Mississippi’s junior U.S. Senator, Republican Cindy Hyde-Smith of Brook-haven, brought a message of Republican red meat home to Southwest Mississippi on Tuesday.
Speaking to the McComb Lions Club, she decried the likely passage later this week of Democrats’ Inflation Reduction Act, which over the weekend survived a “vote-a-rama” in the Senate largely intact and now goes to the U.S. House for final passage.
“I wish I had a better presentation,” Hyde-Smith told the Lions and guests. “The Congressional Budget Office tells us what a bill will do, how much money it will save or if it will save money, and the CBO assured us this bill will make things worse.
“We have 9.1% inflation, the highest it’s been in 40 years. It’s terrifying to think that we’re going to compound that.”
A letter from CBO Director Phillip L. Swagel to U.S. Sen. Lindsey Graham of South Carolina, posted on the CBO’s website, said the bill’s effect would be negligible in this calendar year and could have a 0.1% worsening to 0.1% improvement in inflation during the next calendar year.
It said enhanced health care subsidies related to the Affordable Care Act could create inflationary pressure, while a new 15% alternative minimum tax on corporations could help to lower inflation.
Before the vote-a-rama, Democrats estimated $739 billion in new revenue from the corporate tax, prescription drug pricing reform, greater tax enforcement and elimination of a “loophole” on taxes for carried interest on investments.
The carried-interest provision and some drug pricing reforms, such as a cap of $35 for insulin, did not survive to the final version of the bill that passed the Senate.
Democrats also project $433 billion in spending, including $369 billion for clean energy and “energy security,” and $64 billion for extended subsidies for insurance coverage under the ACA.
The party calls the difference in spending and new revenue a deficit reduction of more than $300 billion.
The Center for a Responsible Federal Budget, which calls itself a “nonpartisan, nonprofit organization committed to educating the public on issues with significant fiscal policy impact,” largely agrees with the Democrats’ figures.
Hyde-Smith called the bill “full of radical policies,” such as a $7,500 tax credit for buying an electric vehicle, which she said would be required to be manufactured by a unionized workforce; and an increase of 87,000 Internal Revenue Service agents to conduct audits and prevent tax evasion.
“That’s more employees than the Pentagon, Social Security, the FBI and the border patrol combined,” she said. “That’s not customer service. These are investigators with arrest authority.
“The IRS answered 10 percent of its calls seeking help, and they’re still working from home (since the COVID-19 pandemic hit) ... This is going to cost jobs and raise everybody’s taxes. We’re in a recession, and virtually all wage classes will get a tax increase.”
The information Democrats posted about the bill says there are no taxes in the bill on families with an income of less than $400,000 — other reports dispute that — and no new taxes on small businesses, with the changes made by the bill closing loopholes and enforcing the tax code.
The CRFB analysis, based on the CBO scoring, says the bill would eventually cut net taxes by about $2 billion per year, with tax credits offsetting some of the tax increases.
While two quarters of economic contraction are generally considered to signal a recession, the call of whether a recession is occurring is usually made by the nonprofit and nonpartisan National Bureau for Economic Research, which has not announced a determination.
While economic growth has slowed, economists have pointed recently to contradictory indicators against recession, like the strong job market, which featured 3.5% unemployment after the July jobs report showed more than 500,000 jobs added in June.
Hyde-Smith also railed against high gas prices, which have declined by more than a dollar in the past two months but remain higher than at the beginning of President Joe Biden’s administration.
Many Republicans point to even lower gas prices near the end of former President Donald Trump’s term, which were caused by COVID-19 lockdowns that prevented many people from going to work, shopping, attending church or other events, which caused demand to plunge.
The senator claimed the bill would tax “every barrel of oil” coming into the country. In a moment of confusion, she said Treasury Secretary Janet Yellen told her at a breakfast that “the only reason gas prices are up is because Russia invaded Afghanistan.”
Russia invaded Ukraine in March of this year. Russia invaded Afghanistan in 1979.
Hyde-Smith said she voted in favor of retaining a $35 cap on the price of insulin in the bill, a vote that needed 60 votes to pass and failed 57-43.
“There is no reason for insulin to cost what it costs,” she said. “That is my next quest. It should cost 99 cents.”
She said she had succeeded in getting a generic substitute for the dry-eye medicine Restasis eligible for Medicare patients after picking up a prescription for her mother and paying $459 for a small bottle.
“I blew up my receipt and took it on the Senate floor, and I wore out the FDA on live C-SPAN,” Hyde-Smith said. “Rand Paul, the eye doctor (and senator from Kentucky), said if we’d gone to the vet, it would have been $8.”
The senator also addressed the recent school shooting in Uvalde, Texas, which aroused indignation and ever louder calls for tougher gun laws.
She said she decided to meet with Luke Woodham, who killed and injured a number of students at Pearl High School in October 1997, at a Leake County prison facility and ask why he did what he did.
She said he described a life with largely absent parents in which he was groomed into a Satanic cult and convinced to go on a shooting spree.
“Mommies and daddies need to be mommies and daddies,” Hyde-Smith said. “We need to do what it takes to find solutions to the problems in this country.”
