On Senate Floor, Portman Discusses Concerning Economic Trends and Why Bipartisan Infrastructure Bill Will Help

October 20, 2021 | Press Releases

WASHINGTON, DC – This evening on the Senate floor, Senator Portman spoke on the troubling trends that have come out recently showing that the U.S. economy is in bad shape. With the highest inflation rate in 13 years causing record prices for gas and other essentials, millions of jobs going unfilled, stagnant wages for workers, and global supply chain delays, everyday American families are struggling more and more.

Portman laid out how part of the blame lies at the feet of the radical spending policies of the Biden administration, including the $1.9 trillion stimulus bill that passed in March with no Republican support that fueled the demand side of the economy and contributed to the record inflation we are seeing. Portman also discussed the global supply chain woes that have resulted in shipping delays and further increased prices for consumers.

Part of the solution, Portman argued, was for the House of Representatives to pass the bipartisan Infrastructure Investment & Jobs Act, the landmark investment in repairing and rebuilding our nation’s core infrastructure that he helped negotiate this summer. That legislation, which passed the Senate with a bipartisan vote of 69-30 and which President Biden has committed to signing. Not only will this legislation create jobs, grow the economy, and have a counter-inflationary effect on the economy, but as Portman pointed out, funding included for improvements to ports, roads, and bridges will increase the efficiency of our supply chain and help clear some of the backlog.

Portman urged the House of Representatives to pass this bill and keep it separate from the Democrats’ partisan $3.5 trillion reconciliation bill, which would only further add to consumer demand and drive up inflation while implementing the largest tax increases in at least half a century.

A transcript of his remarks can be found below and a video can be found here.

“I’m here on the floor this evening to talk about the troubling state of our economy today and what needs to be done to get it back on track. The Labor Department reported last week that the Consumer Price Index, CPI, rose by 5.4 percent on an annualized basis. that accounts for the largest year to year inflationary increase in 13 years. And we’re feeling it. There’s no question inflation is on the rise. We’re paying more for everything from groceries to buying furniture to cars, even pumpkins for Halloween. Yes, the US Department of Agriculture just told us that pumpkins year to year are going to see, on average, 15.7 percent increase in prices. So you might have to get a little smaller pumpkin this year.

“And of course, we’re paying more at the pump. On average, a staggering 42 percent increase this year, 42 percent increase. This is both because of increased demand, but also because there’s less supply, as the new administration, the Biden administration has put more regulations or handcuffs on American energy production.

“And don’t forget the higher heating bills, about 25 percent higher this year as compared to last year. Just as this cooler weather begins to come in, we’re all going to be paying more on our utility bills, particularly for natural gas. If all this isn’t bad enough, workers’ wages are not keeping up with these price spikes. I love to see wages going up, but honestly, if you look at the data, it says that since President Biden took office, wages after inflation, adjusted for inflation, are down almost 2 percent. 1.9 percent lower.

“Remember, before the pandemic started in February of 2020, we had the 19th straight month of wage increases of 3 percent or more on an annualized basis, well above inflation. Now we’re seeing just the opposite. This means a pay cut for the middle class. The damaging effect of this hidden inflation is in part the result of actions that were taken by the Biden administration and by Democrats here in Congress to overheat the economy through unprecedented levels of government spending. What do I mean by that?

“Well, you’ll recall that economist and former Secretary of the Treasury in the Clinton and Obama administration’s, Larry Summers, said early this year as Democrats were talking about this huge new spending bill that they ended up passing without a single Republican input or vote in March, he said, if you do this, it’s going to cause inflation. He warned about it because he had seen this movie before. When you’ve got an economy that’s already improving and you overheat it with massive amounts of stimulus. Remember, the $1.9 trillion that was spent in March was the highest level ever spent. It was the biggest program ever passed by either house of Congress, $1.9 trillion. We forget how much money that is.

“He recognized that this bill contained billions in stimulus funding, social service spending, the stimulus checks and those were going to fuel the demand side of the economy. And they did not just the stimulus checks, but other things as well. COVID funds to all kinds of institutions, continuing generous unemployment insurance supplements that paid 42 percent of American workers more to go on unemployment than to go back to work.

