U.S. Department of Transportation Sec. Pete Buttigieg joins Yahoo Finance Live to discuss President Biden’s reelection bid, the U.S. transportation infrastructure, budget cut risks, advancing railroad safety, rail worker conditions, improving air travel, and the outlook for the U.S. debt ceiling.
And, first and foremost, we have to ask you, should Biden win in 2024, do you plan on staying on with the administration? What is the tenor in the White House right now?
That's coming in a very timely fashion when you consider all of the challenges that our transportation system has had to navigate. And I think it speaks to the broader story of our country and our economy and where it is. Just two years ago, when this president took office, we had lost so many jobs. There was uncertainty over COVID.
Just to take the transportation sector, today we're worried about being able to keep up with all the demand for flights. Two years ago, the big question was, will airlines stay in business at all? So it's been an extraordinary record of accomplishments. I'm honored to be part of this team. But I also have my head down, trying to make sure we can keep delivering on that, because we're smack in the middle of some major, major efforts right now here at this department and across the administration.
Let's just speak frankly here. You're a young guy. You ran for president. I wonder when you think the younger vanguard of the Democratic Party will now have a chance? Do you plan to run again, for example, at some point in the future?
PETE BUTTIGIEG: Well, it's definitely not what I'm paying attention to right now. And, of course, I can't speak to the campaign side while I'm in this capacity. But let me say this-- the level of energy in this administration helps to explain the level of accomplishment in this administration, the fact that you have the most significant infrastructure work done since the Eisenhower administration, one of the most important expansions of health care protections since LBJ, the most sweeping and positive economic legislation and shift in policy to create more jobs since FDR, all while facing the biggest public health crisis since Woodrow Wilson.
I mean, these are epic achievements that reflect the level of skill that the president has brought together in this administration and the level of energy that he brings to leading this team to make that progress. And, by the way, we've done so much of it working with an exceptionally slim majority in the first two years of the presidency and now with the divided Capitol Hill. And yet through it all, you've seen things done that people said was impossible.
I think back to the infrastructure bill. People declared that thing dead half a dozen times before it got passed. So there was no way you could get something of that big done on a bipartisan basis in today's Washington. And yet on that issue, on the CHIPS Act, on the PACT Act, which means so much to me as a post 9/11 veteran and is going to mean so much to so many veterans who deserve to be taken care of by this country, we've been able to find ways to get things done on a bipartisan basis. That doesn't happen from just sitting around. That happens when you have a highly focused, disciplined, and energetic president leading a focused, disciplined, and energetic administration.
BRIAN SOZZI: Mr. Secretary, in crunching numbers on the publicly traded railroads, and a couple of things stood-- stand out, really, that they may have been underinvesting in their businesses over the past five years and some names in particular reinvesting that savings in dividends and stock buybacks. How big a concern is that to you, that that is impacting rail safety in this country?
PETE BUTTIGIEG: Look, we have a lot of concerns about the business models that the railroads have adopted. They strip out the human factor. Employment at some of these major railroads is down 30%, 40%. They've become wildly profitable but have not been able to dramatically improve their efficiency or their fluidity in moving goods.
And it's really come on the backs of workers who are now overworked, stressed out. And this is part of what led to so much concern last year as workers were insisting on sick leave, something that we still believe these railroads need to provide. Some of them have negotiated it with some of their unions. But they should all be doing more right now.
We're also concerned about railroad safety. It's why we're using the authorities and the tools that we've had, have been using them since day one, for example, instituting audits, something the last administration didn't do much of, reinitiating rulemaking on things like a minimum crew size for railroads. But we could be doing more. And that's exactly why we're calling on Congress to follow through on this Railway Safety Act, bipartisan legislation that would do things to make freight railroads safer in this country and empower our department to do more to hold these freight railroads accountable.
We've been able to get them to do some things on a voluntary basis. But they're not going to do these things just because we're asking. They're not going to do these things on their own. We need to make sure we have strong rules and good enforcement to hold these freight railroad companies accountable. And I can tell you, when you look at their numbers, they could do better by their workers. They could do a better job and still be plenty profitable.
BRIAN SOZZI: In terms of the proposed GOP budget cuts, how detrimental would those cuts be if implemented to the railroad and the aviation industries?
