On today's edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca and Senator Jim DeMint to discuss the attack on Boeing by unions and the NLRB, their threat to Right to Work states and the debt ceiling debate.
Senator Jim DeMint
May 27, 2011
Domenech: Well, thanks again Senator for joining us. It’s a real pleasure to have you on.
DeMint: Well Ben and Francis, it’s good to be with you. I appreciate what Red State does every day and the pulling of people together all around the country has been the main force to change things in Washington, so I’m honored to be with you.
Domenech: Well, it’s certainly a pleasure. I wanted to start off by asking you if you could just speak for a moment on what’s going in your state with the National Labor Relations Board, and Boeing, and that entire situation. It’s obviously been something that’s been a huge issue for folks on-line and I was wonder if you could walk us through what’s currently happening.
DeMint: Well, this is not just a South Carolina issue or a Boeing issue. It really is a freedom versus tyranny issue. I thought I had seen everything from this administration and I’ve really been outraged out. And people don’t know half of it because so many businesses, associations, companies, come through our office and tell us what this administration is doing to make it harder and harder to have a business, to hire people, and to produce in any kind of cost effective way.
But what’s happening with Boeing is truly extraordinary. And if folks don’t know the facts, what happened is Boeing was starting a new production line for a new plane called a Dreamliner. They are going to continue to produce more of them in Washington, but they decided to --
Cianfrocca: In Washington state.
DeMint: In Washington state --
DeMint: -- and to move, to open a new line, build a new building and everything in Charleston, South Carolina. They already had one of their suppliers there so in some ways this was an expansion of what they were already doing. And so they’ve moved this new line. They’ve spent $1 billion on the building. They’ve already hired over 1,000 people. It will ultimately, directly and indirectly, account for over 10,000 jobs. A pretty amazing story.
But now that they’ve about finished their building a year later, there is an acting general counsel on the National Labor Relations Board who was appointed by the President, a former union guy. He has not been confirmed by the Senate, hasn’t been elected, he’s completely unaccountable. But he has filed charges against Boeing for moving their plant in relation for union strikes in Washington State. And it’s kind of, clearly not the case although Boeing did inform the unions there of the high cost of these strikes, and the interruption in production in trying to work with them to come up with some long term solutions.
And now the unions are using those negotiations as saying Boeing is doing this in retaliation. But what this is is an attack on any company that moves to one of the 22 right to work states in America. America is somewhat divided between forced union states and those free states that protect a worker’s rights not to join a union. Now, people in South Carolina can join a union if they want, but they’re not forced to. Even if their workplace is unionized, they cannot be forced to join a union and pay dues unless they want to. And the right to work states have better economy, better job creation, more people are moving to them --
Cianfrocca: You’re absolutely right.
DeMint: -- we’ve seen 25 congressional seats, so this is just an absurd attack on freedom and free enterprise in America. And we’re trying to do everything we can to push back, but so far the President has not even weighed in on this.
Cianfrocca: Yes. I find it really remarkable that he’s been silent about it. And you know, just even sharpen a little more what you’re talking about, this plant, of course, the 787 Dreamliner, wonderful, wonderful product and it’s one of the things that I, as a businessman, am hoping, you know, is going to be huge for the United States as a global competitor. It’s just, you know, it’s a great thing that we’re putting it out there and we need more of them. And for South Carolina to be in a position to produce three of them per month, it’s terrific. And so that improvement in the US trade position, as well as our economy, is what they’re fighting against here.
DeMint: It’s pretty incredible. And the real irony here is Obama’s Chief of Staff, Bill Daley (phonetic sp.), I think that’s his name, was on the Boeing board when this decision was made. And now he’s got these appointments of his saying that Boeing broke the law. And the President has also put the president of Boeing in charge of his export commission. And so it’s just –
Cianfrocca: Macenerny (phonetic sp.)?
DeMint: I can’t believe it. Yes.
