Democrats' health and climate deal 'may be disinflationary by causing a recession,' Sen. Cassidy argues

Kelly Livingston, ABC News

(WASHINGTON) — As Senate Democrats push a major economic, health and environmental proposal, “much of what they’re saying about this bill is just not true,” Sen. Bill Cassidy, R-La., contended on Sunday.

“It may be disinflationary by causing a recession,” Cassidy told ABC “This Week” co-anchor Jonathan Karl. “They’re interjecting an incredible amount of uncertainty into the economy. … I think this is going to lead to a worse recession.”

The Inflation Reduction Act was announced Wednesday after months of negotiations between Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.Va. The bill would pay down about $300 billion from the national debt and invest about $370 billion in energy and climate programs over the next 10 years, the lawmakers said, with revenue raised from increasing corporate taxes and enhancing IRS enforcement.

The legislation would also lower some prescription drug prices by allowing Medicare to negotiate and expand federal health care subsidies.

On “This Week,” Cassidy took another view of the proposal.

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“They are raising taxes. According to [Congress’] Joint Committee on Taxation, taxes will be raised almost $17 billion in the first year on those who are making less than $200,000,” he said, citing an analysis that Democrats say excludes cost-saving measures, like those on prescription drugs. In an earlier interview on “This Week” Sunday, Manchin insisted there is “not a tax increase” in his bill.

Karl noted that just prior to that package’s announcement, legislation to boost domestic production of crucial computer chips passed through the Senate with 17 Republican votes — including Cassidy.

Republican Sen. John Kennedy, who represents Louisiana along with Cassidy, claimed this was a slight on the GOP lawmakers who backed the chip bill thinking Democrats’ spending proposal was dead, telling Politico, “Looks to me like we got rinky-doo’d.”

“Is he right?” Karl pressed. “Did you guys get hood-winked by Joe Manchin and Chuck Schumer?”

“Schumer pulled a fast one on the American people,” Cassidy countered.

But he stood by supporting the bill, which spends some $52 billion out of an overall $280 billion to promote semiconductor production, arguing the ability to manufacture the chips domestically is vital for U.S. interests; right now, China is an enormous exporter of the technology.

“This is all about national security,” Cassidy said. “I’m a China hawk. If you’re comfortable with China … this bill, maybe you don’t vote for. If you’re a China hawk like I am, if you’re about national security, by golly you support this bill.”

GOP senators also came under fire from advocates last week after changing course on a bill to help veterans who were exposed to toxic “burn pits” during their service.

Comedian Jon Stewart, who appeared on “This Week” on Sunday in a separate interview, has been strongly lobbying for the bill’s passage, telling Karl that “nothing changed” in the text between votes in June and July — but Republican senators changed their votes.

Karl questioned Cassidy about the switch. Cassidy maintained that it was a temporary, bureaucratic delay and blamed Democrats.

“The bill will pass, and I strongly support it. We have to stand by our veterans who have been exposed to these chemicals. There was a drafting error,” he said. “A $400 billion drafting error that Democrats promised Republicans would get a vote on an amendment to fix.”

He was referring to what conservatives called an effort to free up existing funds already being used for veterans by shuffling the money inside the budget to use for unrelated purposes.

“But, to be clear, you did vote for it in its current form in the Senate,” Karl pressed.

“Yes, and I’ll vote for its final passage, too,” Cassidy said.

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