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Lawmakers shouldn't have budget debates 'in connection to the debt ceiling': Former labor secretary

American Bridge 21st Century Co-Chair Tom Perez, who is also a former U.S. Labor Secretary, joins Yahoo Finance Live to discuss President Biden's efforts to negotiate the debt ceiling with congressional leaders.

Video Transcript


- Well, President Biden taking a victory lap of sorts on this Friday taking credit for the stronger than expected April jobs report, tweeting in part "my plan to invest in America is working." Let's bring in former labor secretary under the Obama administration, we've got Tom Perez. He's currently the co-chair of American Bridge 21st Century.

Tom, it's good to have you on the show today. The president has to kind of balance, a very tricky message. On the one hand, you've got what appears to be a still very strong labor market, at the same time that's not necessarily good news when it comes to trying to temper inflation. How do you think he's been managing that message?

TOM PEREZ: Well, I think he's talking directly to the American people about things that really matter to them. And we have the lowest unemployment rate in 50 years, it's broad based growth in our economy. The unemployment rate for blue-collar workers has gone down significantly. Opportunities for young people, you're watching that increase significantly.

You look at the number of people, the ranks of the health care uninsured. It's low as it's ever been. And so I think the balance that the president is drawing is to show the progress we've made. And by the way, as someone who spent a lot of time on numbers days talking to experts like yourself, you know what, what so many of the pundits say right now is, oh, my goodness, we have a recession in the offing. This economy is built to last.

The investments in infrastructure, the bills that this president has led the passage of, they're just beginning to show their impact. So what we have to do now, is to demonstrate the progress we've made, but also be honest as the president has about the unfinished business. We still have to continue that fight to tackle inflation. We still have too many people who are uninsured.

And the differences between the approach of President Biden, which has worked. How many times did Donald Trump talk about infrastructure week? This President Joe Biden got infrastructure done. And that unfinished business is significant. And the differences between the two parties. The other party wants to take us off a fiscal cliff with the debt ceiling. That's not good for anyone in America. And that's what we're going to talk about is, what we've accomplished, the unfinished business, and the differences between the approach of Joe Biden getting things done and the approach of MAGA extremists, which is to burn the house down. That's not a strategy for success.

- Well, Tom, let's talk a little bit more about that fiscal cliff, because we certainly are looking at a showdown on the debt ceiling. President Biden used the opportunity today to say that the last thing the country needs after all we've been through is a manufactured crisis, how big of a risk or how real is that risk do you think that we could potentially default? And what does that mean for jobs?

TOM PEREZ: Oh, that would be catastrophic. And that's why three times during the Trump administration, Republicans passed increases in the debt ceiling. I think it was seven times in the Reagan administration. We have done this on a bipartisan basis. They want to have a conversation about budget priorities, you do that in connection with the budget that Congress must pass. You don't do that in connection with the debt ceiling, the treasury secretary has been very clear. We're very close to the precipice of a fiscal cliff.

And the challenge here and the reason this is different, and in some ways scarier is it only takes one Marjorie Taylor Greene to raise her hand and call for a vote on the 10-year of Kevin McCarthy. And there are folks on the far right who are content with burning the house down, and that's not what America needs.

- At the end of the day, there is a negotiation though here happening. We know the president's going to be meeting with the House speaker next week. Do you think is there a temporary solution here where you raise the debt ceiling just for the short-term to allow for more negotiation, or given the condition we're in right now, is that not the right approach?

TOM PEREZ: I think the right approach is to have this conversation during the budget cycle, which is what we do every year and what we should do here. Again, people across an ideological spectrum, I talked to a lot of folks on Wall Street, people who are registered Republicans independents Democrats, what they all agree on is this, this would be catastrophic. We've always kept our word in our debt obligations.

We have a budget cycle coming up. The fiscal year ends September the 30th, we have that budget discussion and we bring together both sides and we come together around a compromise. That's what we need to do. Again, how many times was the debt ceiling raised during the Reagan administration, during the Trump administration when they had complete control in 2017 and 2018? They didn't take us to the edge of this fiscal cliff.

These sort of threats are really going to hurt our economy. And I hope they will come to their senses and realize that the conversation should be had in connection with the budget for the upcoming fiscal year.

- Tom, let's look ahead to 2024, because we just heard Senator Ben Cardin is going to be retiring your name has been thrown around as a potential person that could throw their hat in the ring that could potentially pursue his seat. Are you considering a run for senate?

TOM PEREZ: No, I'm not. And there's going to be a great field in Maryland, and I'm looking forward to making sure the seat stays in Democratic hands. And I'll tell you what else I'm looking forward to is a 2024 election where, again, we tell the story of what we have done under this administration, and there's been so much accomplished. And what the unfinished business is, and then the difference is between the MAGA extremism, and what Joe Biden has done to bring America together.

That's I am proud to do the work I'm doing here at American Bridge, where we are telling the story through the lens of real people in Pennsylvania, Wisconsin, and elsewhere of the progress that they have made. They've been able to sustain their small business or start their small business because of help from the administration. They're paying $35 a month now for their insulin, because of work that Joe Biden did.

These are the stories that everyone has to tell, and it's all hands on deck enterprise because I want to make sure that every eligible person gets out there and votes. And unfortunately, the other side is working really hard to make it hard for people to vote. I think that's wrong and that's why I'm going to work so hard in the next year and change. It's about 550 days till election time and every single day we're going to be working hard to reelect Joe Biden and make sure we keep the Senate and keep the House.

- Finally Tom, we're talking about the labor market, but there's a big hole right now. With the secretary of labor that nomination for Julie Su being held up, you've got business leaders who have urged senate leaders to confirm. But on the other hand, you've got other business leaders who've said we're a little concerned about her pro-labor stance. What do you say?

TOM PEREZ: Julie, I've known Julie for over 25 years. I've watched her work with people across an ideological scale, whether it's grassroots advocates or business leaders from Fortune 100 companies. Julie has all the tools that you need in a labor secretary. She's a great listener. She understands the struggles of ordinary people. Her parents were small business owners.

And I'm confident at the end of the day, she will get confirmed. She got confirmed for her deputy secretary position, and I'm confident she'll get confirmed for the secretary position. We need a confirmed labor secretary. I know the work of that department pretty darn well, and I want to make sure she gets confirmed.

And I know she will work across the aisle. She understands. I'm not just the secretary of labor for blue America, I'm the secretary of labor for America, for everybody, for business, for workers. We need someone who's going to make sure that we stand up for opportunity for everyone.

- Tom Perez, we really appreciate you taking the time to join us here this afternoon. Former labor secretary under the Obama administration.