Cianfrocca: That’s remarkable.
DeMint: And so this is so wrong, but the problem here is this, is Boeing knows they’ll eventually win the case.
DeMint: I mean, they’ll lose the first couple of appeals because they go back to the board that the President has stocked with union thugs basically, and --
Cianfrocca: “Union thugs”, may we quote you? That’s a great word.
DeMint: Once this gets in front of a fair and impartial judge they’ll win, but it’s only after millions of dollars in legal expenses and several years of chilling effect.
DeMint: What they’re trying to do is to tell any company in America, don’t even think about moving to a right to work state or expanding to a right to work state or you’re going to have to go through millions of dollars of legal expenses and this type of government harassment. It’s pretty amazing in America that we’re dealing with this type of third world tyranny.
Cianfrocca: Well, the acting general counsel you mentioned, his name is Lafe Solomon.
Cianfrocca: And I think that our listeners ought to know that name and put it, inscribe it on the wall of infamy. But you know, I’m wondering to what degree do you think, Senator, that this whole situation is being driven by Solomon and the NLRB and the union is getting dragged in, the International Association of Machinists, are they getting dragged along? I mean, you have to figure, people who run unions realize that their employer is their golden goose, right?
DeMint: Well, you would think but they don’t. They really do think that they have a monopoly on the workforce that they can extort just about any kind of demands they want. But the insidious relationship between the Democratic party and the union bosses, and I do want to make clear, this is not about the union workers. Because they’re great Americans, they’re out there working.
Cianfrocca: Yes. Indeed.
DeMint: But it’s when you can by law force people to join unions, force them to pay dues, unions are the only organization where dues can be used without the worker’s permission for political purposes. So much of the organization and money behind the Democratic party are coming from unions right now. And so the Democrats help expand unions, you know they are pushing collective bargaining now on our airport security. All of those, stimulus required union contractors are basically forced that, to move in that direction. So much of what they’re doing is forcing unionization because that is the financial and grass roots foundation of the Democrat party. And it’s really shameless at this point, even though the membership of unions is declining now in the private sector below 7%, they are being propped up by this type of government action that’s trying to intimidate and bully companies and states to accept this type of forced unionization.
Domenech: Senator, I wanted to take the opportunity as long as we had you on, I think Francis has said a number of things about the debt ceiling that I think could form an interesting question. Francis.
Cianfrocca: Well, yes. And I think Senator, you were among the signers of a letter that just went out to the President warning him of potential consequences should a debt ceiling not, increase not be enacted by Congress. What can you tell us about that letter?
DeMint: Well, we sent out a couple of letters. One was to Guidner (phonetic sp.) to tell him to stop threatening that we were going to default, because we’re not going to default --
Cianfrocca: Yes. I had a question about him, too.
DeMint: I mean, he’s stirring up, really a lack of confidence in America when we know we’re not going to default. If we never pass a debt ceiling increase we will not default. Now, what we’re trying to tell the President to do is develop a contingency plan to operate the country in the event the debt ceiling is not increased. It’s irresponsible for him to be looking ahead and all of a sudden say oh, gosh, it’s August 3rd, what do we do now? And so he needs to be preparing for operating the country based on our revenues rather than borrowing more money while this negotiation is taking place.
Cianfrocca: I think in technical terms, you know, just looking at it from a capital markets perspective, the way to avoid a technical default is to keep, is to stay current on debt service payments for already outstanding debt. And that seems to me entirely possible. We’re talking about two to $300 billion with interest rates so low. And so what that means, I think, and I’m just asking you to confirm this, part of that operational plan would be to make sure that the debt payments continue to be made on schedule and that there are corresponding spending cuts elsewhere.
DeMint: Well, that’s what Guidner needs to say clearly because it’s the truth. The Congressional Research Service said we would never be in any danger of default. We may have to trim other government programs and expenditures, but over 70% of our revenue is going to continue to come in from taxes. The debt ceiling budget is probably a budget from about six or seven years ago, so it’s certainly not doomsday. We just have to trim things back.
