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Steve Goldstein: Arizona Republican Congressman David Schweikert represents Arizona's 6th Congressional District, which covers the northeastern part of the Phoenix metro area. The Congressman joins me to talk about hot congressional issues, such as problems with the website to register for health insurance under the Affordable Care Act. Welcome Congressman, good to have you here.
David Schweikert: This is always my idea of fun.
Steve Goldstein: Let's talk about Healthcare.gov. What do you think of the problems? I know you're not a fan of Obamacare, the Affordable Care Act.
David Schweikert: I'm one of those who takes a slightly different philosophical view. I assume the technology will get fixed. But then we now need to deal with what's the underlying marketplace going to look like. What is happening to my access to private insurance, my choices in that option. So my fear is we're spending lots of time fixating on the website, because that's an immediate experience. What will my access to health coverage and my true choice and availability look like a year from now? And that's the real debate that really needs to go on.
Steve Goldstein: Considering Senator McCain is still talking about the fool's errand of House Republicans, the government shutdown, and its relation to overturning the Affordable Care Act, do you think there's a point in time where we'll have discussion on this? The President was in Dallas today talking about things, Kathleen Sebelius was again on Capitol Hill. At what stage do we reach a point where there will be negotiations, where the Republicans say, well the President's not going to, so we give up.
David Schweikert: No, but think about what’s happened, for folks who mocked the debates of will the Senate, will the Democrats negotiate with the Republicans -- remember, what was being fought over was should individuals be treated the same as big business and big labor. Should they have to have a mandatory purchase this year, or should that be postponed for the year. That's what the fight over most of the shutdown was about. And literally within 10 days after the government slowdown, refunding and all those things had come back, we're finding out some of our Democrat brothers and sisters are saying, maybe it wasn't such a bad idea, that idea of delaying the individual mandate. So it is sort of fascinating the way it makes the circle of you fight for a concept, get beaten up on it, and a little while later it becomes part of the common wisdom.
Steve Goldstein: Then, when we think about this idea of bipartisanship. We've talked about this before, is it really there? When we look at it as outsiders it seems the bitterness is so pungent --
David Schweikert: And this does sort of touch on a conversation I've had once before. My great fear is do these sorts of fights become the new normal. There's such a battle for shrinking resources. As mandatory spending continues to grow and grow, this year it will be 67 percent of all spending, Medicaid, Medicare, and Social Security. In just a couple years it’s 75 percent. A couple years after that it starts to approach 80 percent. As mandatory spending, as the entitlements consume every next incremental dollar there will be this constant battle of who gets the remaining crumbs on the table. I fear that's what you're seeing right now, the battle over the resources.
Steve Goldstein: But you're a numbers guy and you understand the numbers.
David Schweikert: Uh-huh.
Steve Goldstein: Do people higher up in leadership on both sides, don't know the numbers, they don't want to talk about the numbers?
David Schweikert: It's the sin of politics and then the sin of man. Politics is immediate, what's great on "Horizon" tonight, what gets in the newspaper story, what spikes the base. When you sit in front of an audience and say we need to do this in Medicare to keep it actuarially sound, people stare at you and think you’re really boring. The reality is that's the 10-thousand-pound gorilla in the room. If we don't make changes in our mechanics in Medicare, it'll consume every last incremental dollar in the future. If we continue to postpone big decisions, the fighting becomes the new normal.
Steve Goldstein: At what point does the political hot potato become something that realistically will be dealt with?
David Schweikert: It becomes dealt with, I believe when either the left or right can no longer use it as a political wedge. That I thought would be one of the great stories out of the 2012 presidential race. When we saw the final polling, Medicare and scaring people over it, using it as a whipping boy didn't really move voters like it had in past elections. Are we seeing a time where the voting public is actually a hell of a lot smarter right now than a lot of the political class? And the political class now needs to catch up with the population who understands, we need to do something big, we need the President to show up and provide leadership, and those of us in Congress need to be willing to, when the hand is reached out, to grab it.
Steve Goldstein: One issue was supposed to be a biggie, and that was immigration reform. How do House Republicans see this issue?
