Under the Speaker's announced policy of January 5, 2011, the Chair recognizes the gentleman from Arizona (Mr. Schweikert) for 30 minutes.
Mr. Speaker, this is something we try to do out of my office every few months, where we try to update a number of the budget numbers we're seeing coming from particularly the President and try to put them in some perspective. I thought this would be one of those opportunities--because we're about to work on the budget for the rest of this week--to stand here and help everyone understand some really scary things that are out there in the numbers and some things we've been talking about for the last year and the fact that they're getting worse.
Mr. Speaker, you also, being my friend from Arizona, you've actually heard me tell this story.
A year ago, we stood here and did this presentation. When I got back to the office, my phone was ringing. I reached down and picked it up, and it was a gentleman from my district who was nice enough but kept telling me over and over that he didn't believe me, that the numbers didn't feel right. After about a half an hour of discussing it with him, I probably was a little too harsh. I said: I don't know where the feelings key is on my calculator. I think at that point he hung up on me.
Look, the numbers are real. It doesn't feel warm and fuzzy, but it's real.
I'm actually going to break one of the congressional rules in communication where we're often supposed to talk at a 30,000-foot level. I'm going to drive down into some of the weeds here, but it's important. This is the future of our country. This is our destiny, unless we make some substantial changes.
The first slide up here--and all of these are going to be up on our Web site within the next week, the congressional Web site--is just trying to demonstrate how unrealistic many of these numbers coming from the White House are.
The year 2008 was the peak of revenues into the Federal Government. We'll give you an idea. The President is saying in 5 years that revenues are going to be up 50 percent from that peak in 2008. So we're going to have this dramatic rise in revenues over the next 5 years, and that's where their deficit projections are coming from.
Guess what? On the slides I'm going to show you, we still use the President's numbers. What I want you to understand is that they are based on, I think, substantial fantasy when you start to understand the White House's use of what they are predicting as revenues and GDP growth.
As we go through these--and I'm going to throw a lot of slides here. The next two slides are the easiest to understand and hopefully tell the greatest part of the story.
This is 2011. Sixty-three percent of all of our spending is Medicare, Medicaid, Social Security, interest on the debt, veterans benefits. We'll call those the mandatory spending. Many people call them the entitlements.
This year, 37 percent of our spending is what we'll call discretionary, military, and the line of alphabet agencies that we all think of. It's foreign aid, veterans, all discretionary over here. It's 37 percent of the spending. This is this year. Do you see, 63, 37? What happens a year from now?
In 2017, basically 5 budget years from now, you notice a little difference. We went from 63 percent to 75 percent which is now in Medicare, Medicaid, Social Security, interest on the debt, and veterans benefits. Five years from now, 75 percent of our budget is in mandatory entitlement spending, and the discretionary keeps getting smaller and smaller and smaller in real dollars.
I'm going to show you some slides in a little bit that are going to demonstrate that even the military goes down in real dollars. No more of this discussion of, well, you guys are just slowing down the growth. No, it actually goes down in real dollars. This is our future.
Understand, the mandatory and entitlement side is growing so fast that in about 10 or 11 years, if you held everything even, it would consume every dollar of the budget. There's no more military; there's no more discretionary. Everything is Medicare, Medicaid, Social Security, interest on the debt, and veterans benefits.
This is our future. We need to tell the truth.
Look, Washington, D.C., has had a bad habit of avoiding a lot of these hard decisions that are ahead of us, and it's almost like they forgot there were going to be baby boomers. We knew people were going to turn 65 for how many years? Sixty-five years.
We're now into year one of the baby boomers retiring at the end of the next 17 years. At the end of the 18-year cycle of baby boomers, about 36 percent, 37 percent of our population will be on Social Security. You have to understand that's about 76, 78 million of our friends and neighbors who will be over 65.
This should have been decades of planning for that retirement, for that baby boom, and Washington, D.C., did not do it. Now Members of this House--and I'm one of the freshmen here; I've been here 15 months--need to step up and tell the truth to the American people that this is our future. If we don't deal with it today, we're going to deal with devastating consequences a couple of years from now.
In the next couple of slides, I'm going to try to demonstrate the numbers and how they break down.
And I'm sorry. I know I'm throwing lots of slides, but one more time, this is important. This is our future.
This is 2011. Everything you see in the blue is the mandatory spending we were just talking about. So you get some sort of sense of what it is. Here's Social Security. Here's what we'll call the welfare programs. Medicare, Medicaid, interest on the debt.
We are one of the luckiest people to ever live, when you think about this year. We expect to spend only about $229 billion on interest on our debt. Well, understand, our debt now is what, $15.5 trillion. About $11 trillion plus of that is what we call publicly-held debt.
This is important to understand. A big chunk of our debt we borrow internally. We reach into Social Security, into the Medicare part A trust fund, and other places. But the $11 trillion-plus that we have to go out on open markets and sell, that's our great risk because we are beholden to what interest rate the market's willing to buy our debt for.
This year, with these incredibly low interest rates, I mean, what, a 10-year bond today is what, 2.25? We're only going to spend about $229 billion this year is our projection for that $11 trillion of publicly-held debt.
But what happens when we go to normal interest rates? And at the same time, just like this last year where we borrowed what, another $1.4 trillion, you've got to understand, here it becomes one of our Achilles' heels.
