Welcome back.

Our one on one guest this week is U.S. Transportation Secretary and Traverse City resident Pete Buttigieg.

Does he really want to be Michigan governor?

Our lead story, Governor Whitmer expects a tax hike recommendation from her panel on how to grow Michigan.

On the OTR panel, Kyle Melinn, Clara Hendrickson and Simon Schuster.

sit in with us as we get the inside out, Off the record.

Production of Off the Record is made possible, in part by Martin Waymire, a full service strategic communications agency, partnering with clients through public relations, digital marketing and public policy engagement.

Learn more at MartinWaymire.com.

And now this edition of Off the Record with Tim Skubick.

Thank you very much.

Welcome back to Studio C, on Off The Record, a semi busy week in our town as we approach the holidays.

The governor is prepared to get a tax hike recommendation from her growth panel.

The governor's much publicized Population Growth Commission has not finalized its recommendations.

However, even before she appointed the members, the House Republican leader Matt Hall, was certain that the commission was being used to raise taxes.

For example, the commission is looking at boosting school funding by $3 billion and there is language in the draft reports that suggests new revenue or a tax hike just might be needed.

The governor says that's probably true.

I believe that to be probably necessary.

But like I said, you know, I hoping that this commission has done the full work that the executive order contemplated in terms of staking out the blueprint, recognizing what it's going to take to get there and making recommendations about how we go about it.

On another front, after the legislature passed a no fault reform bill, the Michigan Supreme Court tossed out part of it that reduced fees for those who are catastrophically injured.

The fee reductions were 45% and the injured protested to lawmakers that that was hurting them.

And the Senate and House have now tried to come up with a compromise.

The problem is the governor's insurance department has some problems with the changes.

The department has some ongoing concerns that I think that they are happy to try to work out with the House.

And I would anticipate that this conversation continues into next year.

You want to get.

I'd like to get something done.

The governor herself has never proposed her own solution and admits she has not been, quote, knee deep in this up until now.

So, Simon, a tax hike from this commission.

Surprise, surprise.

Sure.

I mean, I think we've known from the get go that this the existence of this commission was aimed at taking the really big bite of the apple.

And in a way, it's helping because for the Democrats in the majority in the legislature, for the governor's office, it allows them to offload these potentially politically inconvenient realities if they want to address these structural, systemic issues, that that's going to require revenue.

But they don't necessarily want to be the ones that have to say it.

Not a surprise at all that tax hikes are probably going to be required.

The money is going to have to come from somewhere to pay for big ideas to obviously tackle one of Michigan's biggest challenges.

I think the surprise here is that this council hasn't even talked about how to fund its proposals, which are due next week.

I revisited the executive order to see what it spells out and it does require them to talk about how to fund it.

If there's a gap between what they're proposing and the revenue that Michigan is dealing with, they have to put forward a solution on that front, though.

Well, we see another council taking the blueprint and actually trying to figure out how to pay for these things.

That's my.

Question.

Are they afraid of none?

Nobody in this city is running for president of the United States.

Okay.

There's no political liability.

Why don't they just belly up to the bar and say, here's what we want to do?

What's the what's the fear?

That's that's a great question.

And to Simon's point, in some ways, the benefit of having a council is to sort of take the politics, de-politicize it.

None of these people are elected leaders.

They're not facing tough reelection battles.

They can have the tough conversations about funding.

And it seems like they've kind of just punted.

Well, that's assuming that they have free rein to lay out whatever the heck they actually want to lay out.

Or it could just be that this thing is a tightly scripted front to advance the policies that the governor wants to advance anyway.

I think that we can talk about the tax increases, but I think this is more about kind of the general vision and given here the cover when she goes to the state of the state address to say, you know, if we want to improve as a state, these are the things that we have to do and tax increases are probably part of it.

But it's also because we've gotten all this infusion of federal money because of COVID and we've got programs and an enormous budget that we've never had the size of before that has to be paid for.