“All of this added up to a huge influx of social spending, government spending, borrowed money, but government spending into the economy that everyone who was looking at it objectively, I believe, knew, was going to be a problem. Earlier this year, before the Democrats passed this $1.9 trillion spending bill, the nonpartisan Congressional Budget Office here on Capitol Hill told us that the economy was already recovering. And that’s what outside economists were saying as well. Everybody was looking at the economy and saying, you know, in January or February, going into March, the economy was improving nicely. In fact, the Congressional Budget Office again, nonpartisan group up here said the economy is going to get back to its pre-pandemic level by mid-year by June 30. And it did.

“The stimulus was really poorly timed. Instead of allowing the recovery to continue steadily, it effectively poured fuel on an already high economy, which led to the surging inflation we’re seeing now. the White House likes to say that the inflation we’re experiencing is ‘transitory.’ That’s the word that they’ve been using. In other words, it’ll pass as Congress passes more legislation to fix the economy I suppose. Unfortunately, it has not been transitory, and I haven’t seen anybody who’s looking at this objectively say that it will be transitory.

“In fact, I saw an analysis today from an outside group, nonpartisan group, that said they are unfortunately convinced that this high inflation is going to continue next year as well. I hope that’s not true, but that seems to be the consensus. Economists across the spectrum, even the International Monetary Fund, are now saying that rising inflation is dampening future economic growth. You would think all this would cause a policy shift by the administration - pulling back on the stimulus, doing things to actually help on the supply side of the economy.

“But rather than changing course and the policies that contribute to this high inflation and this demand side stimulus, Democrats want to double down with a $3.5 trillion plus massive tax and spending spree that would spend trillions to fund social programs, expand government entitlements, and encourage more consumer demand, fueling more inflation.

“What makes this proposal even more concerning is Democrats want to pay for it by hurting the economy more with big tax increases. Some say it’s the biggest tax increase in 50 years. Some say it’s the largest tax increase in history. It depends, I guess, where they end up. But we know it will increase taxes on pretty much everybody. The Joint Committee on Taxation has done an analysis and said, yes, it’s going to increase taxes on middle income workers. Why? Because it increases taxes on businesses. And they say that about 70% of that tax increase will be borne by workers.

“That’s again the nonpartisan Joint Committee on Taxation. So it’s taxes not just on businesses large and small, but it’s also on workers, on farmers, on manufacturers. This increased spending, combined with job killing tax increases, could lead to the kind of stagflation, low growth, high interest rates, high inflation that we had back in the 70s. We hope never to see that again. And yet, if we don’t change course, we could be heading toward that direction. It’s the last thing our economy needs right now.

“But surging consumer demand is not the only factor driving our current inflation crisis. The other main culprit is that we’re facing a shortage of goods due to a global supply chain crisis. Almost anyone you talk to will tell you they’ve had some kind of shipping delay due to these supply chain issues. There are contractors you probably know who can’t get lumber, can’t get steel to be able to finish a building home. There are plenty of parents out there right now waiting to get their kid a gift for their birthday, only to find out that no matter how much they pay, it’s going to arrive, not for the birthday, but maybe two or three months later.

“These issues are clearly visible if you look at our seaports, which are often the main connector between our country and the main global supply chain, consisting of manufacturers, often in Asia, sometimes in China. Just last week, there were about 60 or 70 ships in a holding pattern near the ports of Long Beach and Los Angeles, California. Think about that 60 or 70 huge container ships just in a holding pattern, not being able to get in.

“And even when the shipping containers are taken on shore, by the way, there aren’t enough trucks to pick them up. So the containers are staying at the Port. There aren’t enough truck drivers because of the labor shortage. By the way, that’s driven in part by this increased demand, but in part by some of the rules and regulations around those transportation logistics and truckers. Between bottlenecks and backlogs at our ports and challenges and transporting freight, there’s real trouble for our supply chains just as we come into the holiday season, which is typically, of course, when people do most of their shopping.

