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Sen. Tester: The Inflation Reduction Act doesn’t ‘pick winners or losers’

Sen. Jon Tester (D-MT) joins Yahoo Finance Live to discuss the Inflation Reduction Act, the CHIPS bill, Speaker Pelosi's visit to Taiwan, and more.

Video Transcript

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- House Speaker Nancy Pelosi landing in Taiwan earlier today despite warnings from the White House and stern criticism and threats of countermeasures from the Chinese government. Joining us now to discuss this and the latest out of Washington is senator Jon Tester of Montana and Yahoo finance's Anjalee Khemlani. Senator, it's great to see you.

I want to start with an op ed that Pelosi wrote and-- Senator Nancy Pelosi wrote in "The Washington Post" today justifying the trip. And she said, quote, "We cannot stand by as the CCP proceeds to threaten Taiwan and democracy itself. Indeed, we take this trip at a time when the world faces a choice between autocracy and democracy."

Now, Senator Tester, a number of members of congress have visited in the past ahead of Speaker Pelosi. Biden, though, the Biden administration was very fearful and didn't want to endorse this trip. What's your reaction to her actually taking the trip? And do you think the Biden administration needs to have a tougher stance when it comes to China?

JON TESTER: So, first of all, I think that the speaker is the speaker and she will do what she wants as far as travel goes. I think most people in the United States would agree with the statement about this is about democracy. And all the time I was growing up, I learned about Taiwan and Formosa and the fact that these were allies, this country was an ally of the United States and continues to be.

But look, you're dealing with a superpower in China that could potentially do some provocative things. And then we'd have to respond. So it has a potential to escalate.

What I think the speaker's already done is probably had some people give her some analysis on what the threat could be with her moving-- visiting Taiwan. But she's been there for, what, about four hours now? And so far so good. And I do think it does send a solid message that the United States is still in the business of democracy, which I think is important.

- It sends a bit of a message of lack of coordination and communication between the speaker of the House and the administration. It was strange on that note. But Tom Friedman writes in "The New York Times," Senator, this morning, that this trip by Pelosi is "utterly reckless, dangerous, and irresponsible."

Senator Bob Menendez was there four months ago. A House congressional delegation was there less than a year ago. Do you agree with that characterization that it's reckless and dangerous?

JON TESTER: Well, look, I think it comes with some dangers. But on the other side of the coin, it comes with our ability to help promote democracy around the world. Look, if this things ends up going bad, people will look back and say this is a horrible thing to do.

But in the end, you're right. There's been a lot of other folks that have that have traveled to Taiwan. There's been plenty of representatives from congress that go there. And I think the fact is that what makes Nancy, Speaker Pelosi different is she's third in line to the presidency. She's got a fair amount of stroke around this place.

But in the end, I think it's her call. She's made fully aware of the same classified briefings I get as chairman of the Defense Appropriations Committee. And she will do what she thinks is best. And I think that's what she's done.

- And we know that this is happening while the CHIPS Act is preparing to be signed by President Biden right now. We know that competition with China also at the forefront, and also potentially tariffs as a way to try and help with inflation in the US. What is your take on how this dynamic, you think, will impact the US economy?

JON TESTER: Well, I think it's going to be positive. The CHIPS Act will be very, very positive for the United States. I think it'll get more manufacturing, particularly in the area of chips, back onshore. I think that's really important. I think we're seeing a lot of production limitations due to our lack of availability of chips.

And I think this bill that was passed, if I had any negative sentiment towards it, is that it wasn't done a year and a half ago. The truth is this is a good bill. I think it's well thought out, certainly bipartisan in nature. And I'm glad the Senate passed it last week. And I look forward to getting it implemented, getting more manufacturing within our borders, and not have to depend upon other countries for critical supplies, like chips.

- Senator, I want to get your thoughts on the inflation reduction bill, the Wharton Model saying that it won't have an impact on inflation, the Biden administration saying the direct opposite. What's your view of this bill?

JON TESTER: So I've been really focused on the toxic exposure bill for the veterans. But I will tell you-- and I've got more work to do on the Inflation Reduction Act-- but there are some things in it that appeal to me that I think will result in a reduction of the inflation numbers. Number one, $300 billion pay down the national debt is significant. We haven't seen that kind of reduction in national debt since Clinton was in office, OK?

Second thing is since my days in the state legislature, which is over 20 years ago, I heard about we need to have Medicare to be able to negotiate drug prices. That's in this bill. That's really important.

There's areas in energy, and I can tell you that I farm in North Central Montana. Climate change is unequivocally real. But I don't think this bill picks winners and losers. It's going to increase production, both domestically in conventional resources and in renewable. And I think that's a positive.

