LVEDC Q&A with U.S. Sen. Pat Toomey
By LVEDC Staff on August 6, 2013
Editor’s Note- Pat Toomey was elected to the United States Senate in November 2010 after defeating Democrat Joe Sestak. It is generally agreed upon that Sen. Toomey is one of the most conservative members of the legislative body and even the Republican Party as a whole, according to his senate voting record in a 2012 rating by the National Journal. Sen. Toomey serves on the Finance, Budget, Banking, Housing and Urban Affairs committeees and the Joint Economic Committee.
Your website notes: Senator Pat Toomey was elected to the U.S. Senate from Pennsylvania on a platform of limited government, economic and job growth, and restoring fiscal responsibility. How would you grade yourself in each of these initiatives – specifically economic and job growth?
Our country is not enjoying the robust economic growth that we could and should be having. We are witnessing the weakest economic recovery since the Great Depression. Washington’s continued fiscal irresponsibility and over-regulation are the principle reasons.
Our government spends 100 percent more now than it did a dozen years ago. Regrettably, for almost four years, Senate Majority Leader Harry Reid (D-NV.) refused to introduce a budget. What business would survive for four years without a budget? This is no way to run a government. It is certainly no way to reassure anxious business owners.
In the Senate, I have consistently advocated for common-sense solutions to grow our economy and create jobs in the Lehigh Valley.
To achieve these goals, sustainable fiscal policy is critical. It helps provide the sense of economic security that gives individuals and businesses the confidence they need to invest in America for the long term.
Regulations and the out-of-control agencies that implement them have a chilling effect on the economy. The president’s health care law is making a visit to the doctor more expensive. It also adds uncertainty as businesses and individuals try to make decisions about their lives and finances.
As I travel Pennsylvania, I hear the same thing from farmers, manufacturers, and job creators all across the commonwealth: Tell the government, particularly the Environmental Protection Agency (EPA), to stop breathing down our necks. Pennsylvanians care about our environment and support reasonable standards, but every day they struggle to keep their businesses running, provide for their families, and make payroll for their employees.
The EPA has a wide-ranging scope of authority over many sectors of the U.S. economy. From heavy manufacturers to family farms to small businesses struggling to get off the ground, these job creators have been bombarded by a deluge of new EPA regulations and mandates. It is time the agency take a more balanced approach and understand the economic impact of their heavy-handedness.
Dodd-Frank, a law that was supposed to reduce systemic risk to the financial system by overhauling its regulations, is actually reducing the amount of available capital thus increasing the cost of borrowing for consumers and job creators. Worse, Dodd-Frank has institutionalized too-big-to-fail with its “systemically important financial institutions” and created a safety net funded by taxpayers.
With a Republican minority in the Senate and President Obama in the White House, we unfortunately can’t repeal Dodd-Frank immediately. I’m actively engaging with regulators, however, helping to provide clarification to relieve the regulatory uncertainty that is dampening the economy. I will also continue working to rein in unnecessary and arbitrary regulations outside of Dodd-Frank. The best example of this is the JOBS Act which has streamlined the government and relieved burdens on small businesses so they can thrive as job creators. In the near future, I hope to introduce legislation that would allow for the orderly wind down of large financial institutions without putting taxpayer dollars at risk.
Republicans and Democrats can work together to achieve at least some of these goals and help grow our economy. Since I joined the Senate in 2011, we have made headway in passing legislation that will encourage growth and job creation. The bipartisan Jump-Start Our Businesses or “JOBS” Act contains three bills that I authored with my Democratic colleagues in the Senate to help small businesses acquire new sources of capital. I was very pleased when this bill passed both the House and Senate with overwhelmingly bipartisan majorities and was signed into law by President Obama in 2012.
At a time marked by partisan gridlock, the JOBS Act stands out as an example of bipartisan cooperation. When it comes to growing our economy and creating jobs, I am hopeful there will be more examples of this in Congress.
What tools can the federal government provide for Lehigh Valley Economic Development Corp. to better serve its mission of helping business grow, thrive and stay here in the Lehigh Valley? What tools would you like to see introduced?
Easing excessive, ill-conceived regulations and taxes would help our country everywhere and Pennsylvania in particular. One of the most egregious of these burdens has been the medical device tax in the president’s health care law.
Under this onerous tax, manufacturers of medical devices ranging from surgical tools to bed pans are required to pay a 2.3 percent excise tax that will raise nearly $30 billion in revenue over 10 years and hinder industry innovation, job creation, and the overall delivery of quality patient care.
Pennsylvania is the fourth-largest producer of medical devices in the country and home to 576 medical device companies. The industry provides more than 100,000 jobs among medical device companies, suppliers, and other supporting businesses.