We go from, in 2011, that $229 billion in interest, to in 2017, we expect interest to be $565 billion. Understand, that's basically, in 2017, what defense is. Our interest on the debt will equal what defense is.
And as we walk through these numbers, please understand, it's Medicare, Medicaid, Social Security, interest on the debt, veterans benefits that are exploding because of the demographic issues. It's math. And this is our future.
And you'll notice, as we were showing in the previous chart, discretionary now is down to 25 percent of all spending; 75 percent is those mandatory--what we like to call entitlements. And this is our future.
As I was just trying to share, and this is important because I got this question at a town hall this last Saturday. Well, when you say that defense is going to be taking all sorts of cuts, you mean just cuts in the growth.
No, I mean in real dollars. We expect, the way the budgets are being laid out right now, the way the President's numbers are, by 2017, actual, real dollars, not adjusted for inflation, not the projection or a portion of growth, real dollars are going to be substantially less than they are today. Our projected 2012 budget about $709 billion. In 2017, $582 billion.
What are the Federal Government's constitutional obligations? Protection of the country? Defense? And you'll notice, in real dollars, it's going down. So what will even be the purchasing power of that money 5 years from now?
And you'll start to understand the reality of what's going on. And please understand, it's being driven, why? Because the mandatory spending, the entitlements are continuing to explode, so everything else in government will shrink and be crushed.
We thought we would try to find even a little more detail. These are brand new slides for us, and these will all be up on our Web site hopefully some time this week, and sort of helping put percentages on the numbers.
You saw the big graph of, hey, in 5 years, 75 percent of all of our spending is Medicare, Medicaid, Social Security, interest on the debt, veterans benefits. But we thought we'd show--here are the current percentages so you can see what's going on there.
This is 2011. Defense is 18.8. In 5 years defense will be 12.4 percent of the budget.
Department of Health and Human Services, which is substantially Medicare and Medicaid, this year is 24.7 percent of the spending. In 5 years, it's 26.8.
But where else is the explosion?
Department of Treasury, which is substantially debt, paying interest on our debt, will go from 14.9 percent of the total budget in 5 years to 20.5 percent.
What I'm trying to demonstrate here is we're being consumed by our own interest, having to finance our own debt. We're being consumed by the basic demographics of our Nation because Washington, D.C., did not tell us the truth, did not set aside the resources that were absolutely necessary to deal with the baby boomer population, and we're going to have 76 million of our brothers and sisters in this baby boom cycle over this 18 years. Remember, when it's done, it's 36, 37 percent of the population on Social Security.
I'm fearful, unless we step up and make the policy changes that are absolutely necessary--and thank heaven for Paul Ryan and many of the hardworking Budget members here in the House that are laying out the truth. They're laying out what is absolutely necessary to keep this Republic operating and to tell the truth about the budget and the numbers.
So one of the things we got this last weekend back home, I had a couple come up to me pointing their finger saying, well, if you would just do things like the Buffett Rule, if you would do things like that, you would solve the problems.
One of the things we love to do in our office is, how do you make big numbers understandable, because, let's face it, when I stand here and talk about $15.5 trillion in debt, or talk about this, talk about that, it often is overwhelming numberwise. So we came up with this idea of a clock, and we've done this for a number of different things.
Now, here's the good news and the bad news. We're borrowing a lot less money right now than we were borrowing a year ago. That's the good news. The bad news is we're still borrowing $3.5 billion every single day, and we project for the next 365 days $3.5 billion every single day.
But when you hear the President, when you hear many of my friends on the left say, well, if we just had something like the Buffett Rule, where these rich people have to pay all these extra taxes because they're escaping, what does it actually pay? What does it actually mean?
If you use the President's own model and don't pretend that there is going to be certain tax avoidance and smart lawyers finding ways around it, and that it doesn't slow down the economy and doesn't change people's behaviors and all the other things that happen when you raise a tax and live in math fantasy, so every dime comes into the Federal Government, what does it actually buy us?
Well, we did the math on it, and we figured out it would pay for 3 minutes and 30 seconds of that daily borrowing. So when you see Members walk up to these microphones and talk about things like well, if we just had the Buffett Rule, we would be fine, they're not telling you the truth.
Or it's back to that story before--they found a feelings button on their calculator, and it makes them feel better, but it's not real math.
The entire Buffett Rule would pay for 3 minutes and 30 seconds of borrowing a day, at the current rate of borrowing, which is $3.5 billion a day.
Mr. Speaker, I know this is a lot of math. I know these are a lot of numbers to throw out, but it's our future. When you see what's happened in Europe, when you realize people in Greece and so many other countries lived in a fantasy, and a lot of it was perpetuated by their own governments not telling them the truth--well, I'm telling you the truth, and I'm using the President's own numbers to get there. It's why the decisions that are going to be made here this week, as we start to set out our budget documents, it's why we desperately need the Senate to step up and tell the truth to the American people, that if you want to save this Republic, we've got to deal with the reality of our math, because our math is the single most dangerous thing to this Republic right now.
Mr. Speaker, I yield back the balance of time.
- May 10, 2011
- March 19, 2009
- July 22, 2011
- July 21, 2010
- February 4, 2009
- July 29, 2011
- March 18, 2009
- June 9, 2009
- January 20, 2011
- April 24, 2013