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Public Statements

Dispelling the Political Folklore

Floor Speech

By:
Date:
Location: Washington, DC

Mr. SCHWEIKERT. Mr. Speaker, I actually didn't intend to do this this evening, but I got so frustrated with a number of the things I've been watching, both on television and from our brothers and sisters in this body, it became time to actually bring some of the slides we actually do in our town halls back in Arizona. I like to refer to it as a combination of truth on the
numbers and also dispelling some of the political folklore that is rampant, both in this town.

I'm going to say a number of things this evening that I promise you will offend all sorts of Members, all sorts of this Washington, D.C. But, look, I'm a freshman. I've been here 140-some days, and Washington, D.C., has systemically not told the truth to the American people. I don't know if they're fearful of looking the American people in the eyes and saying, Look, here's what we've done to your future, your kids' future, your grandkids' future is so scary that they don't get reelected.

Well, I got elected to come here and do the numbers, and so my goal is very, very simple. The numbers are straight up. The numbers come from 2010 on a lot of the charts, so we know exactly what was actually spent. On a number of charts outside that, we're also going to use the President's numbers.

But let's run through this. We were just watching Judge Carter a couple of minutes ago walk through some of the economic impacts of what happens with drilling. I'm going to even touch, through this, on the folklore of, well, let's go tax Big Oil and what it actually produces.

First of all, the slide right next to me, this one we put together just to make it simple and visual. Imagine a country that borrows 42 pennies, 42 pennies out of every dollar we spend. We all know that's not sustainable. We can't do this. You couldn't do it in your family budget. Think of it. Over the last couple of years, it's been tough out there. Your family, my family, we all cinched our belts. The American families got tough and did what was necessary.

What did the Congress do? What did this government do? What did Washington, D.C., do? They just kept spending. But the way they spent is they found people who were willing to buy U.S. sovereign debt, and they kept borrowing. And today we now borrow 42 cents out of every dollar.

Now, why is that so terrifying? Well, it's terrifying because you start to realize the speed the debt is growing, and then you start to understand some of the other drivers in that debt.

One of the things that happened January 1 this year, you know, what was the big change? Baby boomers. Every 8 seconds, someone turns 65 in this country for the next 18 years. So think of that. Ten thousand a day for the next 18 years.

That's why you see many of us around here saying we need to tell the truth how devastatingly ugly these numbers are, and that if we step up and deal with it now, we can fix it. But you can't deal with it with a bunch of silly rhetoric.

So let's walk through some more of these slides.

Right here is the 2010, and you see this blue. The blue is, we'll call it mandatory spending, entitlements, Medicare, Medicaid, Social Security, interest on the debt. But look, when you step up, when you step up to what is functionally four budget years from now, because we just did the 2012 budget, looking at 2016, you start to realize the growth in the spending, the growth in the entitlements. One of the things that keeps not being shared with the American people is, when you look at our 2010, and the 2011 number here would be out a little bit further, we don't take in enough revenue today to even cover the mandatory spending. If you see our revenue line, it cuts through right about here.

So think of that. Every dime of defense is borrowed. Every single dime of discretionary is borrowed. And we're about $100 billion short on even covering the entitlements, the mandatory spending. We borrow a little piece of those dollars that go into the entitlements, and it continues to explode in the future years.

I know these are a lot of slides, but when we get down to the ending part, I think you're going to find some of them sort of fun. But we first have to walk through sort of an understanding of the pie chart.

This is 2010. 2010, the mandatory spending was sitting about 63 percent, 62 percent of all the spending in government. Defense Department, other discretionary. And when I said ``all the spending in government,'' understand things like Fannie Mae, Freddie Mac aren't even part of this. They're off the books on this.

Now, when you look at this line here, that blue, look how fast it starts to move up. In 2016, it goes from here, where we're about 63 percent, and now we hit 72 percent. Think of that.

We just did what? The 2012 budget. 2016, four budget cycles from now, the mandatory spending, the entitlements are consuming 72 percent of our budget. The amazing thing is, in that cycle, the money that is going to discretionary, actually, we predict to go down in those 4 years.

