With a new year comes new hurdles for Congress, including avoiding another potential government shutdown. While US aviation agencies have made much progress, and US airlines were able to handle the 2023 holiday rush, that could all come to a halt if Congress cannot come to a consensus, or if new regime takes over in 2025 and makes major changes to federal policy.
US Secretary of Transportation Pete Buttigieg sits down with Yahoo Finance Executive Editor Brian Sozzi to discuss the potential for a government shutdown and the impact it will have for transportation across the US.
Buttigieg explains how a shutdown could thwart efforts to expand the number of people working as air traffic controllers, saying it would “stop us in our tracks.” The Secretary says that preparing for the last shutdown threat “cost a lot of time, and effort, and energy, and money just getting ready for the possibility of that.”
The 2024 race for the White House is starting to heat up. If former President Trump were to win, there is a possibility he could gut some tax credits for EVs. Buttigieg says of that possibility: “A radical policy shift like that would dramatically undermine the American auto industry, at the very moment when there have been so many gains in a made-in-America EV revolution, under the Biden-Harris administration. The reality is former President Trump allowed China to build a major advantage in EV batteries and EV manufacturing at the very moment when it began to become obvious that EVs are going to be the future and that we can’t keep people trapped in gas cars any more than you can keep phone users trapped on land lines for the next hundred years.”
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor’s note: This article was written by Nicholas Jacobino
Video Transcript
BRIAN SOZZI: All right. Welcome back to Yahoo Finance. And the clock is ticking on a potential government shutdown and with it, potentially havoc to the country’s transportation industry. Let’s get right to Transportation Secretary, Pete Buttigieg for more on this potential impact. Mr. Secretary, always nice to see you here.
So your agency has had a couple of good wins recently, of course, the fine on Southwest, lower cancellations, but if there is a shutdown, how does that impact the broader transportation industry?
PETE BUTTIGIEG: Well, it would really stop us in our tracks on one of the most important things we’re doing right now, which is growing the workforce of air traffic controllers. So there’s been a lot of coverage recently about the stress that our controllers are under. The total number of the ATC workforce has declined year after year after year for decades.
We finally changed that. We’re finally growing the number of air traffic controllers, hiring faster than people are retiring or leaving, but a shutdown would immediately close the academy, it would stop the training pipeline, and we would immediately begin losing ground. So that’s just one of many examples from the transportation space alone about why America doesn’t need a shutdown right now.
And, you know, the last shutdown drama cost a lot of time and effort and energy and money just getting ready for the possibility of that. We really should not begin 2024 with house Republicans threatening to do it yet again. It doesn’t serve any meaningful policy objective, and it would send us in the wrong direction right after, as you mentioned, we’ve seen some really good results last year.
You look at the cancelation rates, they’re at a 10 year low, and we turned that around quickly after everything that our airspace went through in the prior year, and we’re making good progress. I can’t guarantee that progress would continue if House Republicans force this kind of completely unnecessary shutdown in a couple of weeks.
BRIAN SOZZI: Mr. Secretary, I think a lot of investors, at least that are on Yahoo Finance, are just continuing to ignore the potential for another government shutdown under the thinking is something will get done. As someone that has been through this series of events before, what’s the probability there is in fact a shutdown soon?
BRIAN SOZZI: Well, look, I left the office on Friday afternoon last time in the fall pretty sure that we were facing a shutdown and over the weekend, it got resolved. So it can happen and it should happen that it gets resolved, but it should never get that close in the first place. And look, frankly, it seems like the likelihood of it going to shut down is worsened by many of the dynamics that we’ve seen in the last few months.
There has to be a way to head that off, especially because nobody around the country wants this. I mean, this is not something that the American people are looking for their elected representatives to do. On the contrary, there’s an expectation that Congress will do its job, fund the government and allow us to do things like fix ports that are important for our supply chains and inspect railroads to keep them safe and grow our air traffic control workforce and all the other things that people expect from our department alone.
This is not a game. This is not an exercise. This is real life. This is our actual government, the only one we’ve got in the United States, our one federal government with some very important jobs to do. And frankly, the people– I mean, just thinking of the 55,000 or so men and women of this department have better things to worry about all day as they look after American transportation safety than worry about whether they’re going to get paid in two weeks.
