Republican Senator Rob Portman of Ohio said in an interview with Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend, that he expects the U.S. Congress will pass legislation next year strengthening President Barack Obama’s hand in winning approval of trade deals.
(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
AL HUNT: We begin the program with Senator Rob Portman of Ohio. Senator, thank you for being with us. You were one of the Republicans who voted for the small compromise on the budget, although you said it wasn’t nearly sufficient. Let me ask you this to start. Was this a one-off marriage of convenience? Or is this the start of maybe something - some kind of collaboration?
ROB PORTMAN: You know, it’s been analyzed both ways, Al, and I hope what it is, is a first step toward further collaboration, because our country’s in trouble. You know, we have a fiscal crisis looming. We still have an economy that’s too weak, and we need to work together to solve these problems.
So I like to view it as a very small step, a baby step in the right direction. It did reduce the deficit a little bit. It did it without raising taxes. It kept us from going into a government shutdown in January, but also in September of next year. And finally, it put the United States Congress back on track to do appropriations bills.
HUNT: Let me get to some of the things you want to do in just a minute, but, first of all, when you get back, staring you right in the face within a month or so is the debt ceiling.
HUNT: Democrats say clean debt ceiling, we don’t want to rattle financial markets. You have said that this is a chance to get more serious.
HUNT: What do you want to put on the debt ceiling? What’s the condition for Rob Portman supporting the debt ceiling?
PORTMAN: What disappointed me in the budget agreement that I reluctantly supported, because I wanted to avoid another shutdown and for the other reasons we just talked about, is that it did not address the underlying problem. And it’s so obvious. The problem is that two-thirds of spending, as you know, is on autopilot. That part of our spending goes to 76 percent in the next 10 years. It’s where all the growth is. If we don’t address it, it will bankrupt the country.
These incredibly important programs, like Medicare and Medicaid and Social Security, are not sustainable in their current form. We’ve got to get at those. The only time we’ve done it in the last three decades, Al, has been through a debt limit discussion.
PORTMAN: So let’s use the debt limit, not to spook financial markets - in fact, to give them more assurance we’re actually going to do the right thing.
HUNT: But you have to do something to get Republicans on board?
PORTMAN: I think we have to do something to deal with the underlying problems.
HUNT: And you have said - this is a - let’s start with entitlement reform, as you said a moment ago, and you said, you know, means-testing Medicare. Now -
PORTMAN: That’s a start.
HUNT: - Obama has at least been receptive to that in a general way. Would you be receptive, on the other hand, of, say, closing tax loopholes as part of the package?
PORTMAN: Well, let’s look at that logic. To say that we need to close tax loopholes, which generally is viewed as raising taxes on the wealthy -
PORTMAN: - although, as you and I know, it’s a lot of businesses, to do something that actually reduces benefits for the wealthy doesn’t seem to be very, very logical. Why would we have to raise taxes at a time when the economy is too weak on wealthier people in order to cut benefits on wealthier people?
HUNT: So that’s a deal - that’s a deal that Rob Portman would sign off on?
PORTMAN: Well, it just doesn’t make any sense. There’s a logic behind that. Now, what Democrats have said with regard to Social Security, changing the formula, which is what the president had proposed in his budget, that that could hurt seniors who are poor or very elderly, I get that. We need to be careful about that.
But this notion of means-testing is that, in Medicare, you know, those who are on Medicare, pay taxes, that’s true, through payroll taxes over the years, on average people pay a dollar in taxes for every three dollars they get back. So all I’m suggesting is people - over $175,000 a year, a couple -
HUNT: Start there?
PORTMAN: - start to pay a little more for their premiums in Part B and Part D. That saves a lot of money over the long haul, and it’s the kind of thing we need to do.
HUNT: Let me get you to put your former U.S. trade representative hat on.
HUNT: Big news this week. Max Baucus, chairman of the Senate Finance Committee, is going to be designated as the ambassador to China.
HUNT: He’s been the leading Democratic voice in the Senate on trade. What effect is this going to have, if any, on any trade legislation next year, fast-track or the Trans-Pacific? Will anything happen?
PORTMAN: Well, I talked to Max Baucus about this yesterday. One, before he leaves, we’re going to get some stuff done, I hope.
HUNT: On trade?
PORTMAN: There’s certain - on trade, including moving trade promotion authority forward. The president wants it. I’m glad he wants it, Al. This is the first administration since FDR that didn’t want it until March of this year.
HUNT: And you think you can get that done before Max Baucus leaves?
PORTMAN: I’m hopeful that we can. You know, sometimes these confirmation - confirmations take a little while. And hopefully we can get that done.
HUNT: How about Trans-Pacific?
PORTMAN: The TPP, which is the Trans-Pacific Partnership - a lot of alphabet soup here - I think has to follow TPA. I don’t think that the United States can negotiate the final agreement without letting countries know that we have a fast-track way to get this done for a yes-or-no vote on the floor of the House and Senate. So I think you have to start with TPA. That’s certainly been the experience over the years. So let’s get that done first. Then I think it’ll be easier to deal with the Trans-Pacific Partnership.