So you start to understand the mandatory is consuming what we are. You get folks who start to raise their hands at some of the town halls and say, well, why not just raise the marginal tax rates? Let's go out and tax everyone a little bit more.

There's some fascinating math on that, and we've got 60 years of history looking at it. This is one of my favorite charts. For someone that wants to follow this, you can actually go--and I have a tough last name--it's Schweikert.house.gov. You'll see these charts on there.

This is when we had very high marginal tax rates back in the forties, fifties, early sixties, very high marginal tax rates. Over here is where we have very low marginal tax rates. And there's this normalizing effect. There's actually a couple of Ph.D.s who've written very detailed papers on this normalizing effect. Or even during times of very high marginal tax rates and very low marginal tax rates, guess what happens? We take in about 18.2 percent of gross domestic product.

I don't know. Maybe in the math out there, maybe in the logic out there, maybe in the human nature there, when you tax people a lot, they find other ways to take their income. Maybe when you tax them low, they are willing to work more hours. But somehow, high marginal tax rates, low marginal tax rates, we basically take in the same percentage of gross domestic product, of GDP. It hits that 18.2 percent.

So when folks look at you in the eye and say, oh, just raise marginal tax rates--we're going to tax the rich more; we're going to tax everyone more--it doesn't do it. It doesn't take care of this massive debt that is consuming us as a people.

What you have to do is you have to grow that line, which is the size of the economy. You must grow this economy. Because as you start to look through these numbers, you come to the realization, yeah, we have a huge spending problem. But we can never cut enough. We have to grow, because it's two sides of this pendulum, and both of them have to be in motion. We have to grow, we have to cut the spending, and we have to deal with the reality that the mandatory spending, the entitlements, are eating us alive.

Let's actually start to walk on some of what I would like to refer to as political folklore.

When we hold many of our town halls back in my district, and I am blessed to represent Arizona's Fifth District. It is an amazingly wonderful place. It is Scottsdale and Tempe, Fountain Hills, Ahwatukee, and Mesa, and we will often get hands that will pop up in the back of the room and say, ``Mr. Schweikert, or David, why don't we do this. If we go out there and tax Big Oil, we could balance the budget. Right?''

They mean well. I believe the participants at our town halls really mean well when they raise that hand, because they have seen members of this body tell them that, and they haven't been told the truth.

When you look at the numbers, here is 2011, hard dollars. You can call them subsidies, you can call them depletion allowances, you can call them incentives to drill and produce more petroleum products, but the gray here is fossil fuels. And just for comparison, we also put the $8.72 billion of the subsidies that go into green energy. But for the fun of it, let's just talk about this part right here, the $2.44 billion that is in 2011.

Well, think about this. If you are borrowing about $4.7 billion every single day, how can a Member of Congress look in the camera, look at you, and say, ``Well, if we would just tax Big Oil more, maybe that would help solve the debt problem?'' It doesn't even make a drop in the bucket.

We can have a little fun with this, because I have been trying to find a way
to talk about big numbers. I was blessed in my previous life; I lived in a world of big numbers. But how do you visualize $1 trillion? How do you visualize $1 billion? How do you visualize $1 million for many people? So we have been playing with the idea of, Let's make it time.

So your government right now is borrowing about $4.7 billion every single day, every single day. So let's just think about it, $4.7 billion every single day. Those taxes on Big Oil--let's make it this. Let's make it taxes on all. Let's just remove those depletion allowances, those tax credits, which are also tied to depreciation that all other businesses get. But let's just wipe them all out. Guess what it buys you? It buys you about 2.2 minutes of borrowing a day.

Now, how many of you feel like you have been told that?

You know, once again, we are engaging often around this place in political theater instead of math. That's been one of my greatest frustrations in my short time here: I wish I saw more Members carrying around their financial calculators so they could look the American people in the eye and tell them the truth.

But think about that. The whole, we will call it, fossil fuels subsidies, tax credits, depreciation allowances, incentives to drill would buy you about 2.2 minutes a day. Oh, come on. And that's just assuming that every dollar came in, and you didn't slow the economy down and didn't slow energy drilling down or energy production down. So this is just throwing your hands up and saying, let's just pretend for a moment that we got rid of those, and it becomes pure income.

