Advertisement

Sec. Buttigieg 'concerned' about rail companies' push to cut costs

U.S. Transportation Secretary Pete Buttigieg joins Yahoo Finance Live to discuss how the debt deal will impact his department. He also spoke about rail safety following the Norfolk Southern train derailment in East Palestine, Ohio in February, saying he is "concerned" about rail companies' push to cut costs. In the expansive interview, Buttigieg also weighed in on the Biden administration's efforts to expand the U.S. EV charging network and his efforts to improve air travel.

Video transcript

- Well, something else on traders' minds-- the debt ceiling deal is set to face its final hurdle. Congress will vote later this evening on President Biden and House Speaker Kevin McCarthy's bipartisan agreement to raise the debt ceiling and limit government spending before the so-called X Date.

We're joined by US Secretary of Transportation, Pete Buttigieg, alongside Yahoo Finance's Executive Editor Brian Sozzi. Great to have you both with us. So first, Secretary Buttigieg, I want to ask you, we know that some of the cuts to transportation that funding was on the table at one point from McCarthy there. What do we know now about how some of these cuts and these negotiations will impact your department?

PETE BUTTIGIEG: Well, the effect will be much more attenuated compared to what we were facing when that bill passed through the House. The unilateral house Republican bill would have meant really savage cuts to a lot of very important things that we do from rail safety to air traffic control. We're still assessing the best ways to accommodate the caps and the restraints that are part of this deal, not everything that we would want to see, but that's what you're going to get in divided government. When there's a negotiation, I don't think either side got everything that they wanted.

But at the end of the day, this is a deal that is workable, that is consistent with our department's ability to meet its mission, and most importantly, that will prevent a default that would just be absolutely unacceptable and economically catastrophic, which I think is what everybody is rightly focused on, making sure that America can put behind us so we can get on to work after that X Date with the deal in hand.

BRIAN SOZZI: Mr. Secretary, just staying on the debt ceiling deal, does that impact any cuts there, does that impact efforts that you've undertaken to improve rail safety and to improve travel by airlines in this country?

PETE BUTTIGIEG: We're certainly going to be able to continue our work. And I would add that there's more to come on this, not just what's happening in terms of the budget, but active legislative processes on both. When it comes to railway safety, there is the Bipartisan Railway Safety Act, which is advanced through committee, would like to see that pass the Senate and the House and get to the president's desk, because it gives us more tools to work with, to hold these railroad companies accountable.

I think before the Norfolk Southern derailment, many Americans hadn't seen just how often incidents happen around the country. This is going to be a major step forward in preventing more of those.

On the aviation safety side and the customer service side, we are full steam ahead. We are advancing a rule that would create compensation for passengers when an airlines are responsible for a major delay or cancelation. We're working on rules around fees and refund ability transparency. All of that work is going to continue in the context of this bipartisan deal.

BRIAN SOZZI: Mr. Secretary, you mentioned Norfolk Southern, the railroads. Now, I talked to Norfolk Southern CEO about a week and a half ago and try to get a sense on where he is at after the derailment. Now, he told me they are not going to stop fully implementing precision railroading, which a lot of experts suggest are leading to derailments for Norfolk Southern and a lot of others in the railroad industry. What would be your response to that? Is that something that must end?

PETE BUTTIGIEG: Oh, I expect every railroad company to go-- not just to meet the letter of the law, but to go the extra mile when it comes to safety. And we're pushing them to do that. I continue to be concerned about this push for cost cutting. A lot of these measures go by the collective name of precision scheduled railroading, although I've never seen a completely satisfactory definition of all the things that go into that.

Bottom line is, there needs to be a level of safety and accountability. I'll give you an example that we're continuing to pursue, which is a requirement that there be at least, two people on board a train to meet this basic, basic common sense. But believe it or not, railroads have continued to push to be able to have just one person, even on a train that could be two three or more miles long.

I also want to mention, by the way, that we're doing work that doesn't just depend on what railroad companies do or don't do to improve infrastructure in ways that is going to mean fewer railroad crossings locations, where there's more of a hazard, of a crash, and, just as importantly, even if there is no incident or collision. You have long trains or stopped trains getting in the way of people, and sometimes emergency vehicles going about their days.

One of the great things about the infrastructure law is, it provides us funding to act on that. And we're working with communities and we'll be making announcements soon about that railroad crossing elimination. So we're making sure that it is safer and more convenient. We're pushing the railroad companies to do the right thing.

And let me mention one other thing that I was pleased to see Norfolk Southern announce, and several of the class one railroads have taken steps toward, which is reaching agreements with their unions to deliver sick leave. If you remember this was a big sticking point and a very tough issue last year as we faced a possible strike. The strike was prevented, but the President and the administration continue to say we believe that all railroad workers ought to have sick leave.

With these deals, these now bring us into the reality of the majority of Union railroad workers in America having access to that sick leave. And of course, we'd like to see that majority become 100%.

- And Mr. Secretary, I want to shift gears here, still staying with infrastructure, but also looking at the EV space, looking at this deal between Ford with its Tesla Supercharger network here. This also will give some of these Ford drive, this Ford EV drive as an adapter. But I mean, what does that mean for the current industry standard, for the current charging network that we have, and the upgrades that might be needed then for some non-Tesla or non-Ford cars?

PETE BUTTIGIEG: Well, bottom line is, we're really glad to see this deal and any deal that means more access for more drivers to more electric chargers. I mean, here we are on an aggressive journey to get to the president's vision of half a million chargers by the end of the decade across America. And there's already this remarkable charging network that Tesla has built.

