tv The David Rubenstein Show Peer to Peer Conversations Bloomberg May 8, 2021 1:00pm-1:30pm EDT
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david: you don't feel inadequate now as only the second wealthiest man in the world. is that right? i am in the hall of flags at the commerce department in downtown washington and just had a conversation with the secretary of commerce, gina raimondo. she is clearly one of the most talented people in her generation. yellows group -- a yield law graduate, venture capitalist, treasurer of rhode island, two-term governor of rhode island, president biden asked her to serve as secretary of commerce, and she is one of the point people helping to get legislation. this infrastructure many presidents have proposed infrastructure bills come about very few have got them through. why do you think that president biden's bills will likely get through if you do? gina: i think we will. i have had numerous conversations with people on capitol hill and there is bipartisan support for the bill, maybe not all of the bill and all aspects of it, but i think there is a growing recognition that we have kicked the can long enough, and there are -- there
is a backlog of infrastructure in every state in america, and i think this will be -- and the president is determined, so that helps. david: president has two types of infrastructure. traditionally it with is -- it is airports, roads and he has that in the first page of his infrastructure bill. he has a second part which is the caring part which deals with elderly care, child care, so forth. why did he do it that way and then people confused when he calls it things that are related to people infrastructure? gina: yes, people are confused. i think he did the right thing. i think that investments in that care economy and then those systems which are fraying all over america. i know it from rhode island, my own state. it is vital. you can't go to work and be productive if you can't have
good access to childcare and eldercare. our people confused? yes. are there some republicans balking at the inclusion of the care economy, yes. but i like our chances of getting it through. the president is committed. david: we have a $1.9 trillion stimulus package the president got through. there were no tax increases, we borrowed all of that money. why not do the same with the infrastructure bill, why do we need tax increases? gina: call it old-fashioned, but the president thinks we ought to pay for our investments. you have to pay the bill, you cannot put everything on the credit card and not pay it. the rescue package was an emergency. there were lives on the line, we had to get the vaccine out, we
had to meet the needs of the pandemic, that was the crisis, emergency response, so he felt it was appropriate. these investments he feels very strongly ought to be paid for and his proposal is to go ahead and raise taxes on companies and he has been very clear. his redline is no one making less than $400,000 a year will see their taxes increase, and by the way, i think it is responsible. we can afford it. businesses, there are dozens and dozens of very profitable multibillion dollar companies last year that paid nothing in taxes. closing those loopholes and using that money to invest in infrastructure is a good investment. david: two different types of tax increases he proposed. the first bar on the traditional part of infrastructure, proposed raising the corporate tax. some people say that the president might be prepared to compromise at a lower rate. what is your view at how high the rate needs to be in order to pay for some of the things in the bill?
gina: he has come out where he has come out at 28%. we are willing to compromise. we think this is a reasonable proposal, it is not as high as it was. 21% was unreasonably low. most business people will admit that, they were expecting it to go back up to something reasonable. we put forth one proposal. investments over an eight-year period paid for over a 14 year period. there is compromise. if the republicans were to come back with a slightly lower rate, maybe we pay for over a longer period of time, i am sure we can find that. i am sure we could find that common ground. david: your job as secretary of commerce among other things is to be a liaison with the business community. as you are liaison with the
business community, what do they say to you? do they say, i don't want to a higher tax increase, or i can live with something, but don't quote me. what do they tell you? gina: [laughter] exactly. some have been for it. microsoft, salesforce, they have come out for it, in favor. others have said, yes, there ought to be an increase in the corporate tax rate. everybody seems to agree that it is wrong that we have so many companies who paid no taxes last year. we have to close loopholes that enabled that, and a lot of people, maybe they feel 28% is a bit too high, maybe 26% or 27% might be a better number. but i have made dozens and dozens of phone calls to ceos across industries and they agree we need big investments and infrastructure.
they applaud the president for calling not just for traditional infrastructure, they like investments in research and development, broadband, technology, semiconductors, and they know that higher corporate taxes are a way to pay for. david: people in washington often measure one's power with how quickly you can get your call returned to. when you are government -- governor of diamond, you probably -- governor of rhode island, you probably get your quote returned right away. when you are secretary of commerce, how long does it take to get your call returned? gina: it is pretty quick so far. it depends on who you are calling. because of my career in business and my career in public service, i already have strong relationships with many people in corporate america, so they know me. they return my call.
