- 1 year ago
In House floor remarks, Rep. David Schweikert (R-AZ) sounded off on the issue of debt and deficits.
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00:00Thank you, Mr. Speaker and my friend from Texas, you always have some amazing stories.
00:08Mr. Speaker Pro Tem, tonight is going to be a little tricky because I'm going to try to weave sort of three major subjects together.
00:19And some of it's going to be really technical, some of it will be slightly sarcastic, but the math here is really important.
00:29And I'm going to do it backwards from how I originally thought because I want to hit a couple things that are remarkably important.
00:40Alright, so I've come behind this microphone heaven knows how many times and shown the charts,
00:46hey, we're borrowing $72,000 a second, that we could borrow as much as $2.3 trillion this year.
00:55And I'm going to show some other things in here, Moody's, why did they downgrade us, some of the things going on.
01:03And on occasion I get this, okay, what are your solutions?
01:08And then we always try to come in saying, okay, here's the technology where you can disrupt the cost of healthcare.
01:13Here's the technology where you can change the price of delivering government services.
01:18But we started almost a year ago in my capacity on ways and means, you know, chairing the oversight.
01:30I now chair the Joint Economic Committee, and thank you, Mr. Speaker, because he helped me actually have the capacity.
01:39I've hired a PhD in healthcare economics.
01:43We've dropped last week, and that's the term we put in, something called a hopper.
01:48That's actually where you file your piece of legislation.
01:51Two pieces of legislation that if you, the preliminary scores are almost $2 trillion in savings over 10 years.
02:00So as we're having this discussion of debt deficit, can you extend the tax policy?
02:07Can you do other things?
02:11It's not going to come from traditional austerity.
02:15The fact of the matter is that math doesn't work.
02:17You're going to do it through policy.
02:20You're going to fix policy.
02:23And people just stare at you like you're an idiot when you try to explain these things.
02:27So let's walk through our big one.
02:29And look, this is an occasion where I promise you there's so much money involved.
02:36There's a reason other members of Congress have been unwilling to do what we knew was a problem.
02:42A few weeks ago, I came here with the MedPAC reports.
02:47Now, I don't know if anyone ever bothers to read them, but you go through there, and it should light your hair on fire.
02:57For the last year, the Wall Street Journal has done a series of articles
03:03basically showing hundreds of billions of dollars of waste, fraud, misallocation, just misalignment incentives
03:12in something we call Medicare Advantage.
03:16So walk with me through.
03:18In the early 2000s, there was this concept of managed care,
03:24that if we could help our brothers and sisters with their earned benefit in Medicare,
03:29saying, look, we have fee-for-service, but you have to pay all these co-pays.
03:33But what would happen if you could align the incentives,
03:37saying we want insurers to manage a portfolio of access to health care,
03:46but within that, those insurers will actually make their money by helping you be healthier.
03:53The model, which started in 2005, many of you know it as Medicare Advantage.
03:58You see the ads, and that's actually part of the problem.
04:03It was supposed to come in at 95% of fee-for-service,
04:07because this was a system where you were going to get better quality care, get taken care of,
04:11and the insurers would make their profit by helping their population become healthier.
04:20Well, it turns out, if you actually read those MedPAC reports,
04:23these are the auditors who do the modeling,
04:26and we're talking something that's almost a trillion dollars in spending last year.
04:31So we're talking something that's stunning amounts of money.
04:35Last year, Medicare Advantage came in at 120% of fee-for-service.
04:41So just that delta, 120% to the 95% it was envisioned to be,
04:47that right there is $100 billion a year.
04:51And the fact of the matter is, if you've been following this series of articles,
04:56I think ProPublica, Wall Street Journalists spend tremendous resources doing it,
05:02it will curl your hair.
05:04And then you've been seeing the most recent stories about the potential criminal acts.
05:11I think last Thursday a story broke of actual criminal, not civil, criminal coming.
