Issues of the Day

Floor Speech

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Mr. SCHWEIKERT. Mr. Speaker, I thank Congressman Gohmert for yielding to me.

For anyone who is not particularly familiar, we have sort of mechanisms. Last night, we were running late, and once we hit 10 o'clock, we were shut off. And trying to do 21 boards in 8 minutes, I apologize to those who have to try to take our words down.

But I wanted to just touch on a couple of things. One really quickly, we were just blessed to have Secretary Yellen in front of Ways and Means. I have tremendous respect for and have built a relationship with her when she was Federal Reserve Chair.

I want us all to pay attention to a promise that the Secretary and the President have made, and that is the new spending initiatives will be covered by the new taxes, the new revenues. I assume that is an honorable way to do it. We will fight over what the spending priorities are, and none of these games where we are going to do 15 years of tax hikes to cover 10 years of spending because, let's be honest, that is a complete fraud on the American people.

But the best math that is coming out from a number of groups right now is the tax hikes that are being proposed, the revenues, are only going to cover maybe, if you are being optimistic, Mr. Speaker, on the receipts, 50 percent of the new spending.

Yesterday, I think it is Penn Wharton that put out their model, I guess last week, that the capital gains tax itself loses $33 billion over the first 10 years. So, it is not scored to 15 years; it is 10.

But, Mr. Speaker, if you do what is called the basis, which is how much is subject to the capital gains tax even though the perversity of it is that a huge portion of that is actually inflation we are going to tax, it would raise, in their model, $133 billion. The administration, the Democrats, have said this will be 330. So, they are only hitting about one-third of the revenues that have been promised from the capital gains tax.

I really want to help the Democrats keep their promise that their new $4 trillion proposed spending will be covered by their new receipts, their new revenues. They have a really interesting math problem. Either they are going to have to cut their spending substantially in half or dramatically raise taxes on the American people.

We asked Secretary Yellen: Should we expect a value-added tax? Is a VAT in our future?

The math is really ugly--we are going to talk about that in a second here--to cover all these new spending initiatives plus just the demographic curve that is already about to crush us, debtwise.

The answer was an interesting one. It is: Well, that is not part of our current proposal.

For everyone who is interested in tax policy--and I accept that maybe some of us are a little bit on the geek side--I am fascinated with the tax on Medicare financing. Keep an ear out because the only way I think the left is going to get these types of revenues is to actually go to completely new revenue-raising, new tax regimes.

Let's talk about what I consider is the greatest fragility of our Nation's future. It turns out it is not Republican or Democrat policy. It is demographics.

What is the fastest growing demographic in the United States? It is getting old. We are graying very, very fast. It is baby boomers.

When you look at this chart--and we did this last night, but we did it sort of caffeinated, very fast--take the next 30 years. This is without all the new spending that has been proposed this year by the new administration. This is our baseline, $101 trillion of debt in 30 years at today's dollars. This is inflation-adjusted dollars, 67 percent.

Functionally, $68 trillion of debt is just Medicare. Only about $3 trillion is the rest of government, so it is Medicare, then Social Security.

If you believe, Mr. Speaker, like I do, that we have an absolute moral obligation to keep our promises to those folks who have paid into Social Security and Medicare, then what are we going to do to keep that promise?

The reality of it is that this is what buries us as a country. It is our demographics and the promises that are dramatically unfunded. Remember, Mr. Speaker, it is only maybe 4 years or so that the Medicare trust fund--which is only part A, which is the hospital portion--that trust fund is gone.

Part B is actually seeing a doctor. Part C is managed care. That has its own little, in some ways, financial benefits. And D is drugs. Parts B and D are 100 percent out of the general fund. They don't have trust funds.

This is absolutely critical. This will drive all government policy. If you are someone who wants money for education, if you are someone who wants money for the environment or our military, then the fact of the matter is it is Medicare that consumes us.