here's what i would say, there is a general desire to help this administration be successful. people realize, we have to be successful. the business leaders i am talking to, they know we need to make these investments. they know we have to compete with china, they want to help us be successful, so when i call on behalf of this administration, so far, calls are returned speedily and they are engaged. david: let's talk about the individual tax increases that are part of the care part of the bill. the president has said no tax increases for anyone making $400,000 or below, and the people above that, they will see a tax increase that could go as high as 39.6%. do you expect that will be compromised as well or do you think the president is determined to get every think he is proposing? gina: he is proposing it today, but i will say this.
the president wants bipartisan action. if compromising is a part of that, it is what he wants to do. he has been crystal-clear with us. the only thing that is unacceptable is getting nothing done. we have to get things done. the capital gains, treating capital gains like ordinary income will be controversial. is there room for compromise, maybe. but he feels we need to raise those taxes and we will come as we go. ♪
david: let's talk about your background. you grew up in rhode island. were you the child of privilege parents, very wealthy parents are not? gina: i was not. my dad worked his whole life at a watch factory. rhode island was once the jewelry manufacturing capital of america. my mom stayed at home with three kids. i grew up in a small house. there were six of us, my grandfather lived with us, he was an italian immigrant. i joked when i went to harvard, i was so excited because i got my own bed. because i shared a bed with my
sister until then, so we were a working class family. we weren't poor. my dad lost his job in his late 50's, so things got tougher after that, but we were just kind of working class rhode islanders. david: rhode island is a small state. everybody must know everybody because senator reid from rhode island says he was your babysitter at one point, is that true? gina: it is a fact. he was my next-door neighbor and we went to the same high school. by the way, as did thanh downlink, former national security advisor, -- tom donlon, former national security advisor, and mike donlon, we all went to the same high school. we all knew each other. the donlons and my family, we all made a living working at the same summer club on the same beach. david: they are all talented people but only one of them became a rhodes scholar and that was you. gina: that would be me. david: only 32 are picked every
year and then you went to law school. so what they harvard degree, and oxford degree, and a yale degree, why did you go back to rhode island? many people go to new york, washington, los angeles. what propelled you? gina: i loved it. i loved the place and i felt i owed something to the community. there is something special about building businesses in the community where you are from, and seeing them flourish in a community you care about. david: so you ran initially for secretary of treasurer of rhode island, why would you want to be treasurer? people would not say oxford, yale, rhode island treasurer. gina: it is funny when i ran that is the reaction i got. i called my parents to say i was doing this, and they said, gina, you have such a good job. my mother started to cry. politics was such a dirty business. i believed in service.
i qualified for the job, i had a finance investing background. i was chair of the investment committee, and i believe in service. david: but when you got the job, he started cutting pensions and that was very controversial. why did you do that and how did you take that opposition and that enabled you to become governor? gina: i did not cut pensions, everyone kept what they earned. the system is broken. for better or worse, i was able to do the math and understand very quickly that the system would run out of money before too long and we would have to go to people and say, i'm sorry, we are going to cut your pension in half. it was dishonest. i could not live with the dishonesty of telling teachers and firefighters that their pension would be there when i knew it would not. we fixed it, by the way. the pension system today is
stronger than it has been in decades. everyone said i would not be reelected, but i was because i think people want the truth and i think people want people like me to solve problems. david: you are reelected, and then you were elected governor of rhode island. many people said you would not be elected governor, reelected as well. so you are governor of rhode island, and many people thought you could be running for president this time, you chose not to do so. why did you decide to give that position up to become secretary of commerce because in rhode island, you were the 800 pound gorilla, because you are the governor, and a lot of power, and you are very powerful and the governors associations. and secretary of commerce is the great job, but you are not the president. why did you decide to do this? gina: because i wanted to be on the team that helps america build back. in many ways, we are really struggling right now.
as a nation, as an economy, and i want to be on the team that gets us back on our feet. that was very appealing to me. david: you were governor, you were treasurer but you were actually in the venture world, i think. gina: yes. i was. david: what was it, you started your own venture fund? gina: yes. for about 11 years, i was in the venture capital business at first at a firm and then with the cofounder of pointe judas capital, we were in early-stage venture firm. i focus on health care, which i loved, actually. that experience enabled me to be a better commerce secretary. i know entrepreneurs, what it takes to have innovation. another thing we run here is the patent process. that is in commerce. i saw that strong patents matter to protect innovation.