The Lehigh Valley is home to some of these companies. B. Braun in Allentown is a major medical device company specializing in intravenous accessories and pain control. They employ 2,000 Pennsylvanians. Precision Medical in Northampton County has manufactured respiratory products and breathing equipment for 25 years. They employ almost 100 people. Medical device manufacturers such as these, big and small, and others like them across our state, face dire consequences from this new tax.
The chief financial officer of Boas Surgical, another medical device company in the Lehigh Valley specializing in pedorthic, orthotic, and prosthetic devices, explained it in chillingly stark terms: “Basically, if the tax goes through we will turn out the lights, lock the doors and go home and not be able to service patients anymore.”
It is unacceptable to me that the Lehigh Valley should lose these companies – and the jobs and services they provide – because of this tax. I joined a bipartisan group of senators, including Sen. Bob Casey, in sponsoring legislation to repeal the medical device tax. Our bill received overwhelming bipartisan support in the Senate, with a 79-20 vote. I will continue to work to ensure that this unacceptable tax is repealed in full.
Right here in Pennsylvania, we have the potential to create tens of thousands of additional jobs in the medical device industry and be a leader in the creation of life-saving technologies and products. With such bipartisan support, I hope we can abolish this harmful tax and allow Pennsylvania companies to grow and innovate.
Entrepreneurs and start-ups in the Lehigh Valley have many of the same challenges as their peers around the country. One area of concern for those businesses is accessing new sources of capital to facilitate growth. Can you tell us how creative approaches to funding growing companies will help create jobs in our region?
Over the last several years, the time needed for a business to grow large enough to go public has doubled. This is due, in part, to the growing list of expensive regulations created by the 2002 Sarbanes-Oxley law. As a result, fewer companies are choosing to go public, and the number of initial public offerings filed has decreased dramatically in the past decade.
The 2012 JOBS Act was written – and passed – to help entrepreneurs and start-ups meet and overcome this very challenge. I am proud to have written three sections of this act that have now become law.
I worked with members of both parties on this bill, which passed the U.S. House of Representatives and the Senate with overwhelming bipartisan support and which President Obama signed into law in 2012. It is geared toward helping our small and medium-sized businesses raise the capital they need to expand, develop new products and hire new workers.
The Small Company Capital Formation Act, which I authored with Sen. Jon Tester (D-Mont.), cuts regulatory burdens on small businesses and makes it easier for them to raise much-needed capital by issuing securities in small amounts without having to provide costly, audited financial statements and periodic reports.
I also wrote the Private Company Flexibility and Growth Act with Sen. Tom Carper (D-Del.) which raises the maximum number of shareholders from 500 to 2,000 for community banks and non-banks. It also exempts employees from this cap. This allows a company to offer stock to more of its employees so the average worker can benefit from the growth of the company.
Lastly, I authored the Reopening American Capital Markets to Emerging Growth Companies Act with Sen. Chuck Schumer (D-N.Y.). This law makes it easier for growing firms to go public by reducing the hurdles of an initial public offering by phasing in many of the costliest obligations over time.
Consider the case of Saladax Medical, a small but growing company in Bethlehem that manufactures tests for cancer and Alzheimer’s patients. Going public would allow Saladax to continue to grow, hire new workers, and develop more life-saving diagnostic tests. But the regulatory regime made it too expensive and time-consuming for Saladax and other companies to justify the process. The legislation that Sen. Schumer and I authored addresses this very problem.
I believe the JOBS Act will do much to grow the jobs our economy so desperately needs. Further, the process by which it was enacted, in which members of both parties worked together, serves as an excellent model moving forward.
You serve on the Finance, Budget, Banking, Housing and Urban Affairs, and the Joint Economic Committees – each committee touches on some facet of economic development. So, how can the LVEDC and your office develop and maintain a closer working relationship so we can help each other’s causes and stimulate the economy here in the Lehigh Valley?
As with any successful partnership – a government office, a business or a family – frequent and open communication is key. My staff and I work very hard to ensure that our lines of communication are open to the constituents and business owners we serve, as well as between my Allentown and Washington offices. My Lehigh Valley regional manager, Marta Gabriel, maintains a close working relationship with business leaders in the Lehigh Valley, and I am frequently in the area to meet with constituents and hear their concerns.
One way in which business leaders can help me and my staff is by identifying problems – instances of government overreach, regulation, and excessive taxation. I encourage you to reach out to my offices and report such cases. It is often the businessmen and women on the ground who bring these important issues to light.
I am very happy to call the Lehigh Valley my home. Kris and I are raising our three children here. I built my business here. I have experienced firsthand the warmth and character of its residents and I look forward to hearing from them on how to best make the Lehigh Valley and Pennsylvania a better place to live, work, and raise a family.
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