And, you know, if you want to continue getting things like a free school lunch for and breakfast for every kid, do we have the school aid fund and the existing tax revenue to pay for that if we want to continue the infrastructure money that the Biden infrastructure plan has laid out for the next few years?

How are we going to do that well into the future?

We don't have the existing revenue for that.

So you need a council to kind of lay that down.

And I think that the reason why we haven't gotten a lot of access is because the answers may have been scripted from the beginning.

Well, I mean, the governor basically gave them their marching orders.

I'm not going to I don't have any proof.

I think it's I think it's it's very possible.

Well, let's let's assume that they do say something of substance and we put it in the legislative hopper for four months or so is in this D.O.A., because it's not going to go anywhere and get a Republican vote on it.

Yeah, And I think to his point, I don't know if this commission necessarily feels obligated to prescribe where this revenue is going to have to come from.

Of course, that will be more frustrating for the administrative decision.

Yeah, certainly.

But if they just say we need more money and they don't get drew into the specifics and say where this needs to come from, I think that's going to be all that much more difficult for the administration and for the legislature, because then it puts the ball back in their court.

Well, the House is tied at 5454.

Do you see 56 votes coming out early in the first year to do this?

No, not until those seats are filled.

But it does raise sort of an interesting discussion for Democrats to have in the meantime, which is that they've they've started off by cutting taxes for low income families and for retirees.

And now they're potentially in the position of having to raise taxes.

Now, they've been totally comfortable approving billions in corporate subsidy spending.

But now the question is, what is the money that they're comfortable raising?

Is it a tax on corporations?

What is it to fund the kinds of investments that can learn, not companies to the state necessarily, but specifically people?

Wouldn't it be interesting if out of this discussion resurrected out of the fire, the PHENIX, the graduated income tax?

Oh, I mean, I think that's very possible.

I mean, why there's no repercussions for them to announce anything that isn't drastic or, you know, something revolutionary or something that's regurgitated.

I mean, there's really no reason why they can't do that.

And it's all a starting point anyway.

Even if they even if they do something like that, it's just a conversation starter with the Republicans who have had tax increases like the Chatfield plan on on fixing the roads three or four Was that four years ago?

I mean, the Republicans have come up with ideas.

This is just a conversation starter under the guise of Don't we want to improve the state, don't we want to make it bigger?

Do we want to invest or bring in, you know, young Gen Zers and millennials to come in and raise their families and become taxpaying citizens?

I mean, that's the whole premise of this thing.

And in order to draw them in here, we've got to make this a better state.

How do we make it a better state?

We're going to follow this vision and this is the vision that we're going to use.

It just happens to be the same vision that I wanted in the first place.

Well, the.

Democrats have traditionally for years, argued, Simon, that the beauty of the graduated income tax is basically it's a serious issue.

If you make more money, you pay more money.

So they could come up with their new revenue for these programs without having to hit the middle class.

Yeah, And, you know, I think moving forward, this is somewhere where there might be a little bit of pressure within the Democratic caucus.

You have a progressive wing of these caucuses in both the House and the Senate.

It's big time.

Yeah.

And I think they're a little bit frustrated because they're looking for these mechanisms, these policies that address economic justice.

And they haven't seen those so far, at least not to the extent that they want them.

If from this legislature.

A graduated income tax, though, I mean, that's such a a killer like I like the reform.

That's such a hard No.

And I don't even know if you can sell I don't even know how that polls.

I don't even know if that's if that's just a conversation starter.

So we can think of something else or if you're really serious about that, is that I don't know.

I can't imagine that that polls very well.

It is something that I think Joe Biden was able to successfully run in 2020, but only by really casting as a tax increase on the very tippy top of earners.

So I don't think that is something where, you know, you're making 5000 thousand dollars a year that you're going to see that big bump.

I think that there's there have to be a tick up really at the end of the income spectrum to make very visible.

Does anyone else remember in Whitmer's first budget, she proposed expanding the corporate income tax to pass through entities.

Last year, only 14% of businesses in the state pay a corporate income tax.

