On this episode of Yahoo Finance Presents, Senator Mark Kelly of Arizona talks with Yahoo Finance anchor and reporter Akiko Fujita to discuss the impact inflation is having on the U.S. economy as well as the proposed legislation to limit members of Congress trading stocks. Senator Kelly also discusses more proposed legislation around building and sourcing the U.S. supply of rare earth metals outside of China.
AKIKO FUJITA: This is "Yahoo Finance Presents." I'm Akiko Fujita. And today, I'm joined by Arizona Senator Mark Kelly. Senator, it's great to talk to you today.
MARK KELLY: Great to talk to you, Akiko.
AKIKO FUJITA: Let's start with where things stand, because we are speaking one year on into the Biden administration. When you think about where the economy is, certainly a very strong recovery in the labor market. We're at near full employment-- 6.4 million jobs created. And yet the headline that is dominating all this is inflation at near 40-year highs. How much of this, do you think, is the doing of the president's policies? How much of this is a function of what we've seen-- the easy money coming from the Fed?
MARK KELLY: Well, let me start by saying-- in Arizona, yeah, I mean, we're at full employment right now. So not even close, we're actually there. But prices have gone up for gasoline, ground beef, milk, eggs-- nearly everything. I mean, these rising costs are really hurting Arizona families and families across the country. But it's not just here in the United States.
I mean, we've seen European countries experience similar issues. When supply chains get disrupted like they have over the last couple of years, I mean, that contributes to shortages. And as we know, that's going to result in rising prices.
AKIKO FUJITA: You've pressed the administration specifically to take steps to lower the cost of food. And you've spoken specifically about what you've described as corporate price gouging that's happening. Is that what you think is happening here?
MARK KELLY: For some issues, yeah, absolutely. Just this week, the Secretary of Agriculture, Secretary Vilsack, came out to Arizona a couple of days ago. I was with him meeting with some ranchers in Glendale, Arizona, but the ranchers came from all over the state. Ranchers are getting the same amount for their beef that they did before the pandemic, but the prices have gone up.
So what is causing that? They're not getting more for their product, though consumers are now paying, in Arizona anyway, about a $5 a pound for ground beef. So something is happening where the product goes from the ranch to the market. So I have the administration looking into this.
I mean, is it the processors? What is causing prices to go up? And you know, food is becoming really challenging for many Arizona families to buy groceries right now. And it has to be dealt with.
AKIKO FUJITA: What are you hearing from those constituents-- the ranchers that you just alluded to? How much have they seen costs go up and what's the reality for their businesses?
MARK KELLY: Yeah, I mean, the price of corn and alfalfa, the price of diesel fuel-- so their expenses have gone up but their revenue is flat. They should be benefiting from some of the price increases. I mean, we don't want the prices to go up. We want Arizona families and families across the country to be able to afford groceries. This has been really challenging.
But there's something specific to this, and I think this is going on in other industries, where you have big corporations that are taking certain steps to increase their profits on the backs of the American people.
AKIKO FUJITA: So let's talk about the steps that you have proposed to try and bring things down. You talked about bringing down the cost of food, but also addressing the snags that we're seeing in the supply chain-- specifically in the labor shortage in the trucking industry. You've called for the need to expand the pool of prospective drivers. But how do you actually do that? This is something that we saw even before the pandemic, and some would argue there's a bit of a generational shift that's happening-- not enough people wanting to get into this industry anymore.
MARK KELLY: Yeah, it's true. I mean, these are good-paying jobs. But they also require that you leave your family for, in some cases, you know, good periods of time. It's challenging work. And right now, I mean, we've got a shortage of employees across the country. You know, the workforce-- we had over, I think, about 1.5 million additional Americans retire than expected during the pandemic.
That's a lot of people that just disappeared out of our workforce. You know, there are certainly some things you can do. You can provide training opportunities that are more readily available to young people, you can reduce the age for folks to get jobs where they're driving on interstate highways from state to state. Right now, that age is 21. And we are looking into reducing that to 18.
You've got to make sure you have the right people. You've got to make sure you train them well and they're going to do the job in a responsible way. But there are steps we can take to alleviate that supply chain issue. We also have supply chain issues that are showing up at our ports of entry. Whether they're the ports of-- you know, the land ports of entry like we have in Arizona on the Arizona-Mexico border, or the ports of entry along the coasts like California with shipping backed up-- called on the administration to take some steps there. They are.
They're building or opening some temporary locations for ships to come in and unload their cargo. On the land port of entry issue, in the bipartisan infrastructure bill, which I was one of the folks that negotiated and worked across the aisle to get this done, we've got significant funding to upgrade those ports of entry. That'll help us bring more products not only from Mexico, but to Mexico in a much more efficient way. So that's going to alleviate-- in the long-term, alleviate some supply chain issues that we've been facing.
AKIKO FUJITA: Let's talk about another key issue that you have been focused on, and this is the trading-- or stock trading of lawmakers. You recently introduced a bill with Senator Jon Ossoff to ban stock trading for lawmakers as well as their spouses, and call for all lawmakers to place their stock portfolios in a blind trust. This is an issue that we've seen pop up from time to time.