One of my great frustrations is when you look at the math of how much is spending, Mr. Speaker, and then the financing of that spending, you get a sense that, as Republicans, we have this bad habit. We will go and say: Well, we will balance the budget through waste and fraud.

Democrats will go and say: Well, we are going to balance it by nationalizing healthcare, Medicare for All.

None of those are real. We are not telling the truth.

Let's walk through just a couple of things that are in my craw right now. This is just one portion of the left's bill called H.R. 3. From a conceptual standpoint, it is an honest debate of what are we going to do about prescription drug costs.

The methodology, though, Mr. Speaker, if you actually read the research, in a decade, it is killing people and costing more because we are on the cusp of a time of miracles.

This is really important to get our heads around. We have all heard about this concept of mRNA. We have talked about it for 20-plus years. Years ago, I used to come to this mike and talk about this concept of bio-foundry.

Mr. Speaker, the fact of the matter is, we can take a snippet of your DNA and a snippet of your cancer, your disease, or your virus, and it would take weeks. And for the CAR-T therapy for cancer, it was $350,000 just to get you your shot, but it was curing people. We just moved up 10 years in technology.

That is one of the amazing things Operation Warp Speed. It is actually one of the few positive things I can say that came out of this pandemic is it is here.

Look up Tesla and mRNA, Mr. Speaker. You find out that all sorts of very disruptive companies are investing in these little bio-foundries.

We are on the edge of curing HIV, sickle cell anemia. We now have a cure for hemophilia. And we are also going to cure all sorts of cancers. There are some amazing things happening. The problem is they are expensive, Mr. Speaker. But they cure you.

H.R. 3 does something that I think is fairly dark and fairly sinister, and we need our brothers and sisters on the Democrat side to be honest with constituents, and that is something called reference pricing. If a quality year is bought through a drug, but it costs more than, in this case, $37,000 in Great Britain, Mr. Speaker, you don't get it.

H.R. 3 does this where they take a basket of some of these countries and say that we are going to use their cap. So, you are prepared to turn to your constituent and say: Oh, that drug is $40,000. Yes, it gives you that quality year, but it is over our cap, so we are not going to provide you that pharmaceutical.

By doing that, we just destroyed small, disruptive bio-foundry pharma that is curing people. We are going to subject our population to say that the misery you have today is the misery you are going to have tomorrow, Mr. Speaker, because we are going to shut down the disruption. We are going to protect--here is the sinister thing that healthcare economists talk about. The Democrats' H.R. 3 actually protects Big Pharma because the industry now becomes you just adjust your current patent, and that is how you make a living, Mr. Speaker.

But the ones that nip their heels that cure things, it is like the hepatitis C we cure now. Those cures don't come because we have just wiped out the income stream.

We need to rethink. If Republicans and Democrats have a common goal that we need to look at pharmaceutical costs, then destroying the pipeline that cures people and that ends the misery is really dark.

Mr. Speaker, we Republicans have our sins. How many of us will get behind a microphone and talk about price transparency? Price transparency is a really good thing, but it has almost no real effect on the price of healthcare. The best academic studies we have been able to find in our office is 0.1 to 0.7 percent.

My point is really simple here. The ACA, ObamaCare, was a financing bill. It was who got subsidized and who had to pay. Our Republican alternative was a financing bill. It was who had to pay and who got subsidized. Medicare for All is a financing bill.

When are we going to have the really tougher discussion of what we pay? Let's disrupt the price of healthcare through technology.

How many of us went to Blockbuster Video last weekend? We don't because now we hit a button called Netflix and all sorts of other things. We allow disruption to happen in other parts of our healthcare, but we have built so many regulatory barriers and so many licensing barriers, crazy things that would disrupt healthcare.

One of my grand proposals--and this one needs to be Republicans and Democrats coming together--that $68 trillion over the next 30 years in just Medicare spending, that is a substantial driver for U.S. sovereign debt. Thirty-one percent of it is just diabetes.