There's an idea on the shelf that, you know, could be.

Done and that falls in line with the agenda at the beginning of the year of undoing all the Snyder administration policies, undoing, you know, when Snyder came into office and doing that business tax that they really decried so much, you.

Know, albeit in the context of an election year, which means they'll do nothing.

All right.

Let's let's talk about the immunity bill, the drug immunity bill.

After years of trying, the Democrats finally got rid of it.

How does this work?

Yeah, over 20 years, more than 19 bills introduced to do this repeal the law that's seen as one of the toughest in the nation for consumers to overcome when it comes to bringing liability lawsuits against drug manufacturers that have products that harm consumers.

So it seemed like it was easy to pass the time, you know, as all these roadblocks year after year and it finally got done.

Can somebody explain why?

The logic here is interesting.

The car companies can be sued for having an unsafe car.

Right.

Why were drug companies sacrosanct and not to be sued?

Why did they need to be protected?

I think we have drug companies in Michigan, and I think the idea was, is that if we create this atmosphere that we're going to have more drug companies and it will become kind of this pharmaceutical mecca.

But I don't know if it really turned out that way.

And I think the Republicans have figured that out.

I mean, we still have Pfizer.

We've had Pfizer.

But no, you know, Johnson and Johnson and everybody else hasn't followed suit.

And and now you look around and now my constituents are getting hurt by this.

And now I'm getting the mail.

And so now you get Republicans actually voting for it, not only voting for it, but arguing for it on the floor, which like 15 years ago would have would just never have happened.

They'd have been booted out of the caucus.

Exactly.

What do you mean?

Over the last five, six years to the opioid and fentanyl crisis has released a lot of reached a level of prominence that we haven't seen before in the United States, especially when you see these lawsuits coming down where, you know, the Purdue Pharma is being forced into bankruptcy, Michigan becomes cognizant that this is something where, you know, we have a blindspot.

Well, of course, the argument that Republicans back in the day always said, well, this is just a trial lawyer, Bill.

They just want to be go out and sue everybody and under the sun.

Well, sure.

But what we've seen is that it's hampered attorneys general efforts to try and make sure that Michigan benefits when there are these large settlements.

So there's money on the table for folks who've been harmed.

And that kind of became crystal clear.

And it turned out to be quite easy to get this done this time.

And no states ever followed suit either.

I mean, you know, you can sometimes you can be a trailblazer for things like that.

And then all of a sudden you see like red states follow or whatever.

No states followed.

We were it.

And so, you know, when your people are kind of on an island and not getting some of this money, it's kind of hard to quit.

If the governor made a reference to the no fault trying to find a solution.

What's going on there, quickly, Simon?

Yeah, So, I mean, this is something that's long been percolating within the house.

You know, there's very active, invisible victims of that aren't getting catastrophic care to the level that they had previously had under this.

No fault reform.

And so they're calling for reform to no fault reform, especially in regards to these most egregious cases and things that are very emotional.

But at the same time, the governor, who really needed to chalk this up as a political win in 2019, has distanced herself from really talking about I'm getting in the nitty gritty of what was they thought what she saw was a big policy win in her first year in office.

Is it the right premise the governor proposes and the legislature disposes?

Yes, she has.

Apparently.

Then she doesn't seem to be all that involved, at least not now, which I guess is a surprise there and certainly a sense of urgency to tackle this issue.

Democrats said that they want to get this done.

They don't want to go another year without tackling it.

But there's also probably a pressure to get it right.

This is a fix to the fix.

Does anyone really want to do a fix to the fix, to the facts?

Well, and the other thing is, too, I mean, for Governor Whitmer has been always been good about kind of broad strokes in a general direction, but she's never been good about the nitty gritty.

She was not the original proposal for the reduction of auto insurance rates to begin with.

So that was not dragged.

To the table.

Exactly.

And so then she signed it.

She was able to take credit for cutting insurance rates and everybody getting that check.

Remember, we all got the check from the catastrophic claims fund.