05:18So is it time for us as members of Congress to talk about something which is often dangerous,
05:25because when you're taking on a system that has trillions of dollars flowing through it,
05:31you've got to understand, there will be ads in my district that are going to beat the ever-living crap out of me.
05:37It's the job.
05:39You've got to tell the truth, know the math, and come with actual solutions.
05:43So we went back and said, hey, how do you design a system where you make sure the benefits,
05:52the promises are there for seniors because it's an earned benefit?
05:55How do you make sure you're doing nothing, nothing to cut that access to health care,
06:01cut that access to quality health care,
06:03but you align the incentives to go back to the original vision
06:07where it's about helping those seniors who are on Medicare Advantage become healthier
06:15and the morality of that.
06:18Now, we had to do a number of things in design, so we introduced legislation.
06:24This was the preliminary score from the Joint Economic Economists.
06:30$1.76 trillion of savings over the 10 years.
06:40Now, the fact of the matter, that's only about 10% of the cost of the program over those 10 years.
06:44So you start to understand the scale of the cost of this.
06:48We believe, now understand, this is only conversation between economists, and I was not on the call,
06:54that the preliminary score right now is $1.84 trillion coming from the people that will score the legislation.
07:06That would make it probably, everything we can guess,
07:10the single biggest reduction in spending in a single bill in probably U.S. history.
07:15Does that give you a sense?
07:18When you have people talking about waste and fraud and misalignment and bad acts,
07:24this is the ginormous granddaddy of it all.
07:28So how do you actually take a piece of legislation that's, it's not that big a bill.
07:35It's a little complex.
07:37It's really scary because, as you know around here, we're not ever supposed to talk about these things that,
07:44particularly Medicare, but this is not Medicare as you think about it.
07:49This is the insurers who are paid to actually manage your care and help you be healthier.
07:57And yet you have the series of stories saying on how they've been taking advantage of the system.
08:04And there's a way to make this work.
08:06Even the MedPAC report says, we support Medicare Advantage.
08:10We want it to stay, but we're going to have to fix these misalignments.
08:15And economists have been modeling the savings.
08:20So what happens if you have a moment here where these sorts of dollars in savings,
08:29and this is going to tie in, Mr. Speaker, to talking about what Moody's did last week,
08:34talking about how this and our talent-based immigration bill, those two bills together,
08:41probably scored $2 trillion of savings, and they would be good for the economy.
08:46They would be good for health care.
08:48They'd be good for people to be healthier.
08:50They would help grow the economy.
08:52This is an example of getting policy right to actually take on a small sliver,
09:02a small sliver of the debt, because remember, our baseline debt for the next 10 years,
09:06we're going to borrow another $22 trillion.
09:10So even though this number is massive, it's still just a fraction of what's coming at us.
09:18And look, I'm trying to make the point again, our legislation, which we call Better Medicare,
09:26it's been introduced, it's in the process of being scored,
09:33but when you start to see these sorts of dollars,
09:36and yes, it would change the current spending projection by about 10%, 10.7%,
09:41according to the joint economic economists.
09:44But you already had the MedPAC saying it's already 25% more expensive than what was the original model.
09:50So it gives you a sense that we're making reforms, but we're just trying to align the incentives.
09:56And we've done some things to actually help the insurers be able to have sort of automatic enrollment,
10:02but you can choose to opt out a longer period of time.
10:06So the investment for that senior who chooses that Medicare Advantage plan to be given the services to be healthier,
10:14but also with that healthier, the provider may benefit by having a healthier population.
10:21We've been trying to just think like economists, instead of so often what you hear behind these microphones.
10:29Because something I've teased about, I actually talked about this a couple weeks ago,
10:33there's in Nature Human Behavior, there was a academic article,
10:38and this is one of those geeky ones that's peer-reviewed, all those things.
10:42Computation analysis of U.S. congressional speeches reveals a shift from evidence to intuition.
10:50They basically took 240 years of House floor speeches, ran AI across them and said,
10:56hey, guess what's happened?
