Congressman David Schweikert (R-AZ-01) raised an alarm about what he believes is the oncoming fiscal demise of the U.S. in a speech from the House floor.
Schweikert explained that a simple series of calculations “point to a shrinking labor force, and lack of young people in our society, and the reality that in 8 years, the United States will have MORE deaths than births,” citing the Congressional Budget Office (CBO).
"The fact of the matter is, and @RayDalio said it himself, there's a shortage of borrowable money in the world. We've run out of global savings. Our goal is stability, not collapse." – Chairman @RepDavidhttps://t.co/2dkQCJcYIG
— Joint Economic Committee Republicans (@JECRepublicans) March 26, 2025
The congressman’s speech coincided with the release of a devastating report from the CBO, which warned that the federal government’s capacity to borrow through “extraordinary measures” will be exhausted by the end of August or September.
Speaking to the House, Schweikert laid out the dire projections of the CBO report, as well as the remarkable insufficiency of the metrics the government is using, in the face of three unassailable facts: “debt, deficits and demographics:“
“I’m going to walk you through just how dangerous the game we are playing right now, because when you look at these charts — and this is online. Go on C.B.O. from last Friday. It’s not a hard read. Why are my brothers and sisters so terrified to tell the truth to the public? You have a country that — and I’m going to show the charts, that in 7 1/2 years we have more deaths than births. You have a country that, when we get out of the extraordinary measures…remember right now we are borrowing from different funds because we are up against the debt ceiling, we may be borrowing almost $70,000 every second of every day. For those of you who turn to me and say, ‘David, I demand you balance the budget.’ I could do it tomorrow. Lets’ see…if I use the 2024 numbers for every dollar we took in tax collections, we spend $1.39.
“Tell me the 39 cents you want me to cut. And the problem with that math is that when you look at the charts, you see what’s in blue. That’s everything a member of Congress gets to vote on, defense and nondefense. The only problem is. it’s 26% of the spending. So, if you ask a member of Congress right now to balance the budget, we can do it, we can do it. Gotta get rid of all defense, all non-defense, discretionary. That’s basically the park service, the EPA, all the agencies. And then tell me what portion…because you have to pay your interest or you blow up the world economy.
“Tell me what portion of social security, medicare, medicaid, other things you want to hack away at. The reality of it is, in this fiscal year, our projection is…for every dollar we take in tax collections, we are going to spend functionally $1.36.
“Do you understand how screwed—excuse me, yeah that’s the technical economic term— how SCREWED WE ARE when we don’t tell the truth about the math?
“And it is not fixable, but it is possible to stabilize. We can stabilize this. We just have to think and do things that are hard. So often around here, the thinking part is complex and it’s hard and we have to go home and tell our constituents the truth about math.
But remember, the math will win. How many have you heard about how people are protesting and terrified there are going to be cuts? Ok, let’s actually have a moment of truth about math. This was baseline. Over the next 10 years, we are going to spend $86 trillion. Next 10 years, CBO baseline, we are going to spend $86 trillion. The reconciliation budget had $1.3 trillion in cuts, and if we get lucky, we’ll get to $2 trillion over 10 years on $86 trillion of spending.
That’s what the left over here is losing their minds over because they need something. They have lost the working middle class. They’ve lost so much, and American voters no longer trust them because the spent decades not telling them the truth about the math. And it’s not hard, except the problem is 30% of that is borrowed. 30% of that is borrowed. And people are losing their mind that we are trying to cut $2 trillion on $86 trillion of spending. That’s what this place has become. This place has become a clown show of math.
“Think about this. We are functioning and going to spend about $7 trillion this fiscal year. We’re going to take in about $5 trillion. And this is in a time when the economy is good. We’re not in a pandemic. We’re not in a war. We’re not in a recession. And understand when you take some of these charts of interest exposure into the future, one of my charts, it shows in nine budget years interest, just interest is over $2 trillion a year. Just interest. Why aren’t we running around terrified here? If you care about your retirement or someone that’s crazy like my wife and I, we are older parents. I have a 2 1/2-year-old and a 9-year-old. You do realize for my 2 1/2-year-old, when he turns like 24 or 23, 25, every tax in the United States has to have been doubled just to maintain baseline services. This is the morality of this place.
“The United States and other countries are binging on debt. The United States borrows about 40% of all the world capital that goes into sovereign loans. His argument is, your problem is, there’s not enough savings in the world. We are consuming more money. China, Europe, now Germany’s going into the debt markets as they’re raising their spending caps. What happens in a world when there’s a shortage of borrowable money? Remember, every day when we borrow, what, $6 billion a day, functionally that debt has to be sold. Most of it’s actually financed domestically. You know, it’s in this pension, it’s in this bank…And then foreigners, except the foreigners have been lowering their U.S. Debt because they’re having to finance their own governments. And you start to look at our interest payments, and there’s this concept called a term premium. When we make the bond markets nervous, we pay a higher interest rate.”