It turns out, Mr. Speaker, if you and I can have a revolution in ending the misery of diabetes, it is also the single biggest initiative you can have to U.S. sovereign debt.

It is time Republicans and Democrats come together and do an Operation Warp Speed on diabetes. Yes, there is really neat research that is on the cusp of almost curatives for type 1, the autoimmune pancreatic cells. But the political side is going to be really tough for all of us because we are going to have to talk about type 2, which has a substantial lifestyle component in it. It needs a discussion of what we do in nutrition support as a country and what we do in our farm bill as a country.

Mr. Speaker, if we care about people, if we really are going to come here and give speeches about how minority communities and my Native American communities from Arizona had such horrible outcomes during COVID, are you willing to look at the comorbidities that were there before COVID? It is diabetes.

And it turns out, spending money on this management curative--and I really want curative--turns out to be one of the most powerful things you and I could ever do for U.S. sovereign debt going forward. It is 31 percent of just Medicare spending, and the numbers we are still working on for Medicaid and other things.

So part of my other proposal is there are things we could do almost overnight that have incredible impacts on the cost of healthcare in this country; and here is one that I beg of us to start getting in our lexicon.

Sixteen percent of the healthcare spending this year, over half a trillion dollars, just this year, will be people not taking their meds or taking them incorrectly. You have hypertension, you don't take your meds, you have a stroke. You have high cholesterol, you don't take your meds--and those things are cheap and inexpensive. Grandma is forgetful, or we get busy in our lives.

And it turns out there are things where the pill top talks to your phone. It talks to you. There are other ones where it dispenses the pharmaceuticals to you.

It turns out the technology of getting people to take their pharmaceuticals properly, if we would understand its impact, that is 16 percent of U.S. healthcare spending is just not taking our pharmaceuticals properly. That is a half a trillion dollars.

Think about what you could do with a half a trillion dollars a year-- not over 10, not over 15; a year--and how much less misery you would have in this country by people having strokes, getting sick.

This is not a revolution of trying to crush pharma or go after drug prices. It is actually taking a look and using this crazy thing we call, oh, yeah, math, and a calculator, and also technology.

And, yes, it doesn't work necessarily in our political lexicon. It is a little harder to campaign on, but it happens to be factual.

The other thing I am going to beg of us--and Congressman Gohmert, I appreciate him yielding to me. So I promise I will only do one or two more boards.

I need us to think revolutionary. Before the pandemic, a Democratic colleague, Mike Thompson, from California, a good guy, has worked with me on telemedicine. It was a piece of legislation that substantially was going to go nowhere because there were lots and lots and lots and lots of lobbyists who hated it because it disrupts the money.

But when the pandemic hit, our telemedicine bill became law. It expires when they declare the pandemic over. The expansion of reimbursement and access to telemedicine goes away. We need to fix that.

But we also now need to understand what is telemedicine. Telemedicine is the thing you can wear on your wrist; the thing you can wear on your chest; the thing you blow into.

The technology is here to crash the price of healthcare. And all the skeptics who attacked telemedicine before the pandemic, oh Grandma's not going to be able to use; they don't know how to work FaceTime; no one is going to want to make a phone call to a doctor or a healthcare professional.

Turns out they were wrong. We have the last 18 months of proof. The satisfaction rates are off the chart. A, we need to continue it, but we need to expand the definition.

And then the other things the pandemic has brought us is things we never thought of.

How about a little home kit?

These are available today. Actually, you can get them sent to your house in a day. Blow into it. It tells you if you have COVID-19.

Well, if that exists for COVID, what would happen if I turned to you and said, turns out we have the technology today where you can have a medical lab in your medicine cabinet. You blow into it, it tells you if you even have cancer cells or a virus or bacteria. It exists today.

