By Matt Hughes
Republican U.S. Senate candidate Pat Toomey and his opponent, U.S. Rep. Joe Sestak, stand opposed on nearly all major political platforms.
The one thing they can agree on, it seems, is that the U.S. economy is in bad shape.
Toomey on Thursday told The Times Leader's endorsement board that the state of the nation's economy is "somewhere between bad and terrible."
"We're dramatically underperforming, in terms of where the economy traditionally has been at this point in a cycle after a bad recession," Toomey said.
"Economic growth is very, very feeble. Job creation has been non-existent."
To foster economic growth, Toomey favors making the Bush tax cuts permanent, lowering the capital gains tax rate and lowering the top corporate tax rate from 35 to 25 percent.
"We have the second-highest top marginal business tax rate in the entire industrialized world that puts us at a competitive disadvantage," Toomey said. "It creates an incentive for multinational corporations, especially, to headquarter somewhere else, so that they'll pay less in taxes When nearly all our competitors have lower tax rates than we do, we're asking for trouble, and we're going to lose jobs."
Toomey also said, however, that the Troubled Asset Relief Program, or TARP, which authorized the U.S. Treasury to purchase or insure up to $700 billion in "trouble assets" in order to stave off a new depression, was unnecessary.
"It was sold as a measure that was going to buy up the toxic assets from bank balance sheets," Toomey said. "They never did do that. What they did instead was they injected this money into a lot of big banks including banks that had no need and no interest in taking that capital, but they forced it on them anyway.
What the whole thing revealed was that we didn't have an adequate resolution measure for the failure of a large financial institution."
Toomey said that the Federal Reserves case-by-case handling of the failures of financial institutions created a "chilling atmosphere" for business because nobody knew what would happen next.
"My proposed solution is to make amendments to the bankruptcy code," Toomey said, "so that we can know in advance exactly how we would resolve the failure of a big financial institution in a rules-based, legally-defined process."
To solve unemployment woes in Pennsylvania, Toomey said he would be a champion in Washington for the expansion of the life sciences sector, including the pharmaceutical and medical equipment industries, in the state.
"Pennsylvania is one of the leading states in America and America is the leading country in the world in this field," Toomey said. "It's an example of an industry that I'm very, very bullish on, and with the right policies in Washington it could be a great opportunity for growth in Pennsylvania."
Toomey added, however, that a medical device tax inserted in the health care reform legislation passed by Congress this year would have a detriment on the industry.
Toomey favors repealing the 2010 health care reform legislation, which he calls "fundamentally the wrong approach," and replacing it with scaled-back reforms targeted at those with debilitating pre-existing conditions and legal tort reform.
Toomey also said expansion of Marcellus Shale drilling could create up to 250,000 blue and white collar jobs in the oil and gas drilling and ancillary industries over the next ten years.
Toomey also favors reform of Social Security, though he said he would not characterize the reforms he proposes as "privatization" of the system.
"What I've said is, let's give young workers a choice," Toomey said. "Those who want to participate in the current program as is, that's fine. But those who would like to, I would suggest that we give them a choice of taking a portion of the payroll taxes that they would otherwise pay and allow them to accumulate savings."
Toomey said Social Security has often been mischaracterized as a savings plan, when in fact it has always been a pay-as-you-go system which will eventually reach a critical mass of sustainability due to demographic changes. Under his system, savings accumulated could be placed in higher risk/return investments like stocks for younger workers, but diverted into more stable accounts like savings, CDs and treasuries.
"I think people who do that are probably going to end up doing much better than people who don't," Toomey said, stressing that Americans approaching retirement age would not see changes in the amount of Social Security they were promised.