Governor Glenn Youngkin (R-VA) joins Yahoo Finance Live to discuss how inflation is impacting his state of Virginia, how he's trying to help boost the labor market in the state, and why he believes critical race theory shouldn't be taught in schools.
JULIE HYMAN: Now we toss it over to Yahoo Finance's editor-in-chief, Andy Serwer. He's sitting down with the governor of Virginia. Andy.
ANDY SERWER: Thank you, Julie. Yes, I am here with Governor Youngkin. Nice to see you, governor. Thanks for joining us.
GLENN YOUNGKIN: Andy, thank you for having me. It's great to be with you.
ANDY SERWER: Good to see you, too. So a lot of economic issues to talk to you about. Let's start with inflation because so many Americans are feeling the bite, and of course, Virginia's Larry Summers recently said that it would take unemployment to get to over 5% to really combat inflation. And I'm wondering how you feel about that statement, particularly since inflation in the Commonwealth is currently running at about 3%.
GLENN YOUNGKIN: Well, unemployment.
ANDY SERWER: Unemployment.
GLENN YOUNGKIN: Yeah, unemployment. And one of the challenges that we have right now is that inflation is running rampant. And gas prices up nearly $5 across America and hitting $4.90 in Virginia recently. And of course, the labor markets are incredibly tight. This is driven by two phenomena. One is failed policies out of Washington on energy. And we've just seen statement after statement after statement that is anti-US production.
And we have to recognize that an all of the above energy policy that actually encourages our domestic production so we don't cede a national security advantage and have to go to Saudi Arabia, looking for incremental production, as opposed to doing it here. And that's got to be step one to combating inflation.
And second of all, the labor markets are, of course, very tight, but they're not as tight as people would think, because I think there's 3 million jobs in the United States that are going unfilled because we still have workers on the sidelines.
In Virginia, there's 150,000 people who've just left the workforce. And we're trying to get them back. And in the first four months of our administration, nearly 80,000 Virginians have come back into the workforce. So we are really driving against labor participation, which was at an all-time low in Virginia.
And this is where the answer is. If we could get an energy policy that would bring back domestic production and combat the supply-demand imbalance and bring energy prices down, and if we get people back off the sidelines into the workforce so that we can meet the job demands that are there, then there's a real chance to combat what this-- what everyone is thinking is inevitable with regards to a recession. I don't think it's inevitable, but we have to have some policy changes, one out of Washington, and then we've got to get people back to work.
ANDY SERWER: I want to talk a little bit more about inflation, though, Governor. I understand your concerns about recession, of course. You just signed a budget. And there's some inflation fighting measures in there, including a cut on groceries, a tax cut. And I want to ask you how that specifically is to address inflation and what you aim to do with that.
GLENN YOUNGKIN: Well, the cost of living in Virginia has been running away for years. And Virginia went from being a place people could afford to live to a place that's too expensive. And we also have been overtaxing Virginians. I mean, there's an extra $15 billion in the budget forecasts that people didn't expect. That's Virginians' money. And so this budget that I signed this week, which provides record tax cuts, $4 billion in tax cuts, is an extraordinary step to allow Virginians to keep their money.
And we're doing it through four big ways. First, we are eliminating the state's portion of the grocery tax. It's a regressive tax. I can't believe that Virginia taxes groceries, and so we're eliminating the state's participation in that. Second, we have the largest tax rebate in the history of Virginia. Third, we're increasing our standard deduction by 80%. And then we're going to work for our veterans. And then when you hit 55 in Virginia, up to $40,000 of your retirement won't be taxed anymore. I want veterans to stay in Virginia.
There's work on PPP loans. No longer tax those with small businesses up to a million dollars. We've just got to get the tax burden down. I mean, the average Virginian today is so worried about inflation. And when you see $3,000, $4,000, $5,000 being taken from them by the silent thief that is inflation when they're hardworking folks, trying to make ends meet, this is a way to let them have some of that money back, which, oh, by the way, the Commonwealth should give them. It's their money, not government's.
ANDY SERWER: The silent thief. I want to ask you, are you concerned, though-- you have a surplus right now. Are you concerned about emptying the coffers and running dry within a couple of years, though, if you cut taxes?
GLENN YOUNGKIN: No, I'm not. There is so much money that has been in Virginia's system because of overtaxation. And what we've been able to do is, in fact, cut taxes by $4 billion, and then also make record investments in education and in law enforcement and in behavioral health. This is a chance for us to rebalance what has been a really lopsided over taxation environment to give some back. So out of our $15 billion of excess taxing, we're going to give $4 billion of it back to Virginians. And over $10 billion of it will get invested in these most important ways.
This is a chance for us to rebalance this and get this right. And this is why we finally see people saying, hey, I want to stay in Virginia. We've had more people leave Virginia than move to Virginia from the other 49 states. And all of a sudden, we've stemmed this flow. We've got more than almost 80,000 people back in the workforce. We've got companies coming to Virginia, moving global headquarters to Virginia and putting manufacturing facilities in Virginia. And this is all about a package of making Virginia the best place to build a business, to grow a business, to live and to work.
ANDY SERWER: I want to ask you about some of those companies in a minute. And we are doing a lot of state specific questions, but they're salient, I think, to the rest of the country. One thing you didn't get passed, I don't believe, in your budget was a gas tax. I want you to talk a little bit about that and also weigh in a little bit on the Biden administration's efforts to have a national gas holiday.