We, as a body, need to legalize the disruptive technologies that allow us to disrupt the price of healthcare if we are going to save Medicare, save the country from the crushing debt. And, yes, we are going to annoy a lot of incumbent investors and a lot of incumbent businesses, but it is the right and moral thing to do.

We have a society that has become a country of oligopolies, and Congress has become a protection racket. We protect incumbents; not incumbent elected officials, incumbent business models.

Yet the disruption of the technology that is here today crushes the misery of so many of our brothers and sisters out there who have chronic conditions, that get sick.

We can crash the price of healthcare. We can make us healthier as a society. We can take on, in that same breath, the crushing debt that is here. And it is demographic. It is coming. No matter how many speeches we give pretending we have a way around it, the only way around it is we have got to change the actual price of healthcare.

I beg of us, we need to think differently because this place, often our policy sets, sort of sounds like it is still the 1990s.

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Mr. SCHWEIKERT. Oh, I would love to yield.

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Mr. SCHWEIKERT. I have actually been blessed to spend lots of time with Professor Laffer and, actually, a couple of other folks who also have Nobel Prizes in economics. They tolerate me.

Gilder, I consider a personal friend, if you really want to geek out.

First off, you have a conceptual problem and the left doesn't--we have got to work with them to first admit we tax income. Property taxes are really the only things we tax wealth. We tax your real estate wealth.

So the leaked IRS data, which is a real problem if you want confidence in a tax system that, once again, the IRS is back to being weaponized. If you want to tax wealth, that is a different tax system, and there are all sorts of games you can play with that.

You could take your wealth and say, all right, here is what I am going to do. I am not going to take an income. I am going to borrow from it.

So how do you tax it?

You have to conceptualize very, very different.

We also--we actually have the math, even though it may not happen in the fiscal year you want it to. The ultrawealthy give away most of their wealth. That has been a tradition in this country, particularly for about a century and a half.

A tax system to work--and the gentleman and I have actually had a side conversation about this. You have to find what is the most--or the least disruptive tax that maximizes revenue, but also maximizes economic expansion. So we are already seeing some data that the Democrats' proposal on capital gains tax, actually, without changing the basis, actually raises substantially less revenues.

Now how is that possible?

It is because you stop engaging in those economic activities.

So somewhere there is a sweet spot that maximizes revenues, but also then maximizes economic activity. And I have an absolute fixation that 2018, 2019 were miracle years economically for the working poor in this country. It is 2 years where, actually, income inequality genuinely shrank; the broad based nature of the working poor getting dramatically less poor.

That shouldn't be a partisan fight. It should be the bipartisan goal.

And the rich got richer, but not as fast as the poor got less poor. And that is back to, in a weird way, a long answer to your question.

We need to have an honest debate of what maximizes revenues while minimizing economic damage. And right now, just throwing out numbers, and then throwing out fake--and I am being a little brutal on that-- fake models from the administration saying we are going to raise $4 trillion, we are going to cover all of our new spending, when all of the other models--and very soon joint tax will score it and we will see what the reality is.

But everyone it is scoring right now, the Dems are only getting about half the revenues. And we have already seen the first analysis of the corporate tax hike. It unemploys 1 million Americans in the first 24 months.

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Mr. SCHWEIKERT. That didn't lose their jobs. And the harder part of the scoring is--and this was one of the miracles of 2018 and 2019--the Democrats repeatedly attacked the tax reforms from the end of 2017 and the regulatory reforms.

But there were so many people working, and there was such vitality in the economy that Medicare part A, the trust fund, grew in years. Social Security grew in years because there were so many people paying their payroll tax.

They didn't really pay income tax because they were part of the population that had been removed from having to pay income tax because we changed--but it turns out, if you actually, truly believe we have a societal obligation to keep our promises, to keep Social Security, to keep Medicare vibrant, it turns out you need an incredibly vibrant economy for people to be working. You can do that also by a rational tax policy instead of a punishing one.

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Mr. SCHWEIKERT. I am sorry; it is a long answer, but it actually has----

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