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Rep. Dan Kildee, (D) Michigan joins Yahoo Finance Political Reporter Jessica Smith and the Yahoo Finance Live panel to discuss Pres. Biden’s infrastructure plan.
- On "Tipping Point" today, we are taking a closer look at some of the key climate initiatives in President Biden's $2 trillion infrastructure bill. And it is a long list. So let's talk about some of the key initiatives there. The bill calls for in part $174 billion to expand electric vehicles, $100 billion to update the country's electric grid, $16 billion to help fossil fuel workers transition to green jobs among other key initiatives in there. Let's bring in Congressman Dan Kildee joining us from Michigan. We've also got Yahoo Finance's Jessica Smith joining in on the conversation.
Congressman, it's good to talk to you today. President Biden has framed this as the American jobs plan. So let's talk about what the economic impact is to Michigan. Net net, how big of a bump will these climate initiatives be for your state?
DAN KILDEE: Well, it could be big immediately because this whole infrastructure initiative will stimulate the economy over the eight or 10 years that it'll be played out. But I think specific to our state since we are, you know, a central state in auto manufacturing, it gives us a chance to position ourselves to own the future.
A big concern that we've had in the automotive world is that the transition to electrification could take place without the US being a principal manufacturer. Half of the electric vehicles are not produced here, are produced in China. And if we don't act now to try to get to scale and to get those unit prices down by getting to scale, someone else will fill that void. So this is not just good climate policy. In this case, it positions us to own our own manufacturing future. And that's really important to a state like mine.
JESSICA SMITH: Hi, Congressman. Jessica Smith here. One of the issues that we have heard about from Republicans largely is concerns about job losses in the fossil fuel space. This plan does take steps to try and help those workers find jobs. Do you think it does enough? Is that something that you're concerned about that you're watching as you try to craft legislation now?
DAN KILDEE: Yeah, it's something to be aware of. And that's why I think what President Biden is proposing kind of covers the bases in the sense that we realize that in the intermediate term, short and intermediate term, we're still going to be somewhat dependent on fossil fuel as we transition to cleaner sources. The question is, at what pace will that occur? And what support do we provide individuals who are being displaced as we go through that transition? I think they've got it about right.
We have to be able to own our own-- as I said before, own our own future. And the way to do that is to realize that for the jobs that are lost, they will be replaced by new jobs and new sectors of the economy, in fact, new facets of the energy sector. That transition doesn't take place automatically. It requires investment in terms of capital investment.
Tax policy is a good way to do that. And it requires investment in human capital. And this is where the Biden administration, by having a focus on that transition, on job training, for example, to prepare those workers for the new economy, helps knit this together, I think, real nicely.
- Congressman, we've heard from a lot of labor unions who have voiced concerns about the types of new jobs that could come to market as a result of this bill saying essentially that these green jobs don't necessarily pay the same rate that fossil fuel jobs do. Do you see this as a fair trade-off?
DAN KILDEE: I see it as a legitimate concern. And I think that's why we have to attack this whole question on multiple fronts. For example, it's really important that we strengthen the American labor movement so that they are able to negotiate for fair wages in these new emerging sectors the same way they have in sectors of the economy that are going through this sort of attrition as a result of the big changes that we face.
So what we can't allow is for the economy to have amnesia. The reason we were able to build the middle class around manufacturing is because we had labor unions that were able to negotiate for fair wages. So we need to strengthen that as we move to this new sector of the economy.
And so I get the concern. The concern I have is that if we don't aggressively move to more sustainable sources of energy, not only will we lose those old economy jobs, but we won't own the new ones. And that's the worst scenario for American workers.
JESSICA SMITH: Another one of the proposals in President Biden's plan is replacing the nation's lead pipes. Clearly, that is a huge issue to Flint. What can Congress learn from what happened in Flint and what's happened in the years after that-- as they try to tackle this on a national stage?
DAN KILDEE: It's a really important point. Of course, Jessica you and I talked about this over the years. Flint is a warning to the rest of the country. What took place in Flint, while it was extreme, it wasn't an anomaly. The price of failure in Flint, which is now going to be somewhere north of a billion dollars.
When we put all of the work we had to go through to get it fixed and now all the settlements of these lawsuits, it's going to be north of a billion dollars. If we don't get that message and invest in replacing those lead service lines all across the country as the Biden administration has proposed, the cost of failure is so much greater than the price of doing it right.
