On CNBC’s Closing Bell, Portman Discusses the State of the Economy, Inflation, & Bipartisan Competition Bill
In an interview with CNBC’s Closing Bell, Senator Portman discusses the current state of the economy, a potential recession and what that means for Ohio’s working families. Portman expressed his concerns about consistent negative economic growth and higher prices for common essential items like oil and gas. Portman also spoke about the need to keep the United States’ economy competitive with China through the bipartisan CHIPS Act legislation to spur semiconductor manufacturing in America and the importance of getting the bill across the finish line.
A transcript of the interview can be found below and you can also watch the interview here.
PORTMAN ON A POSSIBLE RECESSION
“Well, I would love to see a soft landing and I hope that’s true but we just saw the revised numbers in the first quarter. A lot of people don’t realize that we actually were at negative economic growth in the first quarter, and two quarters of that, technically is a recession. So I don’t know; nobody knows. I suspect we are probably going to be negative economic growth again. In any case, for most Americans, it sure feels like a recession already because they are paying $5 for a gallon of gas, because they are seeing food costs go up dramatically – clothing costs, everything. And so, for working families in Ohio they are already pulling back and cutting back and so I think the recession mentality unfortunately is upon us.”
PORTMAN ON INFLATION & FED RESPONSE
“Well it’s pretty simple in the sense that you know, demand is exceeding supply still so we have got to do more on the supply side. On the demand side the Fed is taking its role; they’re raising interest rates. No one wants to see that but that will dampen demand. It’s already happening. They will probably by the way have to go higher, based on the history of recession.
“The Fed was slow, as almost always. It’s easy to look back in retrospect but they were slow to come to the table if they would have raised interest rates a little bit earlier on, it would’ve been better. I think everyone pretty much agrees with that. But with regard to the supply side we have got to have a more productive economy so we have to ensure that we are producing here in America the oil and gas that we need in our economy. When we do that we will see gas prices begin to go down. We talked about worker retraining. We have got to make sure we are a more productive economy. We have got to reskill people quickly, be sure that we are competitive in the global marketplace. We have talked a lot about semiconductors and being reliant on other countries around the world that don’t like us much for some of the essential products that we have. So this new legislation on the competition act its called or USICA, the CHIPS Act, it’s also about this broader issue of making our economy more competitive, I would also argue that the infrastructure bill is going to be good because it will actually be counterinflationary. As you begin to build long-term assets. But, we need to back off on the stimulus which causes the demand and overheated the economy. The $1.9 trillion stimulus from last March was a real problem. So I disagree with the Biden administration on that. But we also have to do much more on the supply side.”
PORTMAN ON CHIPS ACT BECOMING LAW
“Well I hope it happens. I spent most of out here being here with you and these great panels and trying to help on that process but I think we will probably get it done because it just makes so much sense. We are falling way behind. Semiconductors are in everything that are essential to our economy. We used to produce a lot of them, in fact we came up with the whole technology. 30 years ago we had about 37 percent of the production here in America, now we are down to 12 percent. 90 percent of the high-end semiconductors are being produced in one country in Asia: Taiwan. So we reliant on other countries right now – you see this with the automobiles. People can’t get a car because they are lined up at a parking lot somewhere waiting for the semiconductors to be added. But it’s about electronics, it’s about everything we do in our lives; its more digital. And then it’s about our national security, and that’s incredibly important to me that we have a semiconductor industry here in the United States that we can rely on for our F-35 fighters – for all of the more sophisticated military technology that we need to keep that qualitative advantage.
“Well it’s bipartisan but the House bills and Senate bill were very, very different. I would argue that the House bill should’ve looked more like the Senate bill because we passed the Senate bill 15 months ago. It was entirely bipartisan. We negotiated it with Democrats in the Senate. As a Republican, I was one of the people negotiating but I also negotiated with the White House. We came out with a bipartisan product. The House, over 11 months of adding to it came up with a bunch of stuff that could get virtually no Republican support, and sent it back, and now we are in conference with them trying to figure it out. So it’s been made more complicated in my view but understanding that this is an essential and urgent matter for us to address and the bipartisan compromise has largely been worked out. So my hope is that we can come together.
“Europe and Asia. We just had a silicon wafer company say that they are going to produce in South Korea rather than in Texas because of the CHIPS Act not being passed. So we do need to pass this and generally we need to ensure that we have a competitive economy here and there’s more than just the CHIPS Act in this legislation including protecting our research from China because over the last two decades unfortunately China has identified the best researcher, the best research and taken that back to China often helping them to leapfrog us.
“I think it’s got to get done quickly. I think if not these companies will make decisions to go elsewhere. You mentioned the fact that Germany has put Euros on the table and so have countries in Asia. A lot more than we are putting on by the way, so we are not going to be as generous with our incentives as they are, but we are doing enough to be able to incentives these companies to produce here. We have got to bring things back and reshore it to America – the things we need that are essential.”