
03:08we want to renegotiate some of our trade pact with you,
03:11or we want to build an actual trade pact with you,
03:13and they look at you and say,
03:15but we right now take those dollars that you send us because you've been buying our stuff,
03:19and we're buying your debt.
03:24The fact of the matter is,
03:27if you're a country that's borrowing $6 billion a day,
03:30does anyone understand the fragility?
03:33And I'm going to use that fancy word a couple times,
03:35because also, interest.
03:38We're actually seeing some indications that when we get out of extraordinary measures,
03:44for everyone who doesn't understand,
03:45we hit the debt ceiling a couple months ago.
03:50So right now,
03:50the Treasury,
03:51every day for that $6 billion shortfall,
03:54is juggling money internally,
03:56and borrowing it out of the military retirement accounts,
04:00or our thrift savings account,
04:04the cash accounts,
04:06and those things.
04:06So we're doing internal borrowing.
04:08But all that has to be paid back,
04:11and it all has to be paid back with interest.
04:13So we're still working on the rough calculation.
04:17Treasury put out a number,
04:19but I don't like their number,
04:21because I don't think it was real.
04:23And we had all the visibility.
04:25But we'd worked on the data set,
04:27saying when we finally raise the debt ceiling,
04:29let's say it's a month or two from now,
04:32Treasury is going to need to pay back those dollars plus the interest.
04:37So they're going to come to market with $400,000,000,000,000,000,000 of borrowing.
04:42So just be prepared for what's really going on in the interest rate markets,
04:48the debt markets,
04:49and will we be beyond some of the discussions of trade,
04:53where countries like Japan aren't leaking stories
04:58that they're going to use our debt as leverage against us.
05:02So, look, I used this board a couple times now,
05:07but I want it to make sense.
05:11Estimate for net interest as a share of revenues in 2035,
05:18so that's nine budget years from now.
05:21Moody, the chart here, the bar here,
05:24I want people to pay attention to.
05:26Moody's, who has this whole thing
05:28where they do analytics on debt and spending.
05:32Mr. Speaker, their estimate is in nine years,
05:3730% of U.S. tax collections,
05:39that's everything,
05:40corporate, individual, estate, the tariffs, everything.
05:44They estimate in nine years,
05:4630% of all those tax receipts
05:49that come into the federal government
05:50will just pay interest.
05:52And this is based on sort of today's interest rate projections.
05:59I showed some charts a couple weeks ago
06:01that showed an estimate
06:04that if U.S. debt went up 1% in interest,
06:08so us selling our bonds,
06:10interest rates went up 1% on us,
06:12in that nine budget years,
06:15it's not 30% of tax receipts
06:18that go to just interest,
06:20it's 45%.
06:22Are you prepared
06:26to have a world out there
06:29where here's a dollar of taxes I'm paying,
06:3130 cents of that just pays interest,
06:34or God forbid interest rates go up,
06:3645 cents of that dollar
06:38just pays interest on the bonds.
06:43There's also a chart,
06:44if we actually went back to the mid-early 2000s
06:47when we were kissing up against 6%,
06:49and it was just like devastating,
06:51the amount of tax collections
06:54that get consumed by interest.
06:57Remember, when we finish this fiscal year,
07:00CBO's estimate is U.S. sovereign debt,
07:03all of it,
07:04the gross debt,
07:05will be at $37.2 trillion.
07:10And the thing we're not supposed to tell people
07:16because it hurts their feelings,
07:18gets them upset,
07:19but it's called math,
07:20is over the next 10 years,
07:23the vast majority of debt
07:25is interest
07:27and healthcare costs,
07:29mostly Medicare.
07:31So unless you're willing
07:32to have honest conversations
07:34that debt, deficits,
07:36and demographics,
07:38the demographics
07:39is the driver
07:40of U.S. sovereign debt.
07:44We have a shortage
07:45of young people in America.
07:47We have foreigners
07:49come and get educated here
07:50and we send them home
07:51because we're so brilliant.
07:52And healthcare costs,
07:57we do all this game playing around here
08:00where our healthcare discussions
08:02are about healthcare finance,
08:04not about changing the cost of healthcare.
08:08Think about this.
08:08The ACA,
08:09many of you know it as Obamacare.
08:11It's a financing bill.
08:14It is a financing bill.
08:16It's who gets subsidized,
08:17who has to pay.
08:18The Republican alternative
08:19was a financing bill.
08:21Medicare for all is a financing bill.
08:24We don't have the discussion
08:25of how to revolutionize
08:27either through technology,
08:29a healthier society,
08:30taking on obesity,
08:31the things that drive
08:33the cost of healthcare.