David Schweikert: I don't know if I can speak for all House Republicans, but some of the ones we've been working with and those from the southwest, where we take it very seriously, see a path where you can have discussion, maybe even work through the very, very detailed drafting that has to be done incrementally. But one of my great frustrations is, think about this, the House three or four times over the last couple years have passed the STEM, high tech, high skilled visas, and they have gone over to the Senate and disappeared. Is this just another occasion where it's really good politics if you're on the left, and why would they want to work with us as we do the incremental pieces of legislation so we can get the details right. My fear once again is I see lots of folks who will come in and say, we'll support the Gang of Eight bill. And then you pull it out, and it's about that big, and they say, do you actually know what's in it? And they have no concept. It's one thing to be in love with the concept. It's another thing to deal with the devil in the details and the drafting and how it really works. That's where we’re at is how do you get the details correct.
Steve Goldstein: As a number guys though many people would point to immigration reform as an economic issue. If in fact we know who's here, we know where they are working, that will help us in the economy. Do you believe that?
David Schweikert: It's more than that. It's dramatically bigger than that. The real fight in D.C. over immigration is something you almost never hear talked about even on a set like that. It's whatever we pass today will probably be with us for another quarter century. What will our immigration system look like over that time? Will it be more like Great Britain, Canada, New Zealand and Australia where they use sort of a point system, saying we're looking for mechanical engineers or Canada had something I believe where they were desperate for nurse practitioners. They use a point scoring system. Part of that is they are trying to maximize economic growth, at the same time being open to immigration. How do you bring in populations that also help the economic growth? It goes back to what we were talking about before. If it's true that our country now is going to be flat-lined to run two percent GDP growth -- that's what congressional folks are saying, we will have these fights over resources -- if you're going to deal with immigration, do you deal with it in a way that maximizes economic growth? Let's take care of what annoys us today, what's difficult today, but what we're doing will be with us for a quarter century.
Steve Goldstein: Two percent GDP is a pretty scary number.
David Schweikert: It's horrific. If you look at the actual data, it's devastating because just the incremental growth in entitlements with baby boomers retiring creates just an absolute war over remaining resources. My great hope -- and that's actually why people like me have fixated on things like their jobs. The items of policy or tax reform, how do you have policies that can be bipartisan but grow the economy? Because unless you have that economic growth, the future is pretty scary. On the flip side, if you have the economic growth, there's a pretty shiny light at the end of that tunnel.
Steve Goldstein: So who or what do you blame for the fact that two percent coming out of a deep recession -- we're not used to two percent of growth out of a deep recession.
David Schweikert: No, this is not like the others. We're out of the recession, we've hit this sort of stagnant growth. Has there ever been a time like this where the regulatory burden has grown the way it has. The tax burden has actually increased in this last year. A lot of the mechanics that would be typically embraced to sort of goose an economy along haven't been engaged in. We saw things like cash for clunkers, first-time home buyers credit, stimulus, a lot of those had short-term spikes but actually just created deferred consumption. So I got the spike, but its future actually turned out to be somewhat negative. So we need to sort of rethink, can you do something that stays with you year after year after year. That's where tax reform and regulatory reform, even from my view of the world, much more competition and choice in the health care system, those things maximize economic velocity.
Steve Goldstein: Republican members of Congress hate when I do this. I probably shouldn't, because it's more than four years ago. The Bush administration had horrible times with this economy, too. Was there something fundamentally changing even a decade ago with this economy that’s going to be hard to recover, regardless of who's in the White House?
David Schweikert: I've actually thought a lot about this. My fear is a lot of us don't truly understand how woven government policy is in even things you consider free market. Think of someone who has bought all the books about the crash and read literally everyone's analysis. There's a common theme, if we stepped back years ago, things we did in the Community Reinvestment Act that were well-meaning created markets for toxic paper. So in many ways just that, and there's dozens of these sorts of examples out there. What was well-meaning government policy created a cascade of unintended consequences.
Steve Goldstein: Seems like we're running into unintended consequences quite a bit, when it comes to government action.
David Schweikert: There's also an opportunity to embrace and understand that. There's things you can do in banking regulations that would make the banks more robust. But yet dramatically cut the regulatory costs by just changing, say, why don't you hold 15 percent equity capital. If you do that we'll make it so you only have one major audit a year instead of dozens and dozens and dozens. There are ideas out there that I think the right and left can embrace, that stop this sort of fragility we seem to have woven into our economy, because of government action.