So she doesn't want to be the one who is the architect of, you know, all of a sudden, why isn't our wise our bills going up?

Why all of a sudden is that charge going up?

But at the same time, she doesn't want to be the person in charge of overseeing all these quadriplegics who are now being stuck in emergency rooms.

She doesn't want to see that either.

So she she's trying to distance herself from because she doesn't want to be seen as the person who's muddled in it.

So if the legislature brings her a good idea that that saves face.

I'm all for it.

Are the Republicans playing ball on this?

Are they willing to dive back into this and make adjustments?

Yeah, I mean, it seems like there's somewhat of a willingness, but I wouldn't necessarily say that this is something where there's a broad degree of, you know, desire to fix it.

You know, there's the insurance companies are fine with the way things are.

All right.

Let's now pause and we'll go to this interview that we did with Pete Buttigieg at the Kellogg Center last week.

And thanks to you for all your insightful analysis, as always.

Mr. Secretary, first of all, thank you for doing this.

And also our thanks to Governor Blanchard for his kindness in arranging this.

Let's start with the tough question.

MSU Spartans or fighting Irish?

No, that's not a tough question for me.

I'm delighted to be an adopted Michigander, but the Irish are always going to be my team.

That's a punt.

No, it's an honest answer.

All right, let's let's talk about EVs.

Oh, look at the middle class is not falling all over itself to purchase these vehicles.

Is that a fair statement?

Well, you know, these are certainly something that are still early in their adoption.

Our goal is to have about half of the new sales of vehicles be EVs by the end of the decade in order to get there.

Two things need to happen.

First, they need to get less expensive, which is why the policy of this administration has been to take dollars off the price tag of those EVs.

The second thing is we've got to make sure there's chargers everywhere.

You need them.

A majority of Americans will be able to charge at home if they have a single family home or garage.

But that's not everybody.

Not everybody will be able to charge at home or at work, which is why we need a nationwide charging network.

If we do both of those things and continue to push that, then I believe that we will meet our goals for EV adoption.

That's going to have benefits for the economy as well as the climate.

Would you concede that Mr. and Mrs. America are just not excited about this?

I think most people who drive one are excited.

Yes, but that's the minority, sir.

Well, I don't think that's true.

I think that.

It's not the majority.

People.

The majority Americans don't own a TV yet.

Sure.

And again, our goal is that we'll begin to have a majority of Americans owning a EV by the early 2030.

Right now, we need to make sure we pick up the pace of adoption by making them less expensive.

Now, there's one other thing, and the thing that we're very focused on right now about EVs, let's be very clear.

The automotive industry is going EV with or without us.

That's unquestionably the future of the industry.

The question is, will it be made in America?

And as a child of the industrial Midwest, who knows how important auto jobs have been to the development of our economies?

I believe we need to act.

And the President believes we need to act to make it so.

Now, under President Trump, China was allowed to build an advantage in EVs.

We're working to make sure that the U.S. maintains the advantage on EVs, just as the US had the advantage on the old car technologies in the last century.

I mean, let me just read you some numbers.

Here are the stats on the demographics of purchasers of EVs.

87% white people, 57% people, over $100,000.

And watch this, People age 57 to 75 are least likely to buy this car.

You're in trouble, Mr. Secretary.

Well, certainly older Americans tend to be less likely to be the first to adopt newer technologies.

That's okay.

But that's not okay.

That's a huge part of the of the whole demographic.

Again, our goal is that about half of new car sales will be easy, but.

That is not realistic.

Well, we're going.

To have to make sure that we act to be ready for that goal, not just for climate reasons, but for economic reasons.

Now, they're not for everybody today.

That's fine.

The truth is, America isn't ready for everybody to buy an EV tomorrow.

But as they continue to become more affordable and as that superior technology continues to be something that more and more Americans experience, because when you drive one, you can tell that it's better, then we're going to see more and more adoption.

Then we've got to make sure the grid is actually ready to handle it and our supply chains are ready for us to make more of those EVs in America instead of importing them from abroad.