PETE BUTTIGIEG: These GOP budget cuts would reduce our ability to hire air traffic controllers. They would reduce the number of hours of inspection time we have on our railroads. I'm astonished that these House Republicans think now is a good time to cut railroad safety, that anybody looking at the challenges that the aviation system has had would say now is a good time to cut air traffic control. We would have to shut down air traffic control towers if the House GOP Freedom Caucus budget cuts were to go into effect.
A lot of times, I think they talk about our budget, our spending, as if just anything that wasn't defense was optional. I would argue that air traffic control is not optional. It's a very important part of our economy.
I would argue that freight railroad safety inspections are not optional. Lives depend on it. And those are just two examples of things that would be cut if this extreme House Republican budget proposal went into effect.
- Just after the earnings report dropped for Delta, we actually had the opportunity to speak with Delta Airline CEO Ed Bastian, who had this to offer on his thoughts about the improvements needed in the airline industry to keep pace with travel demand. Here's what he had to say. I want to play a clip and get your response on the other side.
ED BASTIAN: I think we all agree, as does the FAA, as does the secretary of transportation, the need to continue to modernize the tools and the capabilities of the air traffic controllers. And we also need to increase the staffing levels of the air traffic controllers and the throughput in terms of taking new controllers and having them become experienced ready and into those chairs. What it requires is funding on a multiyear basis.
- And so, Secretary, if this funding does not get approved, what type of disruptions should travelers brace for when it comes to the summer season and perhaps even later on into the year?
PETE BUTTIGIEG: Well, if you see a freeze in air traffic controller hiring, that would impact us for a very long time because it takes a long time to get controllers qualified in the first place. Now, the president's budget actually calls for adding air traffic controllers for exactly the reasons that the Delta CEO there is citing. We've got to make sure that staffing is not the limiting factor.
Now, I want to emphasize, right now, air traffic control staffing is not the main reason for cancellations and delays. But it is a factor. And in order to keep that factor from growing and move it in the right direction, we've got to have the tools to invest in the people and invest in the technology to modernize FAA systems.
Many of these are legacy systems. They've, obviously, done an incredible job in terms of the extraordinary safety record here in the most complex and safest airspace in the world. But it's not something that's just going to keep going on its own. You have to fund it.
And that idea of being able to have a multiyear vision for how we're going to improve these systems, being able to have a multiyear vision for how to get these air traffic controllers in seat and be hiring at a faster rate than people are retiring, these are critically important. They're in the president's budget. And we're urging Congress to work with us to get it done. The last thing anybody should want to see right now is more cancellations and delays because politics somehow got in the way of doing the right thing for safety and for convenience of airline passengers.
- Well, it certainly wouldn't be the first time politics got in the way of something that was trying to get done in Washington. And, as you said, you're head down, you're really focusing on these issues. But what's your sense of what is going to happen on the budget fight? And, obviously, the thing that markets are paying a lot of attention to, which is as it relates to the debt ceiling fight, what's your sense of where negotiations are at this point?
PETE BUTTIGIEG: Well, first, House Republicans need to take the default off the table. This idea of taking the economy hostage in case they don't get their way is such a threat to the US economy. And nobody would be better off if they follow through on their threat to wreck the economy over not getting their way by not passing a clean debt limit bill. And that has been done time and time again under Republican and Democratic presidents and congresses.
Then, once they take default off the table, we can have an adult conversation. We're in the middle of a conversation now, actually, about the budget. It's what I was testifying about in the Appropriations Committee in the House last week. And it's what we need to really focus on.
Now, our budget is one that has the right kind of funding for the future transportation. It's really hard to tell other than this flash-and-cut rhetoric, hard to tell what their counterproposal amounts to in detail. But that's the conversation we could be having if we got over the brinksmanship and if House Republicans would make clear that they, in fact, are not willing to throw the US economy over a cliff by refusing to pass a clean debt limit bill.
- Mr. Secretary, thanks for your time today. Pete Buttigieg is, of course, transportation secretary of the United States. Appreciate your time this morning and our Brian Sozzi as well.
PETE BUTTIGIEG: Thank you.