Congressman Schweikert summarized the fiscal nightmare scenario saying, “And you look at the next 10 years, it’s the point I’m trying to make. Is, ok, here’s the growth. 24% of the growth in spending over the next 10 years is interest. 31% of the growth of spending over the next 10 years is Social Security and disability. 28% of the growth of spending over the next 10 years is Medicare. Other mandatory and discretionary growth, about 13%. But a portion of that is actually you think defense and other things in that. The fact of the matter is your government is an insurance company with an army.”
Donald Trump’s renewed pledge to “Make America Great Again” requires nothing less than reigniting economic growth and prosperity. Wealth creation is essential. Yet as Congress prepares to extend and expand upon Trump’s landmark Tax Cuts and Jobs Act of 2017, he can take matters into his own hands by issuing an executive order to index capital gains for inflation.
Taxing inflationary “phantom” capital gains is an unfair and ill-advised policy that punishes risk and success.
Consider this: You invest $1,000, and after four years of Joe Biden in the White House, you sell that investment for $1,100. But since inflation raged during Biden’s tenure, the $1,100 you receive will be worth less in real terms than the $1,000 you invested. And yet, under current law, you will pay a tax on your $100 capital “gain.”
Talk about perverse!
“As has been well documented,” writes Alan Auerbach, University of California economist, “realized capital gains may be subject to tax rates that easily exceed 100% of real gains in the presence of inflation.”
But it’s the law. And not only would eliminating it be the fair thing to do for investors, it would ignite a surge of American prosperity.
Eight years ago, the late Treasury economist Gary Robbins estimated that indexing capital gains for inflation would, by 2025, create an additional 400,000 jobs, grow the U.S. capital stock by $1.1 trillion and boost GDP by roughly $500 billion. Because capital gains were never indexed, average household income today is $3,600 lower than it could have been otherwise.
However, it’s never too late to start doing the right thing.
Congress has repeatedly toyed with indexing capital gains. In fact, indexing capital gains used to be a bipartisan issue. In the early 1990s, congressional Democrats touted indexing as an effective way to boost economic growth and benefit workers.
“If we really want to increase growth,” said a youthful Chuck Schumer, the then-future Senate minority leader, “there are proposals that we can do. I would be for indexing all capital gains, savings and borrowings.”
Having mastered the ways of the D.C. swamp, Schumer now opposes indexing capital gains. Listen to Congressman Schumer, not Senator Swamp.
Indeed, as Trump emphasized in 2019, “Indexing is something that a lot of people have liked for a long time. It’s something that would be very easy to do. It’s something that I am certainly thinking about.”
Looking forward, the Congressional Budget Office estimated last month that federal capital gains tax receipts will total $2.8 trillion over the decade ahead. If only one-fourth of those tax receipts—a conservative estimate—are due to taxing phantom gains, American taxpayers will pay $700 billion in taxes on income that doesn’t exist.
Opponents of capital gains indexation say the subsequent revenue loss would be too great. But inasmuch as inflationary gains should not have been taxed in the first place, a revenue loss is a good thing. It represents the correction of a tax injustice.
The second-order effects that Robbins documents should remove any reservations based on revenue loss. Without the federal tax on inflationary gains, asset prices will adjust until they reach a new, higher equilibrium. Investors will see their portfolios appreciate bigly.
It’s a safe bet that millions of American investors and pensioners would choose a Dow Jones average of 50,000 with indexation over a Dow Jones average of 44,500 without indexation.
As taxpayers realize real capital gains, the federal government will collect billions of dollars in new tax revenue. Federal tax revenue may ultimately be higher with indexation, not lower.
There is the question of whether Trump has the legal authority to issue an executive order instructing the Treasury secretary to issue new regulations indexing the capital gains cost basis for inflation. It comes down to whether the governing Internal Revenue Code section covering the definition of the word “cost” is sufficiently ambiguous to allow regulatory reinterpretation. Congress never specifically mandated that “cost” was to be determined in nominal terms, nor did it prohibit the use of real valuation.
According to a watershed 2012 paper by Charles Cooper and Vincent Colatriano in the Harvard Journal of Law & Public Policy, “jurisprudential developments over the last two decades have confirmed . . . that Treasury has regulatory authority to index capital gains for inflation.” With that justification, Trump has little reason to hold back.