“One reason for this global supply chain crisis is the ripple effects of COVID-19, no question about that. When factories shut down their operations to stem the flow of COVID among their workers, assembly lines sometimes stopped working altogether and created this shortage of goods and materials. Companies that work in the shipping industry also were hit hard by the pandemic and had some of their operations negatively impacted. But then the pent up demand for goods and services kicked in. And again, much more demand was created by the $1.9 trillion spending bill in March of this year than would have been normal.

“So, yeah, you had some of these factories shutting down, had essential workers still working, but you had less production and then all of a sudden this big surge. And therefore the bottleneck.

“Some in the Biden administration have said that this inflation and supply chain bottleneck is a problem for the rich. I don’t see it that way. If they think that, they ought to talk to the factory workers I talked to in Ohio whose wages are being eaten up by inflation. I think they should say that to the mother or father who is having to ask their kid what gift they want for Christmas two or three months ahead of time. In fact it’s too late already, we’re told, to get some gifts for Christmas even now.

“The recent college graduate who is trying to fill her car up with gas to get to work, tell it to her that this is a problem for the rich. Forty-two percent increase in gas prices this year. The supply chain is like any other chain. If you have one weak link, it’s enough to cause the whole thing to fall apart and that’s exactly what’s happened; and its happening at the worst possible time. Part of the near-term solution is to stop any new stimulus spending. That’s not what’s needed right now in the economy. It’s just terrible timing. And stop the new tax increases, because that’s also what we don’t need in our economy right now. We don’t want to make America and American workers less competitive. We want to do just the opposite.

“Part of the long-term solution to prevent a similar crisis from happening in the future is to shore up our supply chains. Instead of being so reliant on manufacturers in places like China, bring the manufacturing home. Reshore it. Invest more in production here in the United States, and in the process create more domestic manufacturing and transport jobs and greater supply chain security. I think that’s going to start happening. If you look at the costs to bring a product from Asia to the United States now, it’s skyrocketed. That gives us a competitive advantage. The market’s here. We ought to bring the manufacturing here as well.

“Another solution is to improve our nation’s infrastructure. Targeted investments in increasing the capacity and operability of our ports, our waterways, fixing our roads and bridges, improving our railways, that all makes sense. For decades, we have neglected our infrastructure needs. Every president, by the way, in modern times has said that. You know, the Society of Engineers who look at our infrastructure and says that we have a grade of somewhere between D+ and C- in this country. We are falling behind other countries. Other countries spend a lot more as a percent of their GDP on infrastructure and it’s been recognized. Really, every president since – from Bill Clinton to Donald Trump – has said let’s make a significant investment in infrastructure. And yet we didn’t do it. We neglected our infrastructure. We’ve neglected our ports. That’s why they are so inefficient today in part, and one reason we’re having to pay the price.

“The good news is that right now there is a bipartisan infrastructure package awaiting passage in the House of Representatives to address this and other problems. It’s called the Infrastructure Investment and Jobs Act. This is the bill that passed the United States Senate here in August with a 69-vote majority. That doesn’t happen very often around here, particularly with big, important legislation like that. It was bipartisan from the start. It was passed with the support of Republicans here in this chamber, Democrats in this chamber, and most importantly the American people, who think it’s a really good idea.

“Economists think it’s a good idea, too, because it improves the efficiency of our economy. Think about it. The bridge that’s holding up traffic right now in my hometown of Cincinnati, Ohio, every day. A massive bridge where I-71 and 75 come together. It’s a huge hit to our economy. It’s also a huge safety problem. Fixing that bridge has been something people have talked about for 30 years. It’s time to do it, and we’ll do it if we can get this infrastructure bill passed. It will also create hundreds of thousands of good-paying jobs in industries ranging from construction and plumbing to electrical engineering and software development, with one recent study from the Association of Equipment Manufacturers finding that the legislation will create about a half a million jobs. It will also help address issues at our ports by providing increased funding for the Port Infrastructure Development Program. Investments in our freight system through rail and waterway and highway and air freight investments. So it actually addresses a real problem we’ve got right now.

