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March 31, 2023

Schweikert Warns Congress Not to Repeat Fiscal Mistakes of 2011

WASHINGTON, D.C. — U.S. Representative David Schweikert (AZ-01) delivered a speech on the House Floor this week in which he explained that simply raising the debt ceiling without curbing unsustainable deficit spending would signal to debt markets that the United States doesn’t take its debts seriously, risking a repeat of the 2011 U.S. credit downgrading. Rep. Schweikert rebuffed President Biden’s claims that Republican Members of Congress are considering cutting Social Security and Medicare and continued to urge both parties to work together to keep these entitlements solvent through the next decade. Rep. Schweikert also noted that encouraging competition in the pharmaceutical industry is the key to crashing the price of prescription drugs instead of subsidizing Big Pharma in exchange for political checks.

Excerpts from Rep. Schweikert’s floor speech can be found below:

Click here or on the image above to view Rep. Schweikert’s remarks.

On the dangers of repeating the 2011 U.S. credit downgrading if the U.S. doesn’t demonstrate to debt markets that it takes its fiscal responsibility seriously:

[Beginning at 2:22 mark]
“[In] 2011, the United States actually got a downgrade. Standard and Poor’s lowered the United States from its triple-A rating. They took us down a notch. They did not lower our credit rating because of the debt ceiling. They lowered our credit rating because we didn’t provide a credible path on managing the scale of the debt. And this is 2011. The numbers today are devastatingly more ugly. […] So in 2011, we moved down to a AA+ [rating]. But it was because we were doing nothing about budget deficits. And once again, I think it was yesterday a member of the Left [said to me that Republicans are] going to get us downgraded if we just don’t raise the debt ceiling. That isn’t why we were downgraded in 2011. It’s because we did not demonstrate to the world markets that we want to buy.

“Remember, [last year] we borrowed $48,000 per second. Every second of every day we borrow $48,000. Someone has to buy that debt to finance the 30% of our spending that we don’t cover with our tax receipts. Wouldn’t the people who buy those bonds like to know we intend to pay them back. Does just raising the borrowing limit tell them we’re going to pay it back? What tells them [we’re going to pay it] back is we’re building a plan saying here’s how we’re going to basically deal with the debt over the coming decades. And the people that say we’re just going to balance, fine, I can get you the balance. But I don’t think most folks have any concept how bloody that would be. So maybe the better way to think about it is the size of the economy. We’re going to maximize the economic growth of the economy and try to minimize the growth of the debt. So we stabilize what we refer to as debt-to-GDP. Great concept, but we have these people that think they’re geniuses around here [saying, ‘Republicans are] going to ruin the credit rating of the United States!’ It was the threat to the credit ratings. We do not communicate to debt markets here and around the world that we’re taking our debt seriously.”

On President Biden accusing Republicans of wanting to cut Social Security:

[Beginning at 6:36 mark]
“But in 2034, the Social Security trust fund is gone. Are we going to let seniors take a 23% cut? Are you going to double senior poverty? Well, remember, the Democrats have made it almost impossible to have an honest conversation about entitlements. You can’t have a conversation on how we’re going to save Social Security. President [Biden] got behind that microphone there and made it toxic. A year’s worth of our work where we’ve been trying to come up with a way to save Social Security. And we’ve been doing it with the Senate, with Democrats. And he knifed us. That’s really moral. […] There have never been conversations about cutting it. For that year I was the senior Republican on the [Ways and Means Social Security Subcommittee,] not a single person ever spoke to me about cutting it. We were working on trying to save it. And others I’ve been working with run away from the issue saying, ‘Look, the President’s made it toxic. The years worth of work, all the money we spent with actuaries, everything else, it’s over.’ You know, if Democrats aren’t serious, they’re going to use it as a weapon. We walk away and once again, we sit and let the problem fester. And every day we wait, the math gets more difficult.”

On the misconceptions in President Biden’s budget:

[Beginning at 9:43 mark]
“Three-quarters of the future debt is actually the shortfall in Medicare. And one of the frauds in the President’s budget is they come back and say, ‘Well, we’re taking care of the Medicare Part A trust fund with $660 billion over the next ten years.’ Okay, except did you conceptualize this — over the next 30 years, the shortfall in Medicare is $80.5 trillion when you do the shortfall and the interest. $660 billion is a lot of money over ten years. It ain’t $80 trillion.”

On creating market disruption among pharmaceutical companies to lower prescription drug costs:

[Beginning at 34:21 mark]
“Remember the outrage here over insulin prices? They’re outrageous. And the brain trust on the other side’s idea was to take $36 billion and give it to Big Pharma to subsidize them to buy down the price of insulin. So you’re going to complain about Big Pharma and their outrageous prices on insulin, and then you’re going to hand them billions of dollars. That’s the insanity. But it’s actually great politics. We’re going to beat you up, but I’m going to hand you billions, and you’re going to write me political checks. Yay! I mean, does anyone else see the scam? But there are solutions like this.

“This is a co-op, and I think actually they’re in production this year. This is a co-op about 70 miles from where I’m standing right now. And it was insurance companies, state Medicaid systems, and hospitals. They all got together and said, ‘Hey, you realize most insulin is actually off patent. The big eight generics out there are off-patent. Why the hell aren’t we just making it ourselves?’ The solution is not a command and control rationing model, but actually a market supply model of [getting] everyone and their cousin in the manufacturing business. The elegance of this is this is functionally a co-op. The fact they are coming online has now disrupted the insulin market. You actually see some other companies [like] Johnson & Johnson I think, crashing the price because they were coming to market as $30 per vial, $55 per box. You do realize the co-op was bringing insulin prices less than the subsidized price that was going to cost taxpayers billions of dollars. That is the absurdity around here instead of doing a market solution that actually works for everyone. The Left passes subsidized solutions that only certain people get the benefit from, and Big Pharma got the checks. Did anyone here show up at their basic economics class?”

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