David Schweikert
Chairman of the Joint Economic CommitteeRepresentative of Arizona's First Congressional District
Read the full Republican section of the 2026 Joint Economic Report >
My view is that the country’s most pressing problems and their optimal solutions can be consolidated into a framework I call a Unified Theory for Fiscal Solvency. The Committee’s staff economists and I have developed a framework for what policymakers must confront, how we got here, and what must be done. Congress can make meaningful changes to the nation’s current trajectory in two primary ways. One, tackle the core problem directly, not just how to finance it. Two, unleash creative destruction and renewal in the economy by legalizing innovation and fostering generational gains in productivity. The Republican section of the 2026 Joint Economic Report delivers its findings and recommendations in five chapters.
Chapter 1, “The Intergenerational Imbalance and Growing Dependence on a Shrinking Workforce,” observes that the Federal government’s central focus has shifted from national security and infrastructure to transfers of money from some individuals to others. Spending programs are built on the demographics of the past, and they continue to transfer dollars from the dwindling number of younger people to the growing number of older people. We find that almost three out of every five dollars transferred to individuals already ultimately go to the elderly, and future trends are almost certain to be increasingly problematic. Raising taxes only deepens this imbalance, whereas growing the economy and the tax base offers some potential for correcting course.
Chapter 2, “An Update on Federal Healthcare Policy,” assesses the role of healthcare spending in driving fiscal deficits. Last fiscal year, the Federal government spent nearly $2 trillion on healthcare, making up over 28 percent of all spending. At the turn of the century, that figure was less than 20 percent, indicating healthcare is not only costing us more dollars but also clawing into a greater share of all Federal spending. Over that same period, personal health expenditures have increased by over 220 percent, straining Americans’ wallets and showing that many Federal policies have not been working to lower costs. These policies have distorted market incentives and led to tremendous windfall for brokers and other intermediaries. Innovation remains the key to solving these problems.
Chapter 3, “The Fiscal and Economic Health of Medicare,” explores Medicare in more detail and focuses on the Medicare Advantage program in particular. As a massive share of the U.S. population moves above retirement age, Medicare is in trouble. One trust fund on which the program relies is set to become insolvent within a decade, and the other is reliant on taxpayer transfers, meaning the U.S.’s aging is directly at odds with the program’s financial sustainability under its current design. These problems form a trilemma between three goals: affordability for seniors, fiscal solvency, and medical innovation. While policy currently makes these goals mutually incompatible, reforming Medicare Advantage by using new technologies to drive down costs would facilitate achievement of all three. Unleashing market forces can set right a program that is currently held captive by a bleak demographic situation.
Chapter 4, “Driving Production Through Human Capital and Innovation,” analyzes the role of the labor force in driving future economic growth. A large and healthy labor force is critical to grow the economy and reduce the national debt, but nearly two decades below the replacement-level fertility rate have stalled population growth and complicated the math. […] In many ways, current policies are not fit for this purpose and impose unnecessary and excessive opportunity costs. Instead, a points-based system would allow the U.S. to better position itself to win the global competition for talent and ensure those granted entry to the country complement Americans in the workforce. At the same time, unprecedented advancements in technologies like artificial intelligence will make the workforce more productive. Taken together, the labor force of the future will meet American needs and drive growth to help correct the nation’s fiscal situation.
Chapter 5, “Putting Innovation at the Center of Pro-Growth Tax Policy,” details how we can build a tax code that maximizes productivity and innovation to solve the core problem. While last year’s tax reconciliation bill made meaningful progress, more must be done to ensure the market is unshackled by government. The Federal government must ensure its tax policies harness the strengths of the market and reward ingenuity, not incumbents. For example, a border tax adjustment could achieve many of the same goals as tariffs do, but through a more growth-oriented framework.