Do you own one?

So we've got a plug in hybrid.

It's a Chrysler Pacifica.

Never thought I'd be a minivan guy, but becoming a parent does that to you.

And, you know, we plug it in the garage in our house in Traverse City.

What it means is that for the first 30 or 40 miles, it runs electric, which is most of our driving flips over to gas when we go more than 30 or 40 miles and that's a solution that a lot of American families, I think will find saves them money on gas while allowing them that flexibility for things like longer road trips.

Right.

There are some danger signals on the horizon for just announced that it's reducing reducing the size of its plant.

And Marshall, General Motors says, you know what, Maybe you want to take another look at those hybrids.

That does not sound to me like a ringing endorsement that the industry is all in on this.

Well, again, there's no going back any more than we're going back to rotary phones.

The question is, how quickly will it happen and how much will it be made?

How are you going to.

Convince them to get in the game?

Sounds like they're backing out.

Well, no.

They're not reversing course any more than it is.

Changing course.

They're adjusting their pace, but they are no more likely to abandon electric vehicles than phone makers are to go back to rotary phones.

There is no going back.

And we can't afford to go back because if we fail to lead this, I'm convinced that China will and the jobs will go with it.

Well, the big problem is Tesla's got 60% of the market.

You can't buy enough TV commercials to sell enough EVs to get 60% of the market, right?

Well, it depends whether you define the market as the EV market or the vehicle market in general.

Now, Tesla led the way, and I don't think we'd be here as a country with all the EVs and chargers we have if it weren't for Tesla's leadership.

But now what we see is some of the most traditional names in automaking moving in the same direction because again, it's abundantly clear what the future is.

Not a question between whether you're making EVs or whether you're making gas cars forever.

It's a question between whether you're making EVs or whether you're left behind.

And as a child of the home town of Studebaker, a company that went out of business in 1963, and when I became mayor in 2011, we still hadn't recovered.

I know the cost of what happens to communities when a company is unable to keep up with the times.

So you think you hit that 50% mark?

I believe you can, but it's not going to happen on its own.

Again, the future of the industry is going to new technologies.

We're not going to be able to, nor should we want to be trapped in old technologies.

The big question is, can we do it quickly enough and can we make sure it's made in America?

President Biden, I can tell you from being around him a lot is obsessed with making sure that more jobs are taken right here in America, that we are exporting products and importing jobs rather than the other way around.

And the future of the auto industry is going to be one of the most important parts of that story.

And Donald Trump is obsessed with not making it work.

Yeah, look, he did a lot.

To help China build an advantage with electric vehicles, which in some ways we're still recovering from.

But I believe we will.

America led the way before we're going to lead the way again.

Let's talk politics.

When you heard the Debbie Stabenow was retiring and shocked this political town, even for a moment, did you see U.S. senators Stabenow was out?

Maybe I'm in.

You know, I'm so focused on the job that I've got.

Of course, anytime... All I ask, did you think about it?

You know, it crossed my mind.

If people ask you questions and, you know, she's somebody I deeply admire and a lot of very important things obviously take place in the United States Senate.

But I know the job that's on my plate right now, and it didn't take me long to to know that as much as I care about that seat being in the right hands, those hands aren't mine.

I've got a job already and I'm going to keep doing it.

So when it crossed your mind, what did you think?

Well, look, anytime you think about your future, you you ask, where do you belong?

And I know where I belong at the pleasure of the president of the United States is in this cabinet working on transportation policy, trying to see through so many of the things that we started in the President Biden set in motion.

So how does Governor Pete strike you?

You know, I've got one job.

I've got two titles that really matter to me, one as father and the other as secretary.

And those are keeping me busy.

How many times a day you could ask the presidential question?

No, not that many, because most of the time I'm environments where the question I get is, how are we going to get this airport built?

Are you going to fund this tunnel that we've been wanting to do for 100 years?

What's it going to take to get this road fixed?