“And by the way, these investments are long-term investments. It won’t be a lot of money spent in the next year or so. It will be a lot of money, though, spent over the next five, 10, 15 years to improve this infrastructure and it will be a long-term assets that will last for decades. So it’s a different kind of spending than the stimulus spending. All this will help improve the movement of goods throughout our country. That’s why every business group in America is supporting this legislation. Not just the Chamber of Commerce, but every group out there. By the way, as well as all the agricultural groups. Over 30 Ag groups, including the American Farm Bureau, are supporting this legislation. It’s why a lot of the union members are supporting it, too. In fact, the AFL-CIO Building Trades Council is strongly in support of this legislation because they know it’s going to create good-paying jobs, good benefits. Allowing people to get out there and build things.

“Even more importantly to me, given the recent economic news we’ve seen, this proposal will not cause inflation to increase. Why? Because it’s spending on the supply side rather than the demand side of the economy, as the economists would say. Conservative economist Doug Holtz-Eakin, who is the former Director of the Congressional Budget Office and now head of the American Action Forum, and Michael Strain, who is the Director of Economic Policies Studies at the American Enterprise Institute, also a conservative scholar, have said that our bipartisan infrastructure package will slow down inflation. They said, and I quote, improving roads, bridges, ports, will make it less costly for businesses to operate, allowing them to increase their output per hour and putting downward pressure on consumer prices. Again, this is long-term spending capital assets, it makes the economy more efficient, therefore more productive. That’s counter-inflationary. So this is the right time to do this kind of a project.

“To me, this bill makes all the sense in the world given the troubling and uncertain state of our economy. It gets relief to our supply chains. It makes long-term investments in hard assets. It, too, boosts our productivity in this country. It has a counter-inflationary effect on the economy. So why hasn’t it passed? What’s the problem? Again, it got 69 votes here in the United States Senate. Well, unfortunately, the answer is politics. Democrats in the House of Representatives want to do everything they can to tie their big $3.5 trillion-plus tax-and-spend bill we talked about earlier to the infrastructure investment because they know that’s the only way their partisan bill is going to get the votes needed to pass. So they’ve held it hostage. Hardcore progressives don’t like the bipartisan infrastructure bill because it doesn’t have the tax increases, it doesn’t have the Green New Deal policies, it doesn’t have all the new social spending programs that’s in this reconciliation bill that they really want.

“But holding this investment in infrastructure hostage to this larger tax-and-spend bill is just wrong. It’s playing politics.  And it’s playing politics with the American people. It’s also counter to the pledge that president Biden made to the bipartisan group that negotiated this agreement and made to the American people. President Biden supports this infrastructure legislation. He said he didn’t get everything he wanted. Nobody did. But he supports it. He wants it to move forward. And he pledged to keep it separate, separate from the $3.5 trillion tax and spend bill. And yet, what you see in the house is just the opposite. It’s not fair to the American people.

“They deserve to have the opportunity to have the infrastructure bill be voted on its own merits. Let it rise or fall on its own merits. Don’t tie it to something else. House speaker Nancy Pelosi promised it would come to the house floor about six weeks ago. She promised that to the so-called Democrat moderates in the house.  It didn’t come to the floor. Then she promised it would happen about three weeks ago. It didn’t come to the floor for a vote. Now she has said on October 2 that October 31 is the date. That’s Halloween. That’s a Sunday. But that’s fine, we can vote on Sundays. Even on Halloween. It’s so important, we ought to do it and do it.

“It’s past time to take this bill to the floor of the house. And let it be judged on its own merits. If passed, it will strengthen our economy over the long term and have a positive impact on the lives of every single American. It’s counter-inflationary. It makes our economy more efficient. It adds to, again, the supply-side, allowing us to see not just a short-term boost but a longer term boost to our economy. And wouldn’t it be nice to pass something that makes sense around here that’s bipartisan.

“Instead of jamming Republicans and the country with another reckless spending bill and raising taxes on this uncertain economy, let’s focus on the infrastructure bill that addresses real problems we face today. We could use a sensible bipartisan success right now, all of us.”

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