So for that to be accessible to more drivers is, I think, very positive news. Now, a lot of comparisons have been made. I've made these comparisons myself to where things were back in the early days of VCRs and that VHS versus Beta moment, that you really want to get out of as quickly as you can.

But one thing that's important and different here is that adapters can come into play on the connector. I don't want to dismiss how important the connector is, but it is, in many ways, because of that adapter, one of the less difficult parts of getting a charger installed compared to the utility work, the site work putting it in place, making sure it's got the power, the reliability, the payment systems, and all the rest of it. We continue to be in this moment where there are competing standards and we're not going to put a thumb on the scale and dictate one standard or another.

What we are doing is we're setting basic standards for any charger that's going to be part of the programs that we're supporting as an administration. That it be interoperable, that it be transparent about pricing, that it be accessible, because we really do need to get to a point where it is no more difficult, complicated, or unpredictable to charge your car than it is right now to fill up a car with a tank of gas.

- Because Mr. Secretary, that is one of people's main concerns when considering an EV. Will I be able to access charging stations? How long is it going to take? For people who perhaps want a cleaner, greener option, but they're not really seeing that infrastructure in place, what sort of funding is going into that accessibility, and how soon will we'll see it as widespread as some of the interest that we're seeing in the EVs themselves?

PETE BUTTIGIEG: Although we're making major investments on this, as a matter of fact, $7.5 billion in the infrastructure law that we're now getting out to states and to communities. We have a community charging infrastructure program largely for places where you have. For example, a multifamily dwelling where just isn't yet profitable for profit company to do it, but also the overall nationwide system, the National Network that we're building, partnering with the states.

So again, instead of dictating everything from here in Washington, what we're doing is we've invited each state to submit its plan. They get a set amount of funding by formula to work that plan and get the chargers up. And you're going to see the construction, even this construction season, I think, is going to lead to more and more access. And again, we've got a very aggressive goal of a half million chargers by the end of the decade.

The other thing I want to keep reminding drivers of is that many American drivers, as a matter of fact, a majority have access to some kind of charging infrastructure in the form of a plug-in the wall. There are many ways in which charging an EV has more in common with charging your phone than filling up a car that runs on gas. It's just a different paradigm than what we're used to with how we've been filling up internal combustion engine cars for decades now.

BRIAN SOZZI: And Mr. Secretary, we're smack in the middle or we're getting ready to get into the peak summer travel season. Now, I believe it was your agency that put forward penalizing airlines if they can't deliver on time. Where does that stand, and then how concerned are you that airlines may come out and raise prices for summer travelers in advance of something, moving in that direction?

PETE BUTTIGIEG: Well, it won't be ready this summer. It takes a while to get a regulation like that done, including a period where we're going to take input from passengers, from industry, and from everybody else. But we are moving forward with this process because we think it's important that you have access to compensation when you've lost hours or even days because of something that an airline could have prevented.

And what we've seen in places that have done this, there's been something comparable to this in Europe for many years, in Canada is that it is definitely consistent with affordable airfares. It doesn't have some unreasonable effect.

Now, I also want to say this, what we saw over this last Memorial Day travel weekend was dramatically improved results compared to a year ago. Remember last summer, even on so-called blue sky days when the weather was fine, we still saw airlines running into massive problems with cancelations, delays, not being ready, schedules that may not have been realistic, staffing that wasn't where it needed to be.

We pushed hard on the airlines and took steps that were under our own control with the FAA to improve operations. And the first big test of those improvements came this last weekend. We saw the most passengers in our airports that we've seen at any time since before the pandemic. And the system performed quite well. We saw less than 1% cancelations on each of the days over that busy Memorial Day travel weekend.

And so far this year, we've been seeing cancelation under 2% actually every month, which is not something we've seen in about a decade. So I want to give the airlines some credit here. We have collaborated, and we have gotten a lot done that has helped to make sure there's a better passenger experience.

But we're not out of the woods. And when you have a bad experience as a passenger, we're going to be there to protect your rights and to make sure that the airlines do right by you. This rulemaking is one part of that process.

- And Mr. Secretary, for people who are taking road trips, or perhaps need better travel options, not just for leisure but also for commuting as well, talk about the reconnecting communities program and what that actually does for communities themselves, and what the hope is for the funding there.

PETE BUTTIGIEG: Well, the great thing about reconnecting communities is that it recognizes that the purpose of transportation infrastructure is to connect and not divide. This is in the past, that hasn't always happened. You've had freeways or railways that cut right through communities, often lower income communities and communities of color. And to this day, can be a barrier between people and jobs, or just the ability to get around your neighborhood or your city.

What we've been able to do with this funding is to improve that. We had a big announcement in Buffalo, where we're going to put a cap over the Kensington Expressway, allowing cars to continue to move, but restoring a neighborhood that was torn up when that highway was originally built.

In other places, it's a lighter touch, maybe an overpass or an underpass, helping pedestrians or vehicles get over under a railroad or a highway. There's an interchange in Tampa that really caused a lot of problems for a community that we're now able to redesign and fund that community in improving.

What I love about this is it doesn't make anyone worse off, and it makes a whole lot of people better off. And it shows that here in the 2020s, we're going to make decisions a little differently and a lot better than we did as a country sometimes 50, 60, 70 years ago, decisions that people are still living with, that we can improve on. And that's exactly what we're doing with those dollars.

- Well, I do appreciate you joining us. Mr Secretary, thank you for your time today. Pete Buttigieg is, of course, Transportation Secretary of the United States, we appreciate your time this morning. And our very own Brian Sozzi as well, thank you so much.

PETE BUTTIGIEG: My pleasure. Thank you.