BRIAN SOZZI: And Mr. Secretary, some really jaw dropping photos out of Japan, of course, two planes colliding there. I believe it was yesterday. Some concerns on if the planes were properly communicating with the control tower. What do you say to Americans fearful that because of the shortage in air traffic controllers, that we can see a situation like this?
PETE BUTTIGIEG: Well, look, those horrifying images demonstrate just how important aviation safety is and why we work so hard to maintain America’s record as the safest, most complex aviation system in the world. Flying remains the safest way to travel in the United States of America, and we don’t take that grant– for granted for a minute.
To the point that in the absence of having had a fatal airline crash in more than a decade, we look at the close calls. Anytime something came even close to potentially maybe leading to an incident, we look at those close calls the way we used to look at crashes, and of course, we also look at things that are happening around the world outside the US, which is why the FAA will pay close attention to any and all lessons learned from what obviously is still unfolding in terms of getting the facts and the information about what happened in Japan.
BRIAN SOZZI: Since we last talked, Mr. Secretary, Tesla has recalled almost all its vehicles. It made two million vehicles. They have since put out an update to their autopilot software. Now I recently caught a Washington Post story, a review of this new technology and their takeaway was it’s still not safe and people should not feel safe that Tesla vehicles with autopilot are on our roads.
Should these cars be– do they need more updates? Should they be on the road altogether with this technology?
PETE BUTTIGIEG: Well, I say is any time that our department finds a safety concern that can lead to a recall, and in this case, there was a recall to improve the safety of this technology, what you have here is a situation where you have what’s called level two automation. It is designed and intended to make a car safer.
But if you rely on it too much, if you forget about the fact that no matter how advanced your car is, any car you can buy today requires that you have your eyes on the road and your hands on the wheel and any car that doesn’t ensure that, that can be a safety concern to the point that we expect and require that vehicles have measures that prevent any kind of foreseeable misuse.
In terms of going forward, obviously if there’s any concern going forward with this or any vehicle, NHTSA, our National Highway Traffic Safety Administration, takes that very seriously and there is the potential for further corrective action like a future recall. What we’re seeing now is that increasingly, the recalls are around not just hardware, but software.
The good news is often a software-based recall is simpler to administer than a hardware one but whether it’s hardware or software, or the way they interact with each other, we’re always going to be acting to make sure that our cars get safer. We were just talking about aviation safety where we work so hard to make sure that we maintain zero as the number of passenger airline fatalities in a given year.
We need to adopt that as our goal for roadway safety too, and that’s a long, long way from where we are today. Today, we lose the equivalent of a 737 every single day on our roadways which is why we need not just safer cars, but safer roads, safer drivers and people, safer vehicles, all of that– safer speeds.
All of that adds up to saving potentially thousands of lives in America every year.
BRIAN SOZZI: Of course, Mr. Secretary, you and President Biden have championed EVs in this country, rolling out key legislation like the Inflation Reduction Act. Now former President Trump is eyeing potentially gutting this, pulling back those incentives. Major automakers have invested a little more than $100 billion to roll out EV and infrastructure in this country.
If those incentives are pulled back given whatever may or may not happen come election time, how destabilizing would that be for America’s auto industry?
PETE BUTTIGIEG: Well, a radical policy shift like that would dramatically undermine the American auto industry at the very moment when there have been so many gains in– made in America EV revolution under the Biden-Harris. administration. Look, the reality is former President Trump allowed China to build a major advantage in EV batteries and EV manufacturing at the very moment when it began to become obvious that EVs are going to be the future and that we can’t keep people trapped in gas cars any more than you could keep phone users trapped on landlines for the next 100 years.
The industry has a very clear direction and our policy has been to make sure that EV industry is made in America. Undercutting American auto workers and auto companies with that kind of policy shift is the exact opposite of what this country needs, especially in a place like the American Midwest where I come from where I see communities that made their original prosperity happen on the strength of the auto industry as it was 70 or 90 years ago.
Now seeing jobs created with EV battery facilities and other things related to the new technology, trying to move America back toward old technology is a recipe for job loss and failure.
BRIAN SOZZI: All right. We’ll leave it there. Transportation Secretary, Pete Buttigieg, grateful for your time as always. Happy new year to you and team. We’ll talk to you soon.
PETE BUTTIGIEG: Thanks. Same to you. Take care.
BRIAN SOZZI: Thank you.