HUNT: Max Baucus also was the Democratic - foremost Democratic champion of some kind of tax reform, working with Dave Camp in the House. That’s pretty much dead now, isn’t it?
PORTMAN: No, actually -
HUNT: In this Congress, will we have big tax reform?
PORTMAN: On trade and taxes, I would also make the obvious point that Ron Wyden is the likely successor as chairman of that committee. I spoke to Ron about this today, in fact. He is very interested in the trade agenda, always has been. He believes in trade. He thinks we ought to knock down barriers to trade. I worked with him when I was U.S. trade representative.
And on tax reform, you know, Ron’s been very aggressive on that. In fact, he has his own tax reform proposal that lowers the rate and broadens the base.
HUNT: But you don’t think you can get it done in this Congress, though, do you?
PORTMAN: Well, not this year, certainly, but next year, I think if Dave Camp and Ron Wyden join forces, as he and Max Baucus were starting to do, I think it can still happen. I think it is unlikely to happen right after the first of the year, which is what some of us thought might be the timeframe.
PORTMAN: I think the House has to report out a bill first, and probably that doesn’t happen until the springtime, and then I think the Senate under Ron Wyden’s leadership with the Finance Committee and Orrin Hatch, who’s very interested in tax reform, I think we have a shot at it. And if we don’t do it, Al, we are hurting American jobs, because right now, our antiquated and inefficient tax code makes it more advantageous to be a foreign company than to be a U.S. company. That makes no sense.
HUNT: Let me turn to the Federal Reserve. Ben Bernanke began tapering this week. Is he making the right move?
PORTMAN: Yes. Yes. I’m worried about a bubble forming if we don’t begin tapering, so -
HUNT: Is he doing it at the right speed?
PORTMAN: Well, we’ll see. The numbers just came out, as you saw, today indicating that our GDP growth in the third quarter was higher than expected. A lot of it was inventory, so we’re not sure how much to trust that, but I do think that we have to begin this tapering. We’re unprecedented in terms of the Fed balance sheet, and also having the overnight rate be at zero, basically there’s no flexibility for the Fed to be able to respond to the possibility of going into another recession. So I think it’s appropriate.
HUNT: Let me ask a question about your party. The Republican Party in the last couple weeks is seen as opposing an increase in the minimum wage, favoring slashing some food stamp benefits, not extending unemployment insurance for the chronically jobless. Whatever the merits of all of those issues, which - you know, it can be debated - isn’t it creating the image of a party that doesn’t do much for the working class?
PORTMAN: No, I think it’s creating an image of a party that cares about jobs. I mean, I think unemployment insurance is something that actually a lot of Republicans do support. I’ve supported it in the past. I would probably support an extension again, but it’s got to be an extension that, one, is paid for. The Democrats wanted to stick it on this budget agreement without paying for it. At least that was the rumor. We’ve got to be sure that we’re not taking ourselves further into the hole at a time of $17 trillion debt.
With regard to minimum wage, Republicans have made the very simple point that when economists look at this, what they say is, you’re actually going to knock people out of the workforce who currently have a job, partly because a lot of these young people - by the way, more than half of the people who are on minimum wage are young people.
PORTMAN: These are 18- to 24-year-olds who are desperate to have a job because the unemployment number is about 25 percent for them. So what we don’t want to do is to knock more people off the job rolls. We want to get more people at work, get higher pay, get more benefits through a growing economy. That’s what the Republican Party stands for. It’s certainly what I stand for. And that helps middle-class workers.
HUNT: Senator Portman, let me close by asking you a political and personal question. Earlier this year, you reported that your son was gay and that you had changed your position and you now support gay marriage. Nine months later, what’s been the political fallout? And really more importantly, what effect has it had on your family?
PORTMAN: Family’s doing great, first of all. I’m very proud of my son, always was, and even prouder, if that’s possible, of him now. He’s doing great; family’s doing great.
Look, the politics of this are going - are going to be mixed, as is with every, you know, sensitive issue. But overall, you know, I’m getting very strong response. I still focus, Al, as I always have, on the economic and fiscal issues -
HUNT: I know you do, but on this one, more positive than negative?
PORTMAN: Definitely, from what I’m - what I’m hearing. And the country’s moving quickly on it, too, particularly young people. When I go to colleges and universities now, instead of, you know, being criticized for that position, it’s sort of an issue that, frankly, a lot of young people don’t think is a big deal one way or the other and they’re, therefore, more willing to listen to me on other issues, like the fact that they’re the ones who are going to get left hanging out there and holding the bag on the debt and deficit - they’re the ones that are facing this tough job market, and we need pro-growth policies to better deal with those things. So it’s almost a threshold issue for a lot of young people. And once you get over that threshold, you can then engage on some of the more economic and fiscal issues that do affect them and their future.
HUNT: Well, Senator Rob Portman, happiest of holidays to you and your family.
PORTMAN: Thank you, Al.
HUNT: Thank you so much for being with us.
PORTMAN: My pleasure. Good to see you.
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