Secretary of Transportation Pete Buttigieg appeared on “State of the Union” with Jake Tapper to discuss the “growing supply chain nightmare” facing the Biden Administration as ports, railroads and trucking industries brace for a deepening crisis.
The Transportation Secretary said Sunday that the supply chain issues were likely to get worse before they got better, continuing into next year. Buttigieg said that demand for certain products was also contributing to the supply chain crisis.
“Demand is up, because income is up, because the President has successfully guided this economy out of the teeth of a terrifying recession,” he said.
Consumer prices in September 2021 were 5.4% higher than they were in 2020.
David Blanchflower, Professor of Economics at Dartmouth College, recently pointed to comparable warning signs in 2007 before the start of the recession. “By the Spring of 2007 qualitative data pointed to a recession coming in a few months and this was ignored,” he says in a recent report by Forbes. “Today we report equivalent evidence for the U.S. showing comparable declines suggesting that the US is entering recession now, at the end of 2021.”
Though Buttigieg argued that unprecedented demand was driving the supply chain issues, ABC News reported that analysts argue that the lingering effects of COVID-19 mitigation strategies essentially reduced the production of goods and services, and the supply-chain shortages now happening are the result of struggles to return to pre-pandemic levels.
“The result of that imbalance between supply and demand eliminated all the inventory and eliminated all the grease that allows the wheels of commerce to work smoothly,” said Steve Ricchiuto, chief U.S. economist at Mizuho Securities.
Many American companies, Tapper pointed out, especially small businesses, are struggling to cope with this imbalance. He further pressed the Transportation Secretary on the Biden Administration’s plans to lift Trump’s tariffs on China as a means to provide some relief.
Buttigieg said that every idea is being taken seriously and that right now the administration’s focus was on the operation itself.
“A lot of Americans might be surprised to learn our ports have not generally operated on a 24/7 basis. We have secured commitments to change that.” he stated, explaining that it wasn’t just the ports, but “getting containers on a chassis and speeding up the processes to get more qualified truckers on the roads.”
All of these issues, Buttigieg told to Tapper, are indicative as to why the infrastructure bill needs to be passed.
The $1 trillion infrastructure bill was passed by the Senate on Aug. 10 but is currently sitting in the House as Democrats fight to couple it with a $3.5 trillion budget resolution.
“America needs both pieces of legislation, not only to make sure we have the right kind of infrastructure, but to make sure that life gets better for the people trying to raise children,” he said. (RELATED: Democrats Defend Buttigieg’s Secret Paternity Leave)