You know, those are the kinds of things that that occupy most of my time and attention and seem to account for most of the phone calls that come into my phone, too.

What did you learn from your mom and dad, value wise, that you still carry with you today?

My parents were very are very values driven people.

You know, the news was always on in our house, not because they were politically connected.

I don't think I met an elected official.

Certainly while I was at any point while I was a kid, but because they believed that the decisions that were made in our capitals, our state and national capitals and in the halls of power affected people's lives in a very real way.

And that so much of what was at stake is how the most vulnerable are made better or worse off by the decisions of the most powerful.

And those kinds of values stayed with me in ways that I didn't even fully understand as they were being formed, but now shape the focus that I try to bring to this job where we know that if we get transportation right, it connects people to opportunity, it connects people to a better life, and it can close gaps in opportunity and wealth.

And if we get it wrong, it can make life harder for people who already have it harder than they should.

Were they tough on you as a parent?

They had high expectations for me morally, as well as academically.

And.

Did you in that?

Well, you know, every teenager has their moments where they they bristle, told to serve some of their loved ones.

I wouldn't go that far.

But, you know, I grew up in a household with a lot of love as well as very strong values.

And I think about that a lot as chastity.

And I try to create the same environment for our son and daughter.

How tough is it being secretary of transportation and raising two small kids?

Yeah, I think every working parent knows how demanding it is to have any job.

Certainly a very intense job while while you're raising kids.

One of them's sick and can't go to daycare.

They don't really care whether the president's calling or you got a big meeting or TV interview there, too, and you've got to be there for them first and foremost.

But I've got a boss in President Biden, who's a deeply family oriented person, has tried to set that tone for the entire administration, not just high profile appointees, but but for all of us.

And and it's a real privilege to be able to to serve and to raise them, knowing that the stuff I get to work on, the bridges we're building, airports, we're fixing things my own children are going to use.

Of all the industries that you helped to regulate, which is the one that's most recalcitrant to reform.

That's a great question.

Everyone's different in its own way.

We have been in particular pushing the freight rail industry.

It's it doesn't have a lot of players.

It's it's consolidated.

It's concentrated.

Customers have been frustrated.

Workers have been frustrated, their safety concerns.

And so we've really been pushing in particular the class one rail they arrogant.

I think that.

They have been used to an environment where they weren't very accountable.

I remember back when I was mayor trying to get my college returned by railroad companies and it was a dead end.

But now that I'm in a job where I do get my calls returned by railroad companies, I'm working very hard to get results.

So what's your leverage to get their attention?

Well, as a regulator, first of all, we are making sure that they meet the law and meet high standards on safety, on labor, on anything else.

We are responsible for you say it's a given.

But really, I've found enforcement patterns have varied from administration to administration.

I think it's safe to say we've toughened things up a lot with regard to freight rail compared to our predecessors.

And we're trying to get more abilities and authorities to do that right now.

There's a railway safety act waiting its turn in Congress.

And we're coming up on a year since the Norfolk Southern derailment in Ohio awakened so many Americans to safety issues in railroads that have been there the whole time.

And this legislation would make a real difference.

So I'm urging any member of Congress who is quick to get on television a year ago to make it clear on the record where they stand on this legislation that could make a real difference in railroad safety in America.

Final question, What do you want to be when you grow up?

You know, one thing I've found about every wonderful professional opportunity I've had is that it would have been a surprise to me a year or so before I was actually doing it.

And so I don't know what the future is going to hold.

I do know what's on my plate right now is I think, the most exciting as well as demanding set of challenges and opportunities that there's ever been for for someone in a role like mine.

Thank you, sir.

It's good to see you.

Thank you.

It's a pleasure.

Production of Off the Record is made possible, in part, by Martin Waymire, a full service strategic communications agency, partnering with clients through public relations, digital marketing and public policy engagement.

Learn more at MartinWaymire.com.

For more Off The Record, visit wkar.org.

Michigan public television stations have contributed to the production costs of Off The Record.