08:34How about this concept of
08:35we build a healthier society,
08:38we use technology,
08:39I'm wearing one of these aura rings,
08:42we're doing experiments
08:42in our office
08:43with other wearables,
08:44trying to build data.
08:46Is that Republican or Democrat?
08:49It's just data.
08:50And I don't know why
08:52we haven't been able
08:52to build a love connection here
08:54or policy connection
08:55or whatever the hell
08:56we're supposed to call it
08:56between the left and the right
08:58saying what would happen
09:00if we could engage in policies
09:01that change the price of healthcare.
09:04Instead, we do these debates
09:05because everything in Washington
09:07is about the money.
09:09The people marching up
09:10and down our hallways here,
09:12they're not coming in our office
09:14to say,
09:14David, adopt technology,
09:16lower the price of living,
09:18lower the price of healthcare.
09:20It's we want more money
09:21or we want you to build
09:23a barrier to entry
09:23to our competition.
09:26We call it rent-seeking
09:27if you remember
09:28your high school economics class.
09:31So let's take a look here.
09:33I need you to understand
09:35how rough our position is
09:38in the world right now.
09:40Global 10-year borrowing rates.
09:42And I've brought the charts before.
09:45We've been bouncing
09:46between like the 13th,
09:48I think we fell to the 12th,
09:50and the 14th,
09:52where other countries
09:53are able to sell their bonds cheaper.
09:55But the one that just enrages me,
09:57here's Greece.
09:58Greece can sell a 10-year bond
10:00cheaper than the United States today.
10:04So when you run around
10:05thinking the United States,
10:06we are the gold standard,
10:08well, we're also screwing up
10:09our extraordinary privilege
10:11of having the world reserve currency
10:12and the dollars coming back to us
10:14because you start to see
10:15the slowdown in buying
10:16U.S. sovereign debt.
10:17And we don't know the real numbers,
10:19Mr. Speaker,
10:20because we're in extraordinary measures.
10:22We're not coming to market
10:23with new debt.
10:24But think about this.
10:25Here's the countries
10:26that can sell a 10-year bond
10:28cheaper than the United States.
10:29Italy, Greece, France,
10:31Canada, Germany, China, Japan,
10:33all can sell a 10-year bond
10:34cheaper than the United States.
10:36Lower interest rate.
10:39Does that make anyone concerned?
10:42I think I have a chart
10:44that shows the United States
10:46will consume 30-40%
10:48of all the world capital
10:50that's going to sovereign debt
10:51in the next decade.
10:54But we're not supposed
10:55to talk about that.
10:58And then the absurdity from the left,
10:59well, we tax rich people more.
11:01Okay.
11:03In the best,
11:04you might get a point,
11:050.5% of GDP.
11:07For all the things
11:07we talk about cutting,
11:08you get about one point.
11:10So the two and a half,
11:11Mr. Speaker,
11:12this year we're on pace
11:15to borrow 7.3%
11:17of the entire economy
11:18just this year.
11:20One of our charts,
11:23and I think this one
11:23comes straight from CBO,
11:25says with that little change
11:27in interest rates,
11:282035,
11:29we may be well over 9%
11:31of the entire economy
11:33that year borrowed money.
11:34And it doesn't have
11:37to be this way.
11:38You know,
11:39we're doing this
11:40reconciliation negotiations,
11:41all those things.
11:43And the inability
11:46of groups that come
11:47in the office
11:48and demand more money
11:49to come in with an idea
11:51saying, hey,
11:53you know,
11:53maybe we shouldn't be spending
11:55billions and billions
11:56and billions and billions
11:57of dollars on duplicative
11:58MRI scans
12:00or the things
12:02we just waste money on.
12:06Because it turns out
12:07that waste,
12:09you know,
12:10some people come by,
12:11these microphones,
12:11call it fraud.
12:12That waste
12:13turns out to be
12:15many of the bureaucracies,
12:16many of the business models.
12:18That's their profit model.
12:21And it doesn't have
12:22to be this way.
12:23So you start
12:24to take a look
12:25at the actual data.
12:28Last year,
12:29if you do the gross interest,
12:30that's what we sold publicly
12:32and had to pay interest out.
12:34Internally,
12:35when we borrow money
12:36from the Social Security
12:37Trust Fund
12:37or these other things,
12:39which all that money
12:39has already been borrowed,
12:41we have to pay interest back.
12:42So when they,
12:43Social Security
12:44redeems its bonds,
12:45we pay them back
12:46the money they need
12:47for that next month
12:47checks to come out.