There's a competing bill from Josh Hawley too. Why is your particular approach the right one at a time when there's growing questions about whether, in fact, lawmakers are trading, which presents a conflict of interest based on information they have?
MARK KELLY: Yeah, I mean, absolutely. I mean, we-- I mean, we see a lot of information that the general public does not have access to. And it's not right for individuals to be elected to Congress and then be able to trade on that information-- information that the American people don't have. That's why as soon as I was elected, I started-- before I was sworn in, I took steps to put my assets in a qualified blind trust to make sure I don't-- I mean, not only can I not make trades, I don't even know what's in there. The same thing is true for Senator Ossoff.
Hey, I think any time we can be more-- first of all, more transparent with the American people as to the steps we're taking, and getting the corporate money out of our political system, and making sure that members of Congress can't trade on this information, it makes Congress work better for all of us. I'm one of only-- I'm actually the only person-- I'm the only person in the United States Congress out of 535 people that does not take corporate PAC money, has a qualified blind trust, and has a public schedule. So my constituents know what I'm doing here every day when I'm in Washington, DC.
AKIKO FUJITA: What do you say to those who say this still doesn't go far enough-- there should be criminal penalties, for example? I mean, the disclosure rule exists-- we've learned from recent reports that not lawmakers don't necessarily follow that too-- is there a compromise between all of the competing bills that is a way to get other lawmakers on board?
MARK KELLY: Well, if our legislation becomes law, members of Congress are not going to have opportunities to trade on the information, because they're not going to have control over any stock portfolio that they have. So you know, the penalties in our case, you know, for folks that don't do this or wind up through another mechanism of being able to trade on the information-- yeah, there are fines associated with this.
But if every member of Congress put their securities into a qualified blind trust, we would not have this problem. And then Congress could really get down to focusing on what's in the best interest of the American people and not what is in the best interest of members of Congress personally. That's where the problems arise.
AKIKO FUJITA: Reducing the US reliance on Chinese supply-- certainly a big focus of this administration. You recently introduced a bipartisan bill that essentially bans imports of rare earths-- the use of rare earths among defense contractors. That's certainly in line with what we've heard from the president. But how do you do that when the alternative doesn't currently exist in the US on the scale that it needs to?
MARK KELLY: Well, I think this is a first step. And it's got a timeline in there-- by 2026. Right, so defense contractors, folks that are building the most sophisticated weapon systems-- fighter airplanes, ships, missile systems-- won't be able to use Chinese rare earth minerals in the technology that they built and sometimes sell overseas.
So we've got to stop relying on Chinese rare earths in our defense industry. It's a national security risk to us. If China decides to cut us off on those rare earth minerals, you know, right now, this would have a serious impact on our national defense. So this requires that DOD and the Department of Interior work together to build a stockpile of rare earth minerals-- and we can do this-- and we have some time to do it, and then require that defense contractors just use rare earth minerals that they can obtain from US suppliers.
AKIKO FUJITA: Why specifically focus on rare earths? I mean, there are so many supplies, so many materials that come from China. Why has this been a specific focus for you?
MARK KELLY: Well, this is one right now where, you know, the supply is in China. And we do not have a significant enough supply here in the United States today. And this legislation will fix that. We'll look for other sources.
And we can build this strategic reserve of rare earth minerals over time, if we focus on it and if we choose to do it. And this sets the parameters to put the United States in a position that we have to choose to do this. When we build this stockpile, defense contractors will have access to it. And we will build the supply chain of rare earths that we need, because we don't want to continue to be in the situation where our adversary, you know, could cut us off from things that we need for our national defense.
AKIKO FUJITA: Certainly, we've seen a lot of US businesses who are operating in China in the crosshairs recently, especially with this new law that was passed-- the Uyghur Forced labor Prevention Act. You had companies like Intel who had to go out and apologize in China, saying-- after they put out a statement saying they're no longer going to be sourcing materials from the region because of the law.
You know, I wonder how you're looking at that dynamic. Because we're taking this on specific issues, yet some would argue if these US businesses continue to do business in China on the scale that they have been doing, that is only fueling the economy there by way and also fueling-- or supporting the government. I mean, how do you think US businesses should be navigating this tricky geopolitical environment?
MARK KELLY: Well, I think we should be paying attention to our own personal norms as a nation. And you know, the Chinese currently, as you outlined, they use a significant amount of forced labor, the Uyghurs being one example of that. And you know, I would encourage US companies you know to take a look at that and look for alternate sources.
Manufacturing, we make some of the best stuff in the world, right? When you're looking at sophisticated manufacturing, there's no country that's better at it than the United States. We're also very innovative. And you know, we have opportunities here to build manufacturing in the United States, good-paying jobs for the American people.
And at the same time, you know, we can live up to know our own personal expectations of supporting human rights around the planet. And what the Chinese do with forced labor, it's just not right.
AKIKO FUJITA: Senator Mark Kelly, it's good to talk to you today. Really appreciate the time.
MARK KELLY: Great speaking with you, Akiko. Thank you.