david: the secretary of commerce is an unusual position. you have so many different parts of the commerce department being called by some as noah's ark because you have so many different things put together. noaa is here, the weather bureau is here, so many things. gina: space commerce. david: so when you took the job, did you realize how many different disparate things that you have to deal with? and did other secretaries of commerce who had this position before say, this is what you have to worry about? gina: i talked to many and i got terrific advice. i think that is what makes the job fun and hard, it is hard to learn about the details of fisheries, fisheries management, trade, census, space commerce, tarriffs, semiconductors, but for me it is intellectually fascinating. i would like to think if you put your back into it, you can have a big impact across a whole range of topics.
david: let's talk about your job of secretary of commerce. one is to represent the president's views to the community and the other is to represent the business community . both are not easy. do you have those two perspective as well? do you cs yourself a liaison to the community and the presidents liaison to the businesses you
mark gina: i think it is important that the business community know that we want to hear from them. i am very available to the business community and we want engagement. i bring the information to the president who by the way is genuinely very interested to know what do we have to do so american businesses can compete. david: right now, there is a shortage of semiconductors that appears in the united states. is that because of supply chain problems, covid, and what are you doing and the president doing about this? gina: supply chain problems. we have to shore up our supply chain. we have become overly dependent on a few suppliers in a few countries, and we need to make investments. what we are doing is working with congress to pass a $50 billion semiconductor supply chain fund so we can incentivize
semiconductor companies to manufacture chips in america. david: when you were looking at the campaign, we looked at the campaign, president biden did not support a lot of things that president trump did, but some people are surprised that he is kept tariffs in place. you oversee the tariffs. the steel tariffs that he put in place are still there, the tariffs on aluminum are still there, and the tariffs on products from china are still there. is there any insight on why they are still there? gina: although we do not agree in the way that the trump administration handled many things, one of the things is they brought to light the fact that our competition with china is serious, it is a strategic competition that will define our time, and president biden agrees with that.
we are going to continue to play tough with china. we are going to continue to use all of the tools at our disposal to protect american workers and businesses from unfair practices by chinese government. the reason that we have not made those changes is really that, we need to continue to be aggressive with china. david: european countries are not happy with the tariffs on steel and aluminum, and the president is going to the g7 summit soon. do you expect we will see any news relating to those tariffs? gina: i expect robust discussions between now and then. the europeans are not happy, i have had many discussions with my counterparts in the eu and they are our allies, europe is not a threat to american national security. china's oversupply and flooding their market and our market with cheap steel, that is a national threat and we need to work with
europe to prevent china from doing that. david: some of your predecessors have done trade missions, and right now you cannot do that because of covid, but the administration has said, we do not want to greater access to foreign markets so people can build factories overseas. we want them to build them here. is that part of your ethos, to build more here? gina: we need to do both. i plan to be active in export promotion. we need to help american businesses to export. we do need to continue to have free markets, even with respect to china. we need to do business there, we need to export there. but, right now we need a domestic focus, and so for at least the first 18 months, a lot of my focus will be domestically.
david: you have been running the department somewhat remotely because we are in the department and they live people are not here. do you expect that people will come back and you will go back to the way that people work before? gina: maybe not five days a week every week, but predominantly, yes, back in the office. it will be like business. i think work from home is here for -- here to stay for a certain part of the week, but look around, this is a ghost town. i hope a few months from now you will see some vibrancy here. david: if the american people are watching, they do not know much about the commerce department, what would you like people to know about the commerce department and what your principal goal is? gina: to help more people get back to work in decent paying jobs. it is really very simple. trade policies, level the playing field so american workers can compete, ip policies that allows innovations to
continue, helping start up companies so they can evolve, but all of that fundamentally at the end of the day, i learned this as governor, david, americans do not want a handout. they just want a chance to have a decent job. i am obsessed with that, i was obsessed as governor, i am obsessed with that now and that is when everything i will do will be through that lens, creating decent jobs. david: when you decided to take this position, you called your mother and said guess what, i'm eating up being governor of rhode island, i will be the secretary of commerce, what did she say? gina: she was excited. she is 90 now and she said, i hope you can help biden. biden has to be successful and i hope you can help them. -- help him. ♪
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