Steve Goldstein: How much of a disconnect is there between the regular economy, the jobs economy, and the Dow doing so well, for example?
David Schweikert: That I see substantially as a function of the chase for a rate of return. If you're literally in a zero interest rate world, and I know we weren't going to talk about monetary policy, but one day that would be a fun show. Where do you put your money? And if the Dow -- if stocks look like they are producing a rate of return, you're going to take your zero rate of return cash and put it there. What happens when we start to go through a normalization of interest rates? It's a tremendous threat to government finances, because today our interest coverage is only one third what normal interest rates would be. People don't understand, our interest burden if we were back to normal would be almost every dollar of discretionary spending. On the flip side, how much would come back out of equity and into fixed income because of the rate of return. I always resnt when people look at the stock market and say well, government policy -- you guys voted on something and the market went up or down. Sorry, that linkage is a little more ethereal than that.
Steve Goldstein: One issue that has very little to do with money but is very close to your heart is the issue of valley fever, which seems to really hit Arizona and Bakersfield, California. Those seem to be the places. Tell us about the legislation.
David Schweikert: One of the things I have a personal fixation on is for those of us in the southwest, remember, there's only really four counties in the United States that have valley fever and three of them are here in Arizona. We need to have a voice because you get back east and say, we have a valley fever problem out here and they stare at you and say what's that. There's Doctor Galgiani at U of A who's done some amazing work. There are alternatives, but today your only treatment really is a drug called fluconazole. There are next-generation drugs if we can get the CDC and others to step up and provide the compounds so they can be tested. Even Dr. Galgiani has been working on some ideas and may be closer than I originally hoped to something that might be a prophylactic, a vaccine. The Congressman from Bakersfield who’s majority whip, and a number of us, bipartisan, have come together from the Southwest and are trying to get the folks in D.C. and in the bureaucracy to pay attention to a disease that's unique to us. How do we deal with this fungi? I think we're making some progress.
Steve Goldstein: A few years ago, I had the chance to talk to Dr. Einstein, the cousin of Albert Einstein, who lived in Bakersfield and was one of the foremost people in this field of valley fever. He said he hated to say this, but in order to get more attention to valley fever it would be nice if someone really famous got it and went out and started doing ads for it.
David Schweikert: We've had some of that happen. We've had the baseball pitcher that didn't know what he had and didn't know what he had, and it literally wasn't diagnosed until much later. That's one of the fears. If 70 percent of cases are here in our community. Most people, if you've lived here a long time, you've had valley fever. I'm a severe asthmatic, I have scarring on my lungs; we always assumed it was from valley fever. Even my canine is getting the fluconazole pills right about now. It affects our community. There is hope, there are ways to deal with it and fix it. But we need public awareness, awareness in the medical community, that someone comes in with pneumonia-like symptoms, it needs to be looked at. We need to push for a regulatory body, a better way to diagnose, something fast and quick to know, yes, you may have valley fever, we're seeing it on the skin test, now what do we do. We've had amazing progress in the last six months and this is just one of those personal fixations we will keep working on.
Steve Goldstein: Is the rest of the Arizona delegation on board?
David Schweikert: Everyone in Arizona has been really good about this. This is just one I have a long personal history with family and friends. I had the experience of meeting a young man who literally had his spine literally dissolved. It was stunning. it would rip your heart out. A young man who had been a very robust construction worker in Mesa, and today his spine is held together by metal and it was actually from valley fever. There are extreme cases, and when you understand they are out there, how can you not be passionate about trying to find a cure.
Steve Goldstein: Again, bipartisanship always comes up, you and I talked about political theater before. How much of that is political theater? How much of that is people really at each other’s throats?
David Schweikert: You mean in D.C.?
Steve Goldstein: Uh-huh.
David Schweikert: A lot of it actually is theater because we all get our news in these little clips on television. But you would be stunned, even during the government slowdown, how much discussion was going on in the back room saying you do realize we wish the President would talk about entitlements also, but he won't even talk to us. That was one of my Democrat friends sharing. Sometimes there’s a lot more concession. We call it the elevator conversation that never makes the nightly news.
Steve Goldstein: Thank you very much.
David Schweikert: Enjoyed it.