March 28, 2024

‘Inaction is not an option’: Buttigieg talks taxes, tech and tight deadlines

WASHINGTON — How does a mayor go from running a midsized Midwest city of 102,000 to overseeing a U.S. government department with a budget of $86 billion and a workforce of 55,000 and promoting one of the largest — in scope and cost — infrastructure and public works bills since the New Deal?

Pete Buttigieg, the former mayor of South Bend, Indiana, took the reins of the U.S. Department of Transportation earlier this year.

The new secretary of transportation has been on the road and on the air, promoting President Joe Biden’s proposed American Jobs Plan, a $2.3 trillion infrastructure and public works plan that addresses “hard” infrastructure, including roads, bridges and ports, but also addresses water and electrical grid infrastructure, broadband and the “care economy,” including home health care and day care.

Buttigieg talked to Anna Palmer and Jake Sherman of Punchbowl News, a daily online political news site, about his tenure at U.S. DOT so far and about the proposed American Jobs Plan.

Sherman: Could you envision a bill without raising the corporate tax rates?

Buttigieg: The president said if other people have ideas on how to pay for this, they should bring them forward and we’ll hear them. He does have a red line on raising taxes on people making less than $400,000 a year, but there are a lot of different ways to get there.

The corporate rate, we believe it’s the right thing to do and it’s an area that’s getting a lot of attention, but there are a lot of provisions in what we are trying to do to fix the corporate tax code, to reduce the incentive to park profits or to move job overseas, for example, increased enforcement capabilities in the IRS, because even under the existing rates, we’d be collecting a lot more if we made sure everybody was playing their fair share.

There are a whole bunch of different policy elements. The rate is just part of it, an important part, but far from the only part of what we are trying to do here.

Sherman: Let’s talk about electric vehicles. You, meaning the administration and Congress, have gone through a bunch of different proposals to make sure EVs pay their fair share, because they don’t consume fuel, they don’t consume gas. What is your latest thinking? And your answer cannot be, ‘Well, we want to see what Congress comes up with.’ I want to know what you guys think about EVs and how EVs will help rebuild roads and things of that matter.

Buttigieg: We’ve increasingly seen over the last few years a move toward using more general funds in order to fund our roadways, which is just separate from the way that fees and charges are assessed at the vehicle level. That’s true federally. Locally and in different states, very different stories, and each state is approaching this in a somewhat distinct way.

Some counties impose a wheel tax, they don’t care what’s powering the engine, they just go by the car, but it’s different at the federal level and this is the conversation we’re having with Congress about the long run.

The important thing I want to mention — or the important thing I want to repeat — until I’m blue in the face is that the American Jobs Plan is fully funded without looking in that direction, because we can do it just by having normal corporate tax rates in this country and making other needed reforms.

Sherman: It seems to me you guys not only believe that it’s a pay-for, but you also see raising the tax rate in some way, shape or form as a moral priority, as good policy, not only something to pay for this large-scale bill. Is that a correct read of the situation, from your end?

Buttigieg: Yeah, I think so. I think this is good policy. You don’t change tax rates for their own sake. You do it to fund important priorities. We have go the important priorities there in terms of infrastructure, and we’ve got the proposal on how to pay for it in terms of corporate tax rates.

One of the most interesting things about public support for this bill is it actually goes up from its already high levels when you explain to people how we are proposing to pay for it, because people get it. They see that some of the biggest corporations in the world have been paying zero in taxes on billions in profits and that doesn’t make any sense.

What we are proposing here is not about punishing anybody. These rates aren’t even high. By historic standards, we’re not calling for high taxes. We’re just calling for normal tax rates by American historical standards, on corporations and the wealthy.

Palmer: There’s been a lot of talk about how this package would spend $300 billion to promote advanced manufacturing to restock the country’s strategic national stockpile of pharmaceuticals, including vaccines. Do you expect to see a significant spike in manufacturing jobs across the country? Can you talk about what this kind of a package and passage of it would mean for that industry in general?

Buttigieg: The truth is we could be doing more and we will be doing more under the president’s plan to make sure we support manufacturing right here in the U.S. Think about electric vehicles, for example. Electric vehicles are an area that is clearly the future of where so much in the automotive industry is going.

The real question isn’t whether there will be more EVs in the future. There will. The question is whether the EVs of the future are going to be built in America, on American soil, by American workers and American companies, union workers we hope. Or, are they going to be made in other countries and brought here?

That question doesn’t just reach a good conclusion without us having some intention. That means investing in our workforce. It means investing in the manufacturing sector here. It means looking at supply chains, the reliance that we have on semiconductors, for example.

That’s the one we’re seeing at the moment, produced overseas, is really a limiting factor on U.S. manufacturing. Today it’s semiconductors. Tomorrow it could be batteries or something else if we don’t strengthen our domestic capabilities.

Palmer: Is there a deadline, a line in the sand?

Buttigieg: I think that’s what the president is expressing when he says that inaction is not an option. I don’t know that it’s been laid down in the form of a date, but as you know, there’s a lot of impatience on the part of the public and a lot of eagerness on the part of this administration, and by the way, the people we’re talking to in Congress to get something done and to make sure it’s real.

There are some timelines and clocks that are moving in some ways with or without us, if you think about the things that just need to happen. For example, a surface transportation bill that’s up for renewal this year has got to move this summer if it’s going to be reauthorized. I think May, in particular, is a month where you are going to see a lot of action.

Sherman: Why is it important for you to get Republicans along instead of just pushing it through on your own?

Buttigieg: The president believes that the best way to move things along is on a bipartisan basis. It may not always be possible, but it has a whole lot of value in terms of the durability and the strength of the policies that we are trying to pursue.

The other thing I would say is, why wouldn’t you? Why wouldn’t you try to make sure you can get as much support as you can from both sides?

I will say the president has also made it very clear that inaction is not an option. This is not a process that should be dragging on. This is one that needs to be efficient, needs to be swift, but needs to be thorough and those are the kinds of conversations we’re having, inviting Republicans to bring specific ideas to the table, seeing where there might be overlap, seeing where there might be agreement, especially in an area like infrastructure, where there is so much common ground.

It was a mayor who famously said there is no such thing as a Democratic or a Republican hole in the road. If there’s any area of domestic policy left where we can do something on a bipartisan basis, I’ve got to believe it’s on things like transportation and infrastructure.

Jeannine Otto

Jeannine Otto

Field Editor