James Carter is a contributor to The Daily Caller News Foundation and a principal with Navigators Global. He previously headed President Donald Trump’s tax team during the 2016-17 transition and served as a deputy assistant secretary of the Treasury for then-President George W. Bush.
A recent report from the Congressional Budget Office (CBO) suggests that the ongoing illegal immigration surge at the southern border will reduce the federal deficit by a staggering $897 billion over the next decade.
At first glance, this figure might seem like a silver lining to this national crisis. However, a closer examination reveals a more complex and concerning picture and reveals this report to be another example of the government trying to conceal the truth from American citizens.
While the CBO projects an increase in revenues of $1.175 trillion and an increase in mandatory spending and spending on net interest of $278 billion over the next 10 years, these numbers fail to capture the full scope of the situation. The report’s limitations and glaring omissions paint an incomplete picture that may lead to misguided policy decisions if Congress does not understand the actual fiscal impacts of the border crisis. By publishing such an incomplete report, CBO is playing a role in covering up the Biden-Harris border crisis and not giving Congress the information it needs to fix the problem.
One glaring omission is the exclusion of discretionary spending impacts. The CBO acknowledges that the immigration surge will likely put pressure on many programs funded through discretionary appropriations. In fact, CBO estimates that increased discretionary funding as a result of the border surge could total around $200 billion over the 2024-2034 period. This substantial sum is mentioned but not factored into the deficit reduction calculation because, as CBO says, “no clear basis exists for projecting how the immigration surge will affect [congressional] funding decisions.”
Moreover, the report “does not include estimates of the surge’s effects on state and local budgets.” The CBO itself admits that “[r]esearch has generally found that increases in immigration raise state and local governments’ costs more than their revenues, and CBO expects that finding to hold in the case of the current immigration surge.” New York City alone spent $4.3 billion from July 2022 to March 2024 to accommodate immigrants and comply with existing housing policies. Extrapolating this to other cities over a decade paints a sobering picture of the financial burden on local communities.
The state of Texas was forced to take action on its own. First with Operation Lone Star (OLS), a response to the border crisis triggered by the Biden-Harris administration’s failure to enforce federal laws along the border. OLS has cost Texans about $11 billion and that’s just to secure the border. That does not include costs to the state’s health care, education, and criminal justice systems — which increase with the addition of aliens who have been let in by the Biden-Harris administration. The CBO report does not adequately assess or include these costs and they can be found in every state.
The revenue calculations assume lower tax compliance rates among the population who entered the nation via the border crisis. This raises questions about the accuracy of the projected $1.2 trillion in additional revenue.
Beyond the fiscal impacts, the report hints at broader economic consequences. The illegal immigration surge is expected to lead to lower productivity, reduce average wage growth (particularly for non-college educated workers), higher interest rates, and increased medical and food prices. These factors could have far-reaching effects on the American economy and the well-being of citizens.
Perhaps most concerning is the CBO’s own admission that its “estimates of the budgetary effects of the immigration surge are highly uncertain.” The report lists numerous “[m]ajor sources of uncertainty,” including the number of aliens who have entered the country, the duration of the border crisis itself, the changing immigration status of individuals, and their impact on productivity. Essentially, many metrics crucial to the estimate are shrouded in uncertainty and the authors of the report knew it and still published these estimates that claim mass illegal immigration is good for the deficit.
Making policy decisions based on such questionable projections, where the political left has clearly put its thumb on the scale, could have disastrous consequences and exacerbate existing problems. We must demand a more comprehensive analysis that accounts for all costs — both seen and unseen. Not a report that is politically appealing to the left’s narrative on illegal immigration.
The border crisis is not just about numbers on a balance sheet. As we debate immigration policy, we must consider not just the potential fiscal benefits but also the hidden costs and societal impacts. The Centers for Disease Control and Prevention estimated there were 74,702 fentanyl overdose deaths in the United States last year — a drug we know flows in through our open southern border.
Human trafficking and smuggling into the United States is a booming multi-billion dollar business for Mexican cartels. We must end this crisis now. When comparing the fiscal impacts to the human toll, money seems secondary and that is true, but understanding the monetary effects is important to solving the larger problem.
The CBO report should be seen as deficient and, overall, as a liability since it does not give Congress the information it needs to take action. The future of our nation depends on getting this right.
With an honest and complete assessment, we can get good legislation like the Secure the Border Act signed into law, force strong executive actions from future presidents, and keep Americans safe. These policies will ensure our nation knows who is coming in, and what the impacts of that are to U.S. citizens. But we need the CBO and Washington to stop playing politics with vital information.