10:58These speeches around here no longer talk about facts, about data, about math.
11:04We now tell our feelings.
11:06The problem is if you have complex problems, your feelings aren't going to help us fix complex problems.
11:15It turns out math does.
11:17And this is what we've been trying to do on this reform of Medicare Advantage.
11:22We want the system to work.
11:26But we can't allow a trillion and three quarters over ten years of fraud and bad acts.
11:36And if you don't believe me, get in front of your computer right now
11:39and look up some of the articles of the potential indictments, the criminal activities that are coming.
11:44But even the Wall Street Journal series that actually talks about people being scored as sicker,
11:49and they don't have the diseases, they don't receive services, they're not on those medications,
11:55but yet you and I as taxpayers are paying for it and we're borrowing the money to do it.
12:04Please, if you're a staffer watching this,
12:09if you're an American that actually cares about us getting our act together and doing things better,
12:15if you're a member of Congress, look, I know doing big things around here is terrifying.
12:23We don't have a choice anymore.
12:25When you start to see, if anyone actually read the Moody's report that was put out last Thursday,
12:35they make a couple points that should scare the crap out of us.
12:40In nine budget years, they believe about 9% of the entire economy in that year will be borrowed by the federal government.
12:50That's 3.8 trillion will be the borrowing amount in 2035.
13:03And that's just sort of our baseline.
13:05And the reason we often don't tell the truth, we avoid it,
13:09is almost all this growth of this borrowing is interest and Medicare.
13:16It turns out it's really not Republican or Democrat, it's demographics.
13:22But we're so busy trying to get elected next time, we need something to blame them, they want to blame us.
13:28So if you stand up here and try to actually fix problems,
13:33you will get the crap kicked out of you, but you're at least trying to do the right thing.
13:36This is what you're hired to do on this job, is not pander to your voters, tell them the truth and try to fix things.
13:44I can't tell you how many speeches I hear behind these microphones, people tell you the problem over and over,
13:49but they'll never spend a year writing a bill, putting about a hundred hours into it with academics,
13:57with PhDs in healthcare, experts from the industry put together a bill and says,
14:02this will work, this will make things better.
14:06And look, here's something it should just, just a philosophical thought I want everyone to think about.
14:17United States just got downgraded by the third major credit rating agency.
14:22Did you know there's 18 states that have higher credit rating than the United States government right now?
14:2718 states have higher credit rating, yet every dime a member of Congress will vote on,
14:36every dime a discretionary, non-defense discretionary as we call it, is borrowed money.
14:41Every dime of defense is borrowed money.
14:44About $400 billion I believe last year, what we call mandatory spending, the formulaic, earned benefits,
14:50things of that nature, is borrowed money.
14:52Last year, for every dollar we took in in tax receipts, we spent $1.39.
14:58And much of that money we're sending to states.
15:04Remember, we're borrowing money, so my state of Arizona, and we do things, we do some things actually really well.
15:11Our Medicaid system we call Access is actually remarkably well run.
15:18Except for some of the fraud, but I'm going to touch on that, that we haven't built the models to catch faster
15:24because we're not actually incentivized.
15:26Now we also play incredible games where we use a provider tax.
15:30We actually make money for the general fund, more than is actually spent on health care,
15:35which is one of the great scams we're trying to fix right now,
15:38is what happens when the washing machine is actually where you're padding state budgets
15:42instead of taking care of health care, but that will get protested with.
15:46So think of this, 18 states that we borrow money have higher credit ratings than we do.
15:56It's just an interesting thought experiment.
15:59How about if I told you that, I think it is as of yesterday,
16:07it's either 12 or 13 countries can sell a 10-year bond cheaper than the United States.
16:15Greece, Greece today can sell a 10-year bond cheaper than the United States.
16:21If any of you are paying attention, remember there's this concept of interest fragility.
16:27One of our greatest threats to this country is our ability to finance this debt.