12:49Because remember,
12:50Social Security
12:50is running about
12:51less than a structural
12:5325% shortfall
12:54from tax collections
12:55to checks out the door.
12:57We also pay them interest.
12:58So last year,
12:59we spent $1,133,000,000,000
13:02in interest.
13:05Our best estimate
13:06right now
13:07is this year,
13:09your government
13:09will spend about
13:10eh,
13:11one point,
13:12just a little shy,
13:13probably about
13:14$1.3 trillion
13:16in interest.
13:18Why that's important?
13:19You do realize
13:20that's more than defense?
13:22Let's take a look at this.
13:24Think about that.
13:25Starting in about
13:262022,
13:29our interest
13:30became more than
13:33the DOD budget,
13:34Department of Defense budget.
13:37How many of the public
13:38understand that?
13:39That interest,
13:40if you actually do
13:41the gross interest,
13:42is now the second biggest
13:44spend in the United States.
13:46Social Security comes in
13:48about $1,480,000,000,000.
13:51Interest this year
13:53will probably come in
13:54at, what,
13:54that,
13:55$123,000,000,000.
13:57So interest now
13:58is number two.
13:59Defense actually
14:00is coming in
14:00around number four now.
14:03So Social Security,
14:04Interest,
14:04Medicare,
14:05Defense.
14:09How many times
14:10do you hear people
14:11come behind these microphones
14:12and actually at least know their basic math?
14:15Or want to tell the truth to the voters?
14:18And once again, is this Republican or Democrat?
14:21It's just math.
14:22It's an obligation we have to pay.
14:27And we're going to do what about it?
14:31We are going to squeeze out our ability
14:34to do the things that we believe are important
14:37for protecting the Constitution and the society.
14:39Why? Because God forbid, the bond markets forbid,
14:44that we all of a sudden start to have a spike in interest rates.
14:53And you start to understand
14:55that many of our brothers and sisters
14:58who come behind these microphones,
15:00I show their chart all the time,
15:03saying, okay, here's the pie chart of all of our spending.
15:07Today, it's about 75% is on autopilot.
15:11You and I get to vote on 25% of the spending.
15:15Okay, about half that's defense,
15:17about half that's non-discretionary.
15:19Every dime a member of Congress votes on today is borrowed.
15:25Think about that.
15:26Other than when you're in reconciliation,
15:28where you actually get to have a vote
15:30or try to work on mandatory spending,
15:33which is formulaic,
15:37all defense and all non-defense discretionary is borrowed.
15:43And, yes, you've heard a number of members
15:46come behind the mic and talk about
15:48how much non-defense discretionary has gone up.
15:52And it has.
15:53And we've lied repeatedly,
15:57you know, when we did sequestration,
15:59PAYGO, how many times,
16:01you know, PAYGO, remember,
16:02I think actually was a Democrat proposal
16:04from years ago
16:05that if we're going to add new spending
16:07beyond the five-year window,
16:08there needs to be an offset.
16:10So you saw a number of bills that,
16:13oh, they expire just before the fifth year,
16:16so that way they don't set off the PAYGO,
16:18or like we did back in January,
16:20we owed like $1.2 trillion in cuts
16:23to meet the PAYGO,
16:24pay-as-you-go rules,
16:26but we just waive it,
16:27just like we've done with sequestration
16:29and all these other things.
16:30So we tell people,
16:32hey, we're going to be fiscally disciplined.
16:35As soon as it's uncomfortable,
16:36then we'll just waive it.
16:38But why this is important
16:40is just, okay,
16:43we will say there's a 45% increase
16:46in discretionary spending since 2019.
16:48And it is.
16:50But when you actually look at it,
16:53it's a lot of money.
16:56But did I mention we're borrowing
16:58$6 billion a day?
16:59So we went from $662 billion,
17:02this is non-defense discretionary,
17:04this is the Park Service,
17:05this is the IRS,
17:06this is the State Department,
17:07all the things you think of as government,
17:09it went up to $960 billion.
17:12But why this is important to understand,
17:15I would vote to roll that back
17:18to the 2019 budget.
17:20Okay.
17:21But if you see it as a percentage of GDP,
17:25the size of the economy,
17:27we're spending,
17:28which is the proper way to do
17:30big boy math on budgets.
17:32In 2019,
17:35non-defense discretionary was 3.1% of the economy.
17:40Last year,
17:41it was 3.3% of the economy.
17:44So it went up,
17:46but the economy got bigger.
