WASHINGTON, D.C. — U.S. Representative David Schweikert (AZ-01) delivered a speech on the House Floor last night in which he underscored the devastating economic impacts of policies enacted in the last two years when Democrats controlled the House, Senate, and White House. Rep. Schweikert also discussed the need to embrace immediate R&D expensing to increase productivity and ultimately grow the size of the economy.
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 U.S. not taking its debt seriously, which led to the first-ever U.S. credit downgrading in 2011:
[Beginning at 1:00 mark]
“I’ve got to say this over and over and over and over and over. In 2011, [S&P Global Ratings] put out a paper and they downgraded the United States debt. And their downgrade was a tick. [The United States was] AAA and we went to an AA+ [rating]. But if anyone would bother to read it, because if I hear one more person from the press go, ‘Well, in 2011, when they had the debt ceiling fight, they got downgraded.’ That isn’t what S&P said. Read the damn thing. It’s very simple. We got downgraded as a country because we were not doing anything about debt. It makes it very clear, and I [read part of the report] a couple of weeks ago here on the floor. It basically says the United States Congress is not taking the debt seriously. It was not about the debt fight. It was about the solution [which was negotiated] to raise the debt ceiling, [but] didn’t actually have enough teeth and mechanisms. And I must tell you, Mr. Speaker Pro Tempore, the debt and demographics are dramatically worse today than they were in 2011.”
On the Democrats’ Orwellian-named Inflation Reduction Act:
[Beginning at 2:19 mark]
“One thing that has driven me nuts, and I’ve been here multiple times on the floor with different economic boards. But the Democrats’ Orwellian-named ‘Inflation Reduction Act.’ If you actually look at the spending in there, they put in about $271 billion of [what are] functionally grants and handouts to clean energy companies. Even the latest CBO score that we just got because of the [Limit, Save, Grow Act] negotiations to raise the debt ceiling and cut out many of these things actually came back and said, ‘Well, we may have missed the number by about $300 billion.’ In other words, our own congressional budget folks basically missed it by 100%. Goldman Sachs came and said it would be $1.2 trillion in spending, but CBO at least now has updated their numbers. This is the sort of thing that if you think about those levels of spending, and then you call something the ‘Inflation Reduction Act’ and you wonder why inflation continues.”
On core inflation remaining steady:
[Beginning at 3:33 mark]
“One of the really disturbing things, even on last month’s numbers, is the core inflation in the United States is staying pretty solid. The danger in that is everyone gets a little bit giddy [about] fuel prices [and] food prices going down, but they also go up. Those are actually numbers that move up and down an awful lot. But the problem is the core gets built into everything, and the effect that is going to happen on your pension, on your family’s ability to ever buy a house, on the Social Security pension system. You do realize we lost an entire year of actuarial soundness? Now, the Social Security trust fund is functionally gone in about nine years. At that moment, if you’re on Social Security, you will be taking a 23% reduction if we do not find a way to fix it. Almost every bit of that loss of a whole year from the previous actuarial report was the inflation cost-of-living adjustment [COLA]. Understand how devastating the policies of this place when the Democrats controlled the House, the Senate, and the White House, what they’ve done to you and your family. I don’t care if you don’t love Republicans, but do understand your country is poorer today than it was a couple of years ago.”
On the value of immediate R&D expensing:
[Beginning at 12:40 mark]
“Well, if you actually read how the tax code works, you actually end up paying taxes on revenues you haven’t even produced yet because of the way depreciation works. But if you get to take it all at one time, you speed up the capital cycle. Meaning I bought this piece of equipment, we got this much more productive. Oh, heaven, it’s three years later, I can buy the next one and expense it then and get that much more productive. And you could actually see what they call the productivity cycle. But the tax receipts are a timing effect. So, you get this depreciation over seven years, or you take it in one year. But the basic depreciation you get is the same. It’s a timing effect. And the reason you’ll see CBO score [differently] is because we’re always doing things in a 10-year window. And then you often don’t get the dynamic score. What happens when you have the productivity step up and what does that produce in tax receipts? And then the new one, and the new one, and the new one. Everybody loves their individual tax cut. But if you want to grow the economy, ideas like expensing, that immediate depreciation to make society more productive, that’s where you get your bang for your buck.”