16:34Today both the 20-year and 30-year bond, both of you went over or touched 5%.
16:43We showed actually a couple months ago that a single point of interest on U.S. debt
16:50over 10 years came in like $3.3 trillion of additional interest.
16:56So it's bigger, just a small movement of interest rate is bigger than everything we're debating here.
17:02But we're not going to tell you that.
17:04A, because it would require math.
17:06B, it would require facts.
17:08And C, it might actually mean someone has to do something.
17:13So there is an economist at Bloomberg, Anna Wong, truly freaky smart.
17:23I've had the opportunity and the honor.
17:26She came and spent part of a day with my joint economic economist.
17:31She's been at the Federal Reserve. She's been at the White House.
17:35One of those people is just intimidating on how she's able to calculate the world.
17:40And she actually was looking at our reconciliation budget.
17:44And she says if we will do just a couple policy things, it's neutral in cost.
17:50It balances out.
17:52That's the point I'm standing here for.
17:56We cannot allow the taxes to go up on working people in this country.
18:03Well, right there, that's $3 trillion, $3.1 trillion.
18:06How are we going to offset it?
18:08Well, it turns out if you take a look at, and this is just from Anna Wong's analysis.
18:13And if you're really geeky, you can get this on your Bloomberg terminal.
18:18So all six people in Washington, they have a Bloomberg terminal.
18:22They're really expensive, but I actually need it for what we do.
18:26If you actually, if the tariffs, what they're producing, some of the doge offsets,
18:33it turns out if we will incorporate some of this policy, we can make this budget neutral.
18:39And that's actually part of my request often for the leadership, for the committee chairs,
18:44for those of us in Ways and Means.
18:46We need to start actually pulling out our calculators and thinking this through.
18:50How do we do these things so we can stabilize the economy, maximize economic growth,
18:55but not be adding to the debt?
18:57There is math that doesn't.
19:00Will anyone actually read the documents?
19:04And we actually start to walk through this.
19:08So we're actually trying to build models right now on trying to see what's coming into custom duties.
19:14That's the tariffs.
19:16What is that offsetting?
19:18And you'll see me over the coming weeks come with charts and start saying,
19:21okay, here's what we have to plug into our models.
19:25But for everyone who's been whining around here, here's your math problem.
19:32And I would wish they would start the whining with telling the truth on math and facts
19:37before telling antidotes and stories.
19:39Because, remember, I just pointed out to you the 140 years analyst of the speeches here in Congress,
19:46how they've become now about feelings instead of facts,
19:49because we can manipulate you with telling anecdotal stories.
19:55This simple chart here, see the nice coins?
19:58We stole this from someone else.
20:00Baseline is we're going to spend $86 trillion over the next 10 years.
20:04All we're talking about trying to save is $2 trillion out of that 86.
20:10You're telling me we can't get $2 trillion out of 86 over 10 years?
20:20This is causing the emotional meltdown here because this place only cares about one thing.
20:24It's the money.
20:25Spend it, spend it, spend it, and basically screw over people's retirement and my kids.
20:30I have a two-and-a-half-year-old and a nine-year-old.
20:32When my two-year-old, yes, I know, my wife and I adopted some kids.
20:37It's the greatest thing we ever did.
20:40But when my two-and-a-half-year-old is basically 23, 24,
20:44every single tax in America has to be doubled to maintain baseline spending.
20:55And I've done presentation after presentation where I've come here with the actual charts
20:59using Democrat economists showing that every tax hike the Democrats have proposed on the wealthy,
21:06everyone, capital gains, income, the entire plethora, produces about one-and-a-half percent of GDP.
21:14All the austerity, the cuts on our side, accounts for one percent of GDP.
21:20So you've got a big two-and-a-half percent.
21:23Mr. Speaker, we're going to borrow about 7.3 percent of the economy this year.
21:29And I showed you a chart a little while ago that Moody's has us in nine budget years borrowing nine percent of the economy.
21:37Anyone see a math problem?
