On the Crain’s Landscape Podcast, Portman Discusses the Economy, Infrastructure, and Other Key Issues
June 2, 2021
During an interview with Dan Polletta on The landscape Podcast, by Crain’s business in Cleveland, Senator Portman discussed the Democrats proposed Infrastructure Act and the economic impact of its payment. Portman pointed out that not only does the bill contain elements that are traditionally not considered infrastructure, but that the Democrats want to pay the bill through tax increases – increases five times higher than the tax cuts passed in 2017, which Portman says will hurt Americans would workers and make American companies globally competitive.
Portman also talked about the need End the US $ 300 per week federal unemployment benefit to encourage people to return to work The Combined with state unemployment benefits, the allowance has created a situation where more than 40 percent of workers can earn more by staying at home than by returning to work. Portman cited the insert as one reason the US had a disappointing job report in April.
Portman raised a number of other issues: the potential for increasing the state minimum wage; his Bipartisan letter to US Trade Representative Katherine Tai requesting that the process of eliminating American companies that buy exclusively Chinese-made products be resumed; and the recent inflation the country is experiencing.
Excerpts from the interview can be found below and you can watch or listen to the interview Here.
PORTMAN UNDERLINES THE NEED FOR AN OVER-PARTISAN INFRASTRUCTURE PACKAGE
“Well, I think it’s great to have an infrastructure bill, but the problem with the one proposed by President Biden and his team was largely unrelated to infrastructure – by any definition you or me or anyone else could define. “Had over the years. About 20 percent of that would go in roads and bridges, rail and transit, and even include broadband – which is a broad definition – which I think would be in infrastructure, water infrastructure, etc. So the broadest definition ever used for infrastructure would be only make up 20 percent of the bill because much of it, as they say, is called soft infrastructure. So things like nursing homes, more childcare and so on. These are worthwhile goals that should be included in other legislation, but not in an infrastructure package.
“So the first step is, how do we actually define what infrastructure means, and I think we’ve come a long way there, and I think if you look at the Republicans ‘proposal, it’s very much like the Democrats’ proposal on infrastructure similar. In fact, the Republican proposal would be the largest infrastructure proposal ever passed by Congress – everyone is talking about higher numbers now. The other issue is the pay-for problem, as you say, and that’s a really good question – that’s the difficult one. So everyone is in favor of more roads and bridges, but nobody wants to pay for them …. one problem with claiming that nursing homes are infrastructure is that more nursing home subsidies are paid differently than long-term capital projects like a bridge that could last 50 years … .There is an argument for longer term funding and even government debt funding, as we do all the time in the private sector and at the local level….
“The idea of the Biden government is to raise taxes. The problem with this idea is that it would damage the competitiveness that we finally have in this country…. Not only has it reversed what we did in 2017 and made our US businesses less competitive again, it even added new taxes that … I think we can get a bipartisan compromise here because we’re starting to get it closer to be defined on the real infrastructure … “
PORTMAN CALLS ON FEDERAL GOVERNMENT TO END THE UI ADDITION
“That’s a great question, and that’s the question of the day in Ohio. I’m sure you’ll get a lot of input from Crains readers, but I hear a lot from companies. At first it was just small businesses, franchisees, restaurants, and now it’s all. I have a friend who is a manufacturer in the Cincinnati area who is currently hiring 60 people – she only has about 225 employees – but she just can’t get people to come back. So she walked away during COVID, didn’t fire anyone during COVID, but she can’t get people back to work, and she primarily attributes this to the federal government paying an additional $ 300 extra each week the state benefit from unemployment insurance. So when you get unemployed, the state of Ohio is basically saying, “We’re going to provide half your income,” and that’s an average of $ 360 a week. And on top of that, another $ 300 a week means that this person who is unemployed will make roughly the same if they work at VinylMax or another company – maybe more in some places.
“On average, 42 percent of these people earn more from unemployment than they were at work… My own opinion is that we should end the $ 300 per week federal allowance, but we should still have a broader definition of unemployment insurance that Includes self-employment because I think that was an important reform … and for people who lost their jobs through no fault of their own, we had to do so at the height of COVID, but now Dan, we have more vacancies in America than ever before our history … 8.1 million jobs are currently open … “
PORTMAN ON ECONOMIC OUTLOOK AND INFLATION RISKS
“The April numbers were disappointing. They thought it was a million and it was 266,000. And I honestly think the main reason, when you look at these job numbers, it’s usually because not enough jobs are being created, number one, but secondly, not enough jobs are being offered. And this is what a poor month looks like.
“April didn’t look like it. First, not enough jobs have been created compared to what everyone estimated, what we all need now – and by the way, I think you will see better numbers in May because some states did Over during your speech. But the second part, there were a number of job openings – an unprecedented number of jobs, a record number of job openings. So the job vacancies are huge, the people who take these jobs are relatively small. And I think that’s primarily about $ 300 unemployment insurance, but also some of the other factors that you mentioned. Some people are still reluctant to go back to work because of COVID, although I think that is changing very quickly. And then the childcare issue that you mentioned. I think when the schools reopen that will change and hopefully some summer programs will reopen when we get into summer.
“But I think this should be a wake up call for us, and we should all want everyone to go back to work. I mean why shouldn’t we want this? The other thing I’m about to say, and that’s probably pretty obvious to anyone who’s listening: Inflation is here and the Treasury Secretary has to say how she said it to some questions we asked her a few weeks ago: ‘Well it’s not, it’s not really inflation, or it’s not structural inflation, or …’ It’s inflation. I mean, you go to the gas pump, go to the grocery store, try to buy wood when you do house repairs – boy, things have really gone up. And I think when the government launched the $ 1.9 trillion COVID aid package, right after we put a $ 900 billion package together – those are huge numbers and the amount of incentives was unprecedented and now want to do more.
“But the point back then is that a number of people said that if you put that kind of stimulus into the economy, including the extra individual payments of $ 1,400 to get to $ 2,000, plus the UI – Achievement, plus the other child tax credit and earned income credits, and just more money for the economy, more incentives, you will see inflation. And Larry Summers is known to be the former Democrat – he’s still a Democrat – but the former Democratic Treasury Secretary said this and others too. Jason Furman, who was in the Obama administration – chairman of the Council of Economic Advisors – spoke about this recently.
“And a lot of us on the Republican side of the aisle were like, ‘Wow, this is really a risk for this inflation.’ And that’s the worry I have, if we don’t start cutting spending a little bit so that we don’t get this bubble effect, higher interest rates and higher inflation will be. Hope I’m wrong. I hope you see one some flattening when the economy picks up and people go back to work, but right now there is still a lot of pressure on inflation and again some of the people I talked to over the weekend came over and paid me an ear who have been in business paying those higher costs for all of their raw materials – I mean, Proctor and Gamble just raised their prices across the board because of this – they don’t think it’s going to be over anytime soon.
“I hope you are wrong. I mean, I hope you start to see some leveling off because inflation is just the worst thing for middle class families. I mean, it just eats up your savings and your ability to have a good standard of living. You can make more money, but the money is worth less. And then the same with interest. We want prices to stay relatively low and they have already crept in. I hope they won’t sneak in any further. “