Let's actually go to the next level, because there's always that other person that raises their hands and says, ``Well, David, I have heard that if we would go out and we would tax the rich more.'' Remember, that lame duck Congress last December extended what a lot of folks call the Bush tax cuts. Now, around here we often call them the Bush-Obama tax cuts because President Obama is the one who signed them in December. But they extended those tax cuts. And weren't those tax cuts for the rich, and wouldn't that balance the budget?

Well, back to that small problem called math. Let's pretend for a moment that they hadn't happened, and let's pretend that it didn't slow down the economy, and let's pretend every dime that some folks have predicted came in. A lot of this place operates in a fantasy world. Why can't we? So we never had the tax extensions that happened in December. What would it buy you? Well, we once again borrow $4.7 billion every single day. It would buy you about 28 minutes. Think of that, 28 minutes.

So now I'm at my town hall. I've had two hands go up. The first one saying, ``Well, David, if we would tax Big Oil, then that would balance the budget.'' Well, what did we learn on the last slide? That was about 2.2 minutes of borrowing every day.

And then the other hand goes up saying, ``If we would tax the rich more.'' As a matter of fact, why don't we do in this slide that tax extenders never happened, so everyone, rich, poor, middle class didn't get the benefit of that extension of the tax cuts last December? Well, guess what. That buys you 28 minutes.

So think about it. We are doing really well here. We are up to 28 minutes plus 2.2 minutes. So now, let's see, what if we do this, because there's always the other hand that goes up and says, ``David, I bet you we could balance the budget and wouldn't have this debt and deficit if we did this: We tax Big Oil. And those Bush-Obama tax extenders that happened last December in the lame duck session, we never had that, because those help the rich. Oh, and by the way, if we had never had the wars, you know, if we didn't have Afghanistan, if we didn't have Iraq--and I believe actually in our number here it didn't even have Libya--we could balance the budget then. Couldn't we?''

So we actually, literally a couple hours ago, sat down and said, Let's add it up, and let's make it on a per hour basis so the American people can understand the crazy spending that's going on around this place and how fast the numbers are eroding on us.

Back again to our math: We borrow $4.7 billion every single day. And let's go back to our pretend world. Every dime of those oil subsidies and depreciation allowances and tax credits come in, and it doesn't actually slow down jobs or the economy and every dime of those taxes were to come in. Even though probably if you did that, you would slow down the economy and people would work less and you would have less dollars. But we are living in our fantasy world here. And because we didn't have the wars, none of that money would be going out the door, even though certain portions of that are actually already built into the defense budget. But every dime that is equated to Iraq, Afghanistan, and now Libya.

What would it buy us? Well, we are borrowing that $4.7 billion a day. Guess what? It buys you 3 hours of borrowing.

Think about what you have heard around here, and how many people you have seen walk up in front of a microphone and a camera look you in the eye and say, ``Well, if we did these things, we wouldn't have this debt?'' They are not telling you the truth. All those together are only 3 hours of borrowing.

And, let's see. If I remember correctly, there's like, what, 24 hours in a day? I'm looking for some honest discussion about the other 21 hours a day. You've got to go back to those first boards that I put up and have an honest discussion about entitlements, about the mandatory spending, because they are what are exploding on us. They are what are consuming us as a people.

We can do this. We can save the future for our kids and our grandkids. We can make sure that these programs exist. But we have to do it rationally, and we have to for once do it honestly, fact-based, maybe someone actually holding a calculator. Because the rhetoric around here, the political folklore around here, when they are willing to look you in the eyes and base their whole world on something that only buys you 3 hours of borrowing a day, you are not being told the truth.

We try to add literally two to four slides a week. We are engaging in a little project. We are a freshman office, but we have some very smart young people who are very good with their calculators, and we are trying very hard to find a way to make these gigantic numbers digestible so we can all understand them so we can have a rational conversation of how we save our country.

If you will go to Schweikert.house.gov, you are going to find a number of these slides. As a matter of fact, all of them are on there, and every week, I promise you, there are going to be more coming. And maybe if we all start to tell each other the truth about the math, we can actually tell the truth about how we are going to save the country.

With that, I yield back the balance of my time.


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