17:47And it turns out,
17:52if you're borrowing 7.3% of the economy this year,
17:57you could get rid of all of what you think of
18:02as government,
18:03non-defense discretionary,
18:05and you could get rid of all of defense.
18:09And my math on my top of my head,
18:10I probably should have calculated this
18:12before coming behind the microphone,
18:14you still need about another $400 billion
18:16to cover borrowing that covers Medicare.
18:22So think about that.
18:23For those that say,
18:24David, balance the budget today.
18:26I can do it.
18:28Of course,
18:28you're not going to have a military,
18:29you're not going to have
18:30what you think of as government,
18:31and I need to find $400 billion
18:33in the mandatory space.
18:35There's this lack of understanding
18:36of the scale.
18:43And getting old.
18:46When it's healthcare and interest
18:48that's the primary driver,
18:50no one wants to hear that.
18:52That doesn't set off the dopamine receptors.
18:55It doesn't make people mad.
18:56It doesn't get you on television.
18:59You know,
18:59if you tell the truth
19:00about the drivers of U.S. sovereign debt,
19:03you will never end up on MSNBC
19:05or FOX or those,
19:07because no one wants to hear the actual math.
19:09We want things that anger people.
19:12It turns out good accounting
19:13isn't really that exciting,
19:17but it's math.
19:19And so here is the punchline
19:22which worries me
19:23and why I beg of my brothers and sisters.
19:26Okay,
19:27for those of us in the House,
19:29we have a reconciliation budget.
19:30We're trying not to let
19:32the expiring provisions
19:33raise people's taxes.
19:35We have a reconciliation budget
19:37in the House
19:38that if we do everything right,
19:39we get a couple trillion dollars
19:40of savings over 10 years.
19:42We're going to spend
19:44over $68 trillion
19:46in the next 10 years.
19:49How many members of Congress
19:51have had protesters
19:52outside their office?
19:52You can't cut things.
19:54We're talking total
19:56of $2 billion
19:57or $2 trillion
19:58of savings
19:59over 10 years
20:00when we're spending
20:00$68 billion.
20:02Have we lost our minds?
20:09And yet,
20:11if we were to do
20:14the Senate's
20:16reconciliation budget,
20:18which has almost no cuts
20:19in spending in it,
20:20we will borrow
20:23approximately.
20:25And look,
20:26I'm conflating
20:26publicly sold debt
20:28with the debt
20:29we would create
20:30in the next 10 years.
20:33What took us 240 years
20:36to build,
20:39we will double in 10
20:40or come close
20:41to doubling in 10.
20:44Does this body
20:47to the lobbyists
20:49in the hallways,
20:49to the groups
20:50in the hallways
20:50demanding more spending,
20:52to any of the staffers
20:53who might not have a life
20:54so they're watching this?
20:56Do you really think
20:57the bond markets
20:58aren't going to go,
21:01hey,
21:02they're doubling U.S. debt.
21:04Maybe we should ask
21:05for a little premium,
21:06that's called a term premium,
21:08on U.S. sovereign debt.
21:09But I just showed you
21:11and told you
21:11what happens
21:12if we go up 1%.
21:13Just at one point
21:17it's $3 trillion
21:17of additional interest.
21:20It's more than everything
21:23we're talking about
21:23trying to cut.
21:24So here's your balance.
21:26How do you communicate
21:27to the people
21:28we borrow money from
21:29that we're good credit risk,
21:32we're going to pay you back,
21:34we're going to pay you back
21:34appropriately,
21:35we're not going to say
21:37crazy things of,
21:38maybe we should force you
21:40to go longer on the bonds,
21:41or maybe we should ask you
21:43to do this or that.
21:45You can't do that.
21:48You don't screw
21:49with your bankers.
21:52And just in the article,
21:54we're already up against
21:55the leverage of,
21:56you know,
21:56this one's about Japan,
21:58but I don't know why
21:58it's not about other countries,
22:00using the fact
22:01that we've used them,
22:02we've needed them
22:03to finance our debt.
22:04And then we intend
22:07to leverage them.
22:09Okay.
22:10They need trade with us.
22:11Let's use that leverage.
22:13But let's also be respectful
22:14of the fact
22:15they're one of our bankers.
22:18And understand the fact,
22:19Mr. Speaker,
22:20if we don't get our act together,
22:24United States is on track
22:26to double its borrowing
22:30over the next 10 years.
22:31And if that becomes
22:34the perception
22:35in the world debt markets,
22:37we're going to pay
22:39a penalty for it.
22:40And that penalty
22:40is really expensive.