RCP Interview With Sen. Pat Toomey

RCP Interview With Sen. Pat Toomey

By RealClearPolitics - June 23, 2011

RealClearPolitics sat down with Pennsylvania Sen. Pat Toomey during his visit to Chicago for a Family-PAC Federal breakfast on June 17 to discuss the challenges facing the U.S. economy as well as the NATO intervention in Libya.

RCP: There are several obstacles to growth in the U.S. economy, but many have singled out ObamaCare. Do you think it ought to be repealed? If so, what are your alternatives to health care reform?

Toomey: I think it has to be repealed. This bill is a disaster for health care, but it's also a huge problem for the economy in general. The fact is it is causing health insurance premiums to rise more rapidly than they otherwise would. There's no mystery about this: if you impose mandates and insist on expanding coverage, there's no free lunch and it's going to cost. And it is costing. That makes it more expensive to hire workers; and when its more expensive to hire workers, guess what? You have fewer workers hired. So, it's clearly costing us jobs right now. It's clearly costing us economic growth. It's about to have an absolutely staggering impact on our budget. If you look back at how the CBO scored ObamaCare when they were first scoring it, they made an assumption that's really ridiculous and it's going to be proven ridiculous. That assumption is that very few employers will drop coverage and dump their workers off onto the government-run exchange. Because they assumed very few workers would be in this category, they assumed very low cost to the government because this is the category of workers that would be heavily subsidized by the government. Well, in reality it's going to be a staggering number of people. So, this is going to have devastating budget implications. It's already costing us job growth. It's going to diminish people's control over their own health care. It's got the federal government explicitly setting up a panel to really ration care and decide which services will be permissible and which won't. So, on so many levels this will be devastating for health care and very problematic for economic growth. I feel very strongly that it's got to be repealed.

RCP: If you were president, what would you do to get the U.S. economy back on track?

Toomey: Well, there's several categories. First thing that I think we need to do is put the federal government on a sustainable fiscal path, which we are not on now. That means significant cuts in discretionary spending right now. It means changes to the big entitlement programs. I introduced a budget resolution that would block-grant Medicaid to the states, lower the Medicaid expenditures gradually to the levels they were at in 2007 and then let them grow at the medical inflation rate -- we have to demonstrate that we can get that under control. On the tax front, I certainly would strongly oppose raising the tax rates, which is what's coming in store for us if we don't have any kind of legislation for the end of 2012. What I would rather do is simplify the code and lower rates. We could generate more revenue for the government with a system where we eliminated many of the loopholes, write-offs, credits, simplified the code, lowered marginal rates, and I called for that in my budget as a House Republican. It would be extremely pro-growth to lower the top marginal rate, to simplify the code, and I would certainly do that. Another big piece of this is to rein in the regulations that are out of control. ObamaCare is one example that we talked about -- it's absolutely costing us job growth right now. The EPA is another example. What they are doing to the cost of energy, agriculture and industrial America -- it's a huge problem. Dodd-Frank [Wall Street Reform Act] is going to make credit less available for small businesses.

RCP: Do you think Dodd-Frank ought to be repealed?

Toomey: Yes, absolutely. I think Dodd-Frank actually probably increases the risk of failure of the large financial institutions. I think it's enormously expensive and complicated. It's going to drive big and complex financial institutions to go offshore, overseas and run their business out of Europe or Asia. And the cost of compliance is going to be so onerous for the very small banks, which provide a huge, important amount of credit for small business, that I think they're going to be forced to consolidate. I have some experience with this. I helped launch a small bank in 2005 and I was a co-chairman of the board, so I have first-hand experience in growing a small bank. Community banks have less than a billion dollars in assets, they represent only about 10 or 11 percent of total assets among the banking sector, but it's 40 percent of all small business loans. So, if this category can't survive, which I'm worried that they won't be able to, then access to credit for small, entrepreneurial businesses -- the lifeblood of our economy, the guys who are hiring and creating jobs -- it's going to be a real big squeeze on them.

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