GLENN YOUNGKIN: I have sent a bill three times to suspend our gas tax in Virginia. And three times the Senate, which is controlled by Democrats, have rejected it. It's a chance for us to get $0.26 off of gas prices at a time they're at an all-time high. And oh, by the way, again, our Commonwealth Transportation Fund, which is where the gas tax goes, has got over a billion dollars more than expected in it. And so we can afford this because it's only $400 million, roughly, that it will cost to give a three-month suspension during the summer when gas prices are at their highest of the year.
And so this is something we should get done. I am frustrated with Senate Democrats. And then you turn around and you see the White House calling for a three-month suspension of the gas tax. This is not politics. This is a chance for us to do the right thing for Virginians. And Senate Democrats consistently play politics.
The reality, of course, is that President Biden can do so much more. He can do so much more than just suspend the gas tax. He can promote domestic production. He can promote the investment in infrastructure. The termination of the Keystone Pipeline was a huge mistake. We need to promote production. We need to promote infrastructure. And we need to grasp the fact that domestic energy production and being energy independent is such a strategic advantage, a national security advantage, and it will bring prices down for Virginians and Americans.
ANDY SERWER: Fair enough, governor, but aren't you concerned about climate change?
GLENN YOUNGKIN: I think what we have seen all over the United States is that by having an all of the above approach-- and we have a wind energy project in Virginia. We have solar development projects. But we also have the most efficient energy production grid with lots of natural gas, clean burning natural gas that, oh, by the way, is produced and, in fact, supplied here in America.
And so this is a time for common sense. It's a common sense approach in Virginia and across the nation that we need to adopt an all of the above and recognize that we can, we can have energy independence. We can promote wind and solar. But we must maintain our advantage with a strong natural gas industry.
ANDY SERWER: You mentioned some of those companies moving to Virginia-- Boeing, Raytheon, LEGO, the toy company. The plant, though, the LEGO plant, was one of your coups. But LEGO recently accidentally published an internal document that belied some nervousness about weighing in to hot button issues like critical race theory, which you opposed during your campaign. What was your reaction when you saw that document? And how do you view these issues in terms of mitigating critical reception from companies and having them come into the Commonwealth? How do you balance that out?
GLENN YOUNGKIN: Well, I don't think it's a balance. I think, one, be clear on what you're doing. And what we are doing in Virginia is removing divisive concepts from schools. And we're teaching all of our history. I don't believe that children should be told that because of their race or their sex or their religion, that they're superior or inferior. They should judge one another, or that they're inherently racist because of their race, their sex, or their religion. I think that's wrong, and we're going to get it out of the classrooms in Virginia.
What we are going to do in Virginia is teach all of our history. And we're going to make sure we understand where we've come from so we can know where we're going. I don't believe that this is a moment where we have to say it's either this or that. We can do both. And the fact that companies are coming to Virginia-- Boeing leaves high crime Chicago. Raytheon leaves high tax Massachusetts. LEGO has a choice of the entire country. And where do they want to come? Virginia.
We have a great workforce. We have great infrastructure. Our port was just named one of the most efficient ports on the East Coast, most productive. We have great infrastructure access. We have sites that are ready. And we're going to invest up to $150 million more out of this budget in making sites ready. And this is about a place where companies know they can come and thrive. This is a place where a governor has been very clear of what we're going to do going forward and get taxes down.
We're going to invest in education. We're investing and making our communities even safer with $400 million in raises for law enforcement, investing in equipment and training. And so there's no confusion about what we stand for in Virginia, the policies that I am going to support. And companies are coming big time to Virginia because of that.
ANDY SERWER: You've talked a little bit, governor, about bringing Democrats and Republicans together. How do you feel that you're doing on that score?
GLENN YOUNGKIN: I think we're doing incredibly well. Why? Because low taxes, strong schools, safe communities, low regulatory environment, standing up for our constitutional rights. These are not Republican values. They're Virginia values. They're American values.
And what we found in our election was that independents came in droves. Democrats came in droves. We won the Latino vote. We won the Asian vote. We had more vote from the Black community than any Republicans had in memory. We won Greater Richmond. We won Hampton Roads. We got 42% of the vote in Northern Virginia, which hasn't been seen in a long, long time. And we also had record votes in rural Virginia.
We're able to bring people together around these common sense, conservative values that, again, are not Republican values. I think they're Virginia values. And I think they're American values.
ANDY SERWER: What about your time as CEO, co-CEO of Carlyle? How has that helped you, or not, be governor of the state of Virginia?
GLENN YOUNGKIN: Yeah, I think my time at Carlyle-- I was there for 25 years. And I had a chance to rise up through the ranks and felt incredibly blessed that I had a chance to co-lead it with Kewsong Lee. And when I stepped out of Carlyle because-- by the way, Carlyle was in great shape and continues to be in great shape under Kewsong's leadership. I was able to bring a whole fresh perspective to this job of governor in Virginia. Now, there's really never been a business guy like me run for governor in Virginia and win.
And my experience as co-CEO of leading business has been 100% transferable, 100%. Pulling people together around a vision, making sure that we, in fact, are building a coalition to move forward. By the way, running government better. Government can be run better. It needs to be managed. People need to know what the expectations are for them and that we're measuring them. We're measuring outcomes. And we're seeing great movement across all of that.
I'm really pleased by this first five months. We've delivered for parents. We've delivered for schools. We've delivered for law enforcement. We got taxes down. We're bringing companies to Virginia. We're growing the workforce. And I ascribe that 100% to my experience as a CEO.
ANDY SERWER: All right. Virginia Governor Glenn Youngkin, thank you so much for your time.
GLENN YOUNGKIN: Thank you.