21:39The rhetoric here, the moving of the mouth, doesn't match what's on the calculator.
21:45We make crap up.
21:48This is the baseline fact.
21:50Baseline, we're set to borrow, or excuse me, spend 86 trillion over the next 10 years,
21:55and all we're trying to do is reduce 2 trillion.
21:59Now, I think we should reduce dramatically more.
22:03But I think you can do it through policy, the adoption of technology, the alignment of incentives,
22:13and actually make the delivery of government services work.
22:17When only 31 percent of the phone calls at the IRS get answered, are we doing our job?
22:24You do realize there's technology that would fix that,
22:26but that would actually turn and anger the union of the government employees there.
22:33So there's these barriers here where you have armies of lobbyists walking up and down these hallways,
22:39and the inefficiency, that waste and fraud, is their profit model.
22:45Understand 80 percent of the spending growth.
22:50We're not supposed to tell people this, but it's the math.
22:53And you can't do policy unless you're willing to tell the truth of the math.
22:5680 percent of the spending growth over the next decade.
22:59Social Security, Medicare, interest.
23:02And the interest is now scaring the crap out of us.
23:05Because there's this concept called term premium.
23:10As the Ray Dilios and these people who are the billionaire experts start saying,
23:14Hey, China's in the market, Germany's in the market, United States is binging on debt.
23:21There's almost not enough savings in the world to finance the scale of borrowing.
23:29And much of that borrowing is driven because of demographics.
23:31The entire industrialized world got old.
23:33We have a shortage of young people.
23:36I think the math is in nine budget years, 23 percent of America is 65 and up.
23:41So are we doing the things to maximize automation and growth so we can have productivity,
23:46so we can continue to afford and provide the very services we promised?
23:51No, that would require math and thinking and policy.
23:56It's not good storytelling, is it, Mr. Speaker?
24:00Look, it's also one of the reasons I was so enraged on the intellectual lazy I thought that the Senate
24:13and look, this is where I'm being a bit sarcastic, if not mean.
24:20At least the House, and it's not perfect, there's a number of things I'm unhappy with,
24:27and leadership still doesn't have my vote on it until I get some agreements that we're able to move policy
24:37to start changing some of these numbers.
24:39But I've shown up with the policy.
24:41I'm not just moving my mouth.
24:42We put it on paper.
24:43We introduced them as bills.
24:46But you look at the charts of what the Senate's unwillingness to actually put policy into their budget reconciliation.
25:01And the reason we have to demonstrate a level of fiscal discipline,
25:09if you care about poor people, if you care about economic growth, if you care about my kids,
25:14if you care about your retirement, if you care about what this government provides to society,
25:19at some point we've got to figure out how to pay for it.
25:22But what happens when interest?
25:26CBO says when we finish this fiscal year, U.S. debt will be at $37,200,000,000,000.
25:36We have to take to market this year in just refinancing,
25:40and I'm not counting the short roll on the short end of the curve if you want to geek out.
25:45I think we're going to bring $9 trillion to market.
25:48We're probably going to bring another $2 trillion, $2.3 trillion of new issuances
25:53and start to see where the United States is interest rate-wise.
25:56We start seeing Greece and other countries having substantially lower interest rates than us.
26:00That should set off an alarm.
26:04Do you want the money to go to the world's bond markets?
26:10You do realize convincing the world debt markets that we're creditworthy,
26:15that we're being disciplined, that we're doing things,
26:18just that differential is more money than everything that's being debated here.
26:25How many people thought, you know, when just one point of interest,
26:28one point differential here is over $3 trillion,
26:32that would solve a lot of this debate, wouldn't it?
26:36We can actually get those types of bond rates if we demonstrate to the world
26:41we're creditworthy, we're being disciplined, we're being sensible, we see our long term,
26:45and we're actually understanding the honesty of our demographics.
26:49But instead, a bunch of the brain trust here in Washington spends their time attacking Moody's
26:58for downgrading us and telling the truth.
