Washington — Sen. Pat Toomey, a Republican from Pennsylvania, criticized a new climate, health care and tax package unveiled by Senate Majority Leader Chuck Schumer and Democratic Sen. Joe Manchin of West Virginia last week, saying Sunday that Manchin was “taken to the cleaners” in the agreement.
In an interview with “Face the Nation,” Toomey pushed back on claims from Manchin and other Senate Democrats that their plan will lower historic inflation and reduce the deficit, saying the bill, called the Inflation Reduction Act, will do neither.
“I think he got taken to the cleaners. He’s agreeing to all this bad policy in return for which he’s been promised that there’s going to be some kind of pro-energy infrastructure bills sometime in the future,” Toomey said. “But first of all, I thought we did that in the infrastructure bill. Secondly, what is the text? But most importantly, why isn’t that in this bill? And the answer is because Democrats don’t support it. And so, this is going to do a lot of harm and there’s not going to be a corresponding benefit.”
The legislation from Schumer and Manchin is the culmination of months of negotiations over President Biden’s sprawling domestic policy agenda. Talks over a spending plan came in fits and starts as Manchin raised concerns about new federal spending amid rising consumer prices, but he and Schumer ultimately had a breakthrough, resulting in the proposal unveiled Wednesday.
The legislation calls for $369 billion for new climate and energy security policies, allows Medicare to negotiate the price of prescription drugs, extends enhanced Affordable Care Act subsidies through 2025 and imposes a 15% corporate minimum tax on the nation’s largest corporations. Democrats also said the measure will reduce the deficit by $300 billion and will not affect American families who make less than $400,000 annually, maintaining a pledge from Mr. Biden not to raise taxes on those taxpayers.
The president has thrown his support behind the package even though it leaves out many of the key policies in his social spending plan, and he encouraged Congress last week to send the measure to his desk.
Republicans, though, assert Democrats are using budget gimmicks to account for the spending on the enhanced Obamacare subsidies while claiming the package lowers the deficit.
Toomey said extending the subsidies through 2025 has an “obvious political payoff” for Democrats, who he said have “no intention” of ever ending the premium subsides over a 10-year window. The boosted benefits were included in the $1.9 trillion COVID-19 relief bill enacted last year and are set to lapse at the end of the year.
“They’re also counting huge amounts of additional tax revenue from giving more taxes, money to the IRS, which the CBO does not agree with,” the Pennsylvania Republican said. “They’re also not taking into account how much our economy will slow down from this big corporate tax increase that will mostly hurt manufacturing and domestic investment. These numbers are very, very dubious.”
Toomey also refuted Manchin’s characterization of the tax proposals included in Democrats’ package as closing tax loopholes that have benefited large corporations raking in significant profits.
“Look at, what is the source of this tax increase?” he said. “It’s very simple. When we made our tax reform in 2017, what we did is we said if a business takes its profit, and invests it back in its business in the form of capital investment, new equipment, new plant, expanding their capacity, then, we said, you’d be able to deduct the cost of that in the year in which you incur the cost.”
Toomey continued: “The Democrats are saying we got to bring that to an end, despite the huge surge in capital expenditure that it brought us. And instead, they’re going to say, you only get to recognize a small fraction of that. They’re going to raise the cost of investing in a business.”