And so I think they nailed it. $45 billion in this plan to replace lead service lines across the country will save not only lead exposure and the impact that that has on the brains of developing children but will save us an enormous financial expense downstream. So this is a good example of why infrastructure investment does pay us back tenfold. And I'm pleased that we have an administration that finally gets that.
- And Congressman, obviously, whenever we talk Michigan, we're talking legacy automakers over there. And the fact that you are so heavily involved in the electric vehicle aspect of this, I'd be curious to get kind of where that enthusiasm is coming from. We've seen them really shift.
I feel like this took place not too long ago and them really doubling down on the EVs to catch up with some of those other automakers, perhaps Tesla. But when you have those discussions with those companies out there, what are they really pushing for to align what you want to see out of the Biden administration and these incentives to make it a win not just for them, but also for the workers involved here?
DAN KILDEE: Yeah, I mean, I think obviously making it a win for the workers is going to require us getting those investments so that the vehicles can be produced here in the United States because they're going to be built somewhere. We don't want to repeat the mistakes of the early 1970s where industry did not see around the corner. And when fuel prices went way up, American producers lost market share in a huge way. We want to avoid that.
But I think the challenge for us, and the piece that I've been working on along with Senator Stabenow on the Senate side, is to structure this credit. And this is where I think the automakers, labor unions, consumers, and environmentalists are all on the same page. Structure the credit so that we can bring those vehicle prices down to a level where middle-income earners can purchase an electric vehicle using the incentives that we put in place. And they are becoming far more accessible to middle-income earners.
We think structuring the credit so that it skews more toward lower-cost vehicles will get us moving in the right direction. It's good for consumers, good for workers because we'll make those-- those cars here, good for the environment because we increase the number of vehicles on the road that are not spewing dangerous pollutants and creating greenhouse gases. It works for all of us. And it works for the companies because I think they see their future now in electrification.
- To what extent is the other element of this infrastructure sort of keeping up in line with the timeline? We've heard from some of these major car-- car makers like a GM who says they're going to go all EVs by 2035, which is great for mass adoption. But there's got to be concerns among drivers that, are there going to be enough charging stations in place? How much of those two tracks are aligned right now?
DAN KILDEE: Yeah, they have to be aligned. And that's why I think what the president is proposing helps us get there in sync. We have to have charging infrastructure so that any anxiety people have about having electric-- electric vehicle can be erased. But it-- so that's one big piece of it, but it also has to do with some of the things that we're doing with the consumer credit that we want to have, the tax credit that is the main driver of electric vehicle purchase.
We want to make sure that we have minimal battery capacity before a vehicle qualifies for the credit so that any vehicle sold using that tax credit is going to have to have the kind of range that will allow customers to feel safe and comfortable that they're not going to have a problem being stranded. So it's the combination of putting charging infrastructure out there and then also making sure that the consumer credit incentivizes the purchase of vehicles that have sufficient range so that a person is not in a position where they're not able to manage it.
Over time, it's going to be resolved because we're going to have vehicle charging stations as ubiquitous as you have gas stations now. That will resolve itself over time. But the transition is not going to be easy. And it has to be intentional. And that's why I'm pleased that the administration is taking this approach.
JESSICA SMITH: I know this is a Senate issue but wanted to ask you about it really quickly. The parliamentarian, it looks like, is ruling that the Senate can use reconciliation potentially another time than they expected. Does that change the way you approach this as you're trying to put this piece-- as you're trying to put this legislation together?
DAN KILDEE: Well, I think it creates more certainty that we're going to be able to deliver something to the president's desk. But I don't think it should take away the obligation that we have to try to work this through in a bipartisan fashion. Policy is always better when it's bipartisan.
The American people support these policies. They certainly supported the American Rescue Act. We think they're going to support the American jobs plan that President Biden has put forward. All the polling seems to indicate that that's the case.
But somehow, that bipartisan support in the country hasn't translated to Washington. So Republicans in Washington seem to still be holding out. So we have to have the tools that are available to us, the reconciliation tool, to get something to the president's desk even if Republicans in Washington don't reflect what Republicans across the country are saying.
I hope that changes, I really do. Because you know, this is an important moment in our history. This is a pivot point for us, not just coming out of the pandemic, but looking into the future. And I hope we can embrace it.