27:01The problem is, if you actually read their document, it's the truth.
27:13And for everyone out there, it thinks balancing the budget and doing those things is simple.
27:20If you actually listen to folks from the last administration, this administration,
27:25the fantasy goal is just to get the 3% of debt to GDP, not 7%,
27:30not, heaven forbid, in nine budget years being at 9%.
27:34But if you've got 3%, you're more sustainable.
27:37But you've got to stop the fantasy of saying,
27:39well, we're going to cut it all with a non-defense discretionary.
27:42Non-defense discretionary is 12% of our spending.
27:48Almost everything you think of as government, you know, the Park Service, the FBI,
27:52the White House, our salary is here.
27:54That's in this 12%.
27:58Interest on the debt is every bit as big as all the non-defense discretionary.
28:04And actually, real interest on the debt, if you add up everything, is about $1.2 trillion this year.
28:08Because remember, when we borrow money from the trust funds,
28:11we've got to pay it interest and pay it back.
28:15And then, for those who are willing to run around here
28:19and interested in having discussions on Medicaid.
28:25Remember, Medicaid is the program that was designed for indigent populations,
28:31for women, children, infants.
28:35But yet, you hear almost protests from the people of the United States
28:41But yet, you hear almost protests from the left.
28:45So here's a $2.5 billion fraud in Medicaid in Arizona,
28:53where they exploited tribal members, abused them, recruited them off our tribal communities,
28:59put them in sober living homes, bled the system for money.
29:02It took years because in a system that has the incentive,
29:08where you're doing provider taxes and more of that money,
29:13the raising the cost, and it ends up in the general fund of your state.
29:22We should be ashamed that these types of scams were allowed to bleed money
29:28that should have been going to people that needed the help.
29:33Look, if we don't get an alignment of policy, the cost,
29:50and how these things can actually work, Mr. Speaker,
29:54I think we're going to continue to live in this world where our debates mean nothing here.
30:00They're just based on feelings.
30:06Exploitation of our voters.
30:08Tell them things that are actually mathematically not true.
30:12But it's great politics, and right now,
30:16this place seems to give so much more about winning the next election
30:21than the survival of this republic and its economy,
30:24and its people and its prosperity.
30:26Is prosperity moral?
30:30There's a path where we can meet our obligations,
30:33help our brothers and sisters that need the help,
30:36and not scare the hell out of the very people that we turn to every single day
30:41because this government borrows $9 billion a day.
30:45$72,000 a second.
30:48Next year, it's going to be close to $82,000 a second.
30:51In nine years, it's approaching $100,000 a second.
31:00And so often, the discussion behind these microphones
31:05are things that set off your anger,
31:09and they're mathematical fantasies.
31:13If I get one more person that says,
31:15I saw on cable news this.
31:17Why don't you fix it?
31:18And say, happy to fix it.
31:20But you do realize, you know,
31:24the Corporation for Public Broadcasting.
31:27Okay, fine.
31:28If that's...
31:29I think that calculated to paying for two hours,
31:3315 minutes of borrowing an entire year.
31:36The lack of understanding of the scale of this math.
31:41So, Mr. Speaker, there's hope.
31:43There's a way you can make this work.
31:49But not until the calculator's pulled out
31:55and the morality that prosperity is the goal
32:02and it's the moral thing to do.
32:04And with that, Mr. Speaker,
32:07I apologize to anyone.
32:10I hurt your feelings.
32:11Send me a note.
32:12I'll write you an apology note.
32:14I seem to write a lot of apology notes.
32:17Look, I continue to be mad at both parties
32:24and almost everyone around here
32:26because we're not willing to do the math.
32:28But there's a way you can make this work.
32:30And with that, I yield back, Mr. Speaker.
32:32The gentleman yields.
32:34Under the Speaker's announced policy of January 3rd, 2025,
32:38the gentleman from Washington, Ms. Schrier,
32:41is recognized for 60 minutes as the designated...
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