And I think there's some other things. But like I said, I will delve into it more as soon as we get this toxic exposure bill done and be able to give you a firm Jon Tester's a yes or no, this is a nonstarter. But I think those three things alone, increased production in energy, negotiations for prescription drugs, and paying down the debt, are all antiinflationary measures. And I think they make sense. And I applaud that effort. Now we'll see what else is in it.

- And I think you mentioned there the PACT Act, which is getting money to veterans that have been exposed to these fire pits while serving our country. And look, Pat Toomey has taken a lot of incoming on this. All he is saying, as you know, is he doesn't want this to be annual automatic spending. He wants it in the discretionary category.

You called this an 11th hour act of cowardice. Doesn't the Department of Administration of Veteran Affairs already have the ability to cover these veterans that were exposed to fire pits? And why do you object to Toomey's one carve-out there?

JON TESTER: Well, because number one, he's claiming there's a $400 billion slush fund. There is not. Number two, Congress has control over all the appropriation spending. And I think Toomey, who is a good friend and he's smart as a whip, is going to be leaving this body and he wants to make future Congresses subject to his will.

Look, I think the Appropriations Committee takes the president's budget. We either pull money out of it or add money to it. And in the end, it's our call. Congress does that. That's our job.

And so I think the premise by which these amendments are put forward that we're probably going to get a vote on today-- at least I hope we do-- I think it's a flawed premise. And I think if we're going to move forward and take care of our veterans who have been exposed to toxins due to burn pits and Agent Orange and radiation, as this bill does, I think it's important we let the veterans know that they're not going to have to come back to Congress and fight every year.

And that's why it's important Congress does it and not the VA. Another administration, if the VA does it, could pull those benefits. If Congress does it, they're dependable. They're predictable. And the veteran knows they can depend upon them.

ANJALEE KHEMLANI: Senator, Anjalee here. We're really taking you across the spectrum of topics here, but not your sweet spot of food. I want to talk about, you mentioned the drug pricing. And I know there's a lot of focus on that and the impact to the pharmaceutical companies.

But another part of that conversation has been in the health-care space the impact of food, especially food and farming programs, farm-to-table, pharmacy prescriptions that recommend food for those who don't have access to it. And that's something that millions of dollars have been poured into over the years. And I know that you've talked about specifically the health of foods, and especially with hybrids coming into play.

So I'm going to bring that all together, specifically on the hybrid part of it. You yourself as a farmer know very well the impact of this. And you brought up at the FDA commissioner's hearing about the fact that we don't have studies and don't know the impact of these foods that we are recommending people get. So I just wonder, is there a void that can be filled with this, a bridge that can be-- a gap that can be bridged when it comes to this conversation?

JON TESTER: Absolutely there is. I'm one who believes that food is medicine and that if you eat good food, you've got a much more likely possibility of staying healthy. I raise a lot of wheat on my farm and we raise a lot of wheat in Montana. And wheat is the staff of life.

And if the new hybrid varieties-- and I'm not saying they do-- but if they don't have the same inflammation reduction qualities as the old turkey red that my grandfather raised, then we ought to fix it. What I'm really saying is it may. It may not. We don't do the testing to find out.

And I think it's really important, because hybridized wheat does a lot of good things for us, all right? It protects me from sawflies. You get an earlier harvest so it can help with drought. There's a lot of really positive things that hybridized wheat does.

But in the end, we need to make sure that this wheat is wheat that has been the staff of life from the beginning of mankind and will actually help make us healthier and not do something different. And so all I'm asking for is, shouldn't the FDA at least take a look at some of this stuff to make sure that the food we're getting on the grocery shelves is the food that will make us healthier and reduce health-care costs and improve our quality of life? That's it. I'm making no judgment whether it's right, wrong, or indifferent. We'll let the scientists do that.

ANJALEE KHEMLANI: Absolutely. And to that point, in 2018 the Farm Bill included $25 million for these programs. And that is supposed to be increased to $56 million by 2023. So with all of this money being poured in, do you find that congress could play a role in emphasizing these and investing more, to your point, of reducing health-care costs over time?

JON TESTER: I do. I can tell you that those studies I have not seen the results of. And that's probably shame on me. I've got to dig into those to see what kind of research has been done.

But in the end, I think congress can play an incredibly important role. I mean, we can help push the agencies to do the work they need to do. And I think that the head of the FDA was very open to this kind of stuff, being a heart doctor himself, and understands that food can really help reduce doctor and health-care costs and improve quality of life. Now, there are some other things that go along with that, too, like exercise and good mental health and those kinds of things. But food is pretty basic.

- It's true. We're made of nature. It makes sense that nature will also help heal you. A big thank you for this wide-ranging interview. Senator Tester there and our very own Anjalee Khemlani, thank you both.