Cut Bank Pioneer Press: Q&A: Sen. Tester discusses inflation reduction
In response to a surge in inflation over the past year, Congress recently passed the Inflation Reduction Act (IRA). President Joe Biden signed the act into law on Aug. 16. The White House has said the package will address inflation in two key ways: by lowering energy and health care costs for families, and by helping to bring down the deficit.
Last week Montana’s lone Democratic member of Congress, Sen. Jon Tester, took time to discuss the landmark legislation. Today we publish Sen. Tester’s comments in a question-and-answer format. Sen. Tester’s remarks have been edited for brevity.
Question: Why is the Inflation Reduction Act necessary?
Sen. Tester: Well, a national debt that is pretty damn big. This puts about $300 billion into paying that down, which I think is serious. … Anything we can do to reduce (health care costs) is a net benefit to everybody, and this really does some tangible things to reduce costs, particularly in the area of prescription drugs. … Energy prices: all you have to do is go to the pump to fill up your car … and you know that some relief could be done there, and this really does benefit an all-above energy policy.
The bottom line is that it really does some meaningful things on issues that people around (Washington, D.C.) talk about all the time but don’t do anything about.
Q: How is the law being funded? Will the average taxpayer see an increase in taxes because of this?
A: No increase on individuals at any income level. No new taxes. This is going to be paid for by an enforcement of the current (tax code). … We’ve got, I believe, eight billion-dollar corporations that are paying zero taxes, and we’ve got a lot of folks out there that are in the million-dollar or billion-dollar range that, quite frankly, probably need some attention. The IRS doesn’t have the ability to go up against these companies because they just don’t have the manpower. This is really focused on the big guys that are doing operations and making billions and not paying taxes.
Editor’s note: Included in the IRA is an intention to hire thousands of new IRS agents to go after corporations.
Q: The IRA extends affordable health care subsidies through 2025. When were those subsidies set to expire?
A: I believe this fall. I think they were due to expire this fall, so time is of the essence. Look, we’re down to 8% of Americans who are not insured now in some manner or another. That’s a good sign because a healthy workforce, affordable health care, those kinds of things unfortunately are important. People don’t ever think they have to visit the doctor, but when you need them, you need them. And the older you get, the more often you need them.
Q: Are there special provisions for Indian reservations?
Q: There’s no carve-outs or special treatment for anybody. … which I think is good, because that means (everyone) can access the incentives equally.
Sen. Tester issued the following statement after the bill was signed into law:
“The Inflation Reduction Act is fully paid for legislation providing targeted resources that will:
Invest hundreds of billions of dollars to pay down America’s debt — the largest debt reduction in more than a decade. Paying down the debt will fight inflation, grow the economy, and provide economic certainty for future generations of Montanans.
It will lower costs for working families by:
• Allowing Medicare to use its purchasing power to negotiate drug prices, ensuring older Americans pay fairer prices for their prescription medication.
• Extending the affordable health care subsidies through 2025, preventing insurance premium hikes for thousands of Montanans.
• Capping out-of-pocket costs for prescription drugs for Medicare beneficiaries at $2,000 per year, beginning in 2024.
• Unleash American energy production, securing Montana’s energy future and making the United States less reliant on our adversaries like Russia and China, by:
• Expanding offshore oil and gas leasing in Alaska and the Gulf of Mexico.
• Ensuring that the Department of Interior continues offering oil and gas lease sales while developing renewable energy on public lands.
• Extending and expanding tax credits for investments in and the production of renewable energy as well as creating new credits that grow American manufacturing jobs.”
The IRA is not without its critics. On Aug. 6, 10 days before the act became law, Sen. Steve Daines, R-Mont., posted the following statement to his Twitter account: “As Montanans are struggling with raging inflation, Senate Democrats are in the process of trying to raise taxes and increase energy costs. Outrageous.”
The following day, Sen. Daines, again on Twitter, said the IRA would “Supersize the IRS to go after small businesses; raise energy costs for MT families; and increase taxes during a recession; and worsen inflation.”
While most economists have said they believe the law will greatly reduce inflation in the long term, there’s disagreement over what the effects will be in the first year or two.
The Committee for a Responsible Federal Budget, a nonpartisan, nonprofit organization committed to educating the public on issues with significant fiscal policy impact, issued a statement in defense of the law.
“Ultimately, we expect the IRA to very modestly reduce inflationary pressures in the near term while lowering the risk of persistent inflation over time and thus make it easier for the Federal Reserve to reduce inflation without causing a recession,” the statement reads.
“It is simply wrong-headed to raise taxes by hundreds of billions of dollars — including on the middle-class — just as many economists believe our nation has entered a recession,” states an Aug. 5 letter from U.S. Rep. Matt Rosendale, R-Mont., to Daines and Tester urging them to oppose the IRA.
“This bill targets natural resources that support thousands of Montana jobs and rural communities. The measure increases costs for oil and natural gas producers who operate on the federal lands and imposes taxes on coal producers. As gas prices continue to soar, we should be doing everything possible to unleash American energy production and reduce dependency on foreign sources, and this bill does just the opposite.”