On FOX Business, Portman Discusses Economic Outlook, Need for Bipartisan Approach to Infrastructure
WASHINGTON, DC – Today on FOX Business’ Kudlow, Senator Portman discussed his concerns over the long-term outlook for the economy given the Biden administration’s $1.9 trillion COVID-19 stimulus package, proposed tax hikes, and monetary policy. Portman believes these factors could contribute to higher inflation and higher interest rates down the road, and make America less competitive. He also highlighted the need to put in place common-sense policies that get more people back to work, like robust skills training programs, rather than expanded unemployment benefits that create a disincentive to work.
In addition, Portman expressed optimism that a bipartisan agreement on a targeted infrastructure bill is possible if the Biden administration is willing to work with Republicans.
Excerpts of the interview can be found below and a video can be found here.
PORTMAN ON ECONOMIC OUTLOOK UNDER BIDEN:
“Well, Larry, you’re the expert, but it’s complicated. I think what’s going to happen is you’re putting pressure on the accelerator and the brake at the same time, because the spending is the stimulus, the brakes are the tax hikes, and then the monetary policy adds to the uncertainty. I think what you end up with is an economy that will not be nearly as strong as it would have been because of the brake, and higher inflation because of the monetary policy and also the increased fiscal spending at a time when the economy is likely to be overheated. So I worry about it, and it’s going to happen, probably, over time, so you’ll see better economic growth at first, but a year from now I would worry about higher inflation and higher interest rates.
“Well it is, and it’s building on what’s already happening. And you know, Larry, that there are employers all over the country now looking for workers. I’m told there are over 500,000 job openings in manufacturing alone. I hear it from every sector in Ohio, including the restaurant and hospitality sector. They’re looking for workers, and so if you want to get a job today, you can likely find one.
“The other issue we’ve got is skills training. We don’t have people with the correct skills to fill some of these jobs, and that would be, I think, a very helpful thing for government to help on, is to ensure that we have people who can learn how to weld, and drive a truck, and do the hospital tech work, and do the technology work, like coding. Those are the middle-skill jobs that are needed. So I think there’s kind of a disconnect between what the president’s talking about and what the reality is. And we already have a disincentive to work out there, which is that the unemployment insurance is continuing well beyond the time when the economy would justify it. As an example, during the COVID-19 debate, we talked about ending the additional $300 federal supplement on top of the state unemployment early this summer. Democrats defeated us on that and instead insisted it continue until the fall. That’s creating issues back home with employers who are eager to get folks back to work. So I do think it provides a disincentive already, and these additional ideas, if there’s not a work requirement connected with them, could have the same effect.”
PORTMAN ON EFFECTS OF BIDEN TAX HIKES AND INFRASTRUCTURE:
“I’m not sure I can. As I add it up, Biden has now proposed about $6 trillion in new spending since coming into office, the tax cuts in 2017 were just under $2 trillion of tax cuts. So even if you added all of those tax cuts back, which would be a grave mistake given what’s happened to our economy pre-COVID -- the tax cuts worked, in other words. Increased wages, lowest poverty rate since we started keeping track of it, lowest unemployment ever for Blacks and Hispanics. It was working, bringing people off the sidelines into work, 19 straight months of wage growth over three percent annualized as of February before COVID.
“So it was working, and now he wants to reverse that, plus he wants to add additional taxes, because again, the roughly $2 trillion in tax cuts does not pay for the $6 trillion in new spending. So it’s going to hurt the economy, and the point I was making with regard to the 70 percent figure is that the Congressional Budget Office, which is a nonpartisan group up here in the Capitol, they said the tax cuts on the corporate side were flowing primarily, 70 percent, to wages and benefits for workers. And it was reflected in the numbers. In other words, we did have wage increases first time in a decade and a half in my home state of Ohio and elsewhere.
“That is what we’re giving up if we start taxing again. Also, America’s competitive position -- we heard a lot about that last night, America needs to be more competitive. Well, the worst thing to do for competition is to saddle our workers with a tax code that does not let them compete on a level playing field.”
PORTMAN ON A BIPARTISAN APPROACH TO INFRASTRUCTURE:
“Well my strong desire is that we take up infrastructure separately. That is the right way to do it, Larry. As you know, this is about investing in infrastructure, which is different than new social programs. Some of this infrastructure will last 50 or so years, and so you want to probably pay for it differently, including some bonding, including some user fees. So it doesn’t make any sense to combine them. And unfortunately what the president proposed as infrastructure was mostly not infrastructure. Only 20 percent could be defined as infrastructure even using the most broad definition to include broadband, water infrastructure, transit, and so on.
“So my urging of the White House and my colleagues on the other side of the aisle is to say, ‘Let’s come together with a bipartisan agreement on infrastructure.’ We can get there. President Trump and you and your administration were promoting much the same idea. By the way, it will be an unprecedented level of spending even with the Republican proposal, which is less than the Democrat proposal of course, but infrastructure, fixing our roads and bridges, making our economy stronger over time, creating jobs, that is something we can work with. So I hope they will pull that out of all the other stuff they’re talking about and let us have a good bipartisan victory here for the American people.”