But the Secretary and the President needs to make it clear, what is obvious is if it was the last dime we had we would not default on our, the interest payments on our loans. And we need to tell the world that and to work out our domestic issues, but to try to create instability in the market and to create panic so he can force through more spending is completely irresponsible.
Cianfrocca: Well, one of the things that has been completely remarkable to me over the past week and a half or so, since we hit that technical debt ceiling, is this explosion in corporate debt issuance. It’s very clear that the investors out there in the country are just hungering for low risk assets and we’ve seen an issuance of high grade corporate debt to substitute for the, you know, for the missing supply from the government. It’s just huge. You know, the appetite for these assets is undiminished. And you know, my question for you is, we’re talking about a very, very large number in terms of not increasing US debt, something like $125 billion a month.
So, when we say, I think we need to be clear. At the same time we’re making the point that you just did, the spending cuts that would be needed to operate under a firm debt ceiling, a non increased debt ceiling are enormous. And we’re talking about very, very large spending cuts in programs and possibly entitlements, yes?
DeMint: Right. Well, I don’t think we need to cut entitlements. The checks for Social Security, Medicare need to continue to go out, but there is a lot of trimming that would have to take place. What we need to do, and hopefully media outlets like Red State will help us with this, is I think as Republicans we need to take a stand, particularly in the Senate. If we could get 41 Republicans that said we will not allow a debt ceiling vote to take place until we pass a balanced budget amendment, I think we would eventually get the balanced budget amendment passed. So frankly I think it’s easier to get 67 votes in the Senate for a non-specific long term budget balance requirements than it will be to get any significant specific cuts and get 60 votes for that.
So, but if we don’t take a stand we know we won’t get it. But I would be willing, I mean, I don’t want to vote for an increase in the debt ceiling no matter what, but if we got a balanced budget amendment passed, that would mean next year the states would be debating ratifying that amendment. And in two to three years we would probably have two thirds of the state have done that, then a five year implementation schedule. So somewhere six or eight years out we would move responsibly towards a balanced budget.
In that scenario, if we needed to do some accommodation short term to make sure that all our entitlements were paid and everything, I would work with them. But unless we pass a balanced budget amendment to the constitution this government will bankrupt our country. I can tell you that definitively, because when you look at the debt we’re planning over the next 10 years, right now Biden has announced they’re looking at maybe cutting $1 trillion over 10 years and --
Cianfrocca: Nowhere near enough.
DeMint: -- that hasn’t included some tax increases.
DeMint: They’re not even on the same page of reality.
Cianfrocca: They’re off by a zero. They’re off by (unintelligible) it’s got to be closer to 10 trillion.
DeMint: Well, and so the Democrats don’t even have to talk responsibly about Medicare or anything because they don’t believe we have to cut spending. They don’t believe we should balance the budget. That is something Republicans and the American people have to force on this political system here if we expect to save our country.
Domenech: Senator, I know that your time is limited and I want to thank you for taking the time to talk to us. Let’s close with this question then, do you think Republicans are going to hold the line on this issue and on the issue of Medicare reform? Or are they going to pull back away from it in sort of cowardice and miss this moment? Because this is kind of the question that everybody is really asking right now, it seems to me.
DeMint: Well, I’ll tell you, there are two ways to do this. If we announced our demands boldly now and got the American people to get behind us, how could you argue with balancing a budget six or eight years out? American people would be with us. If we put those out there, then I think we would stand through the storm and the crisis that the President tries to create and we could hold our ground until we got the real cuts, and the caps on spending, and the balance that we need. But if we do it the way we’re doing it now, and we don’t have any clear position, and we negotiate behind closed doors while Biden is actually putting the negotiations in public by throwing out these figures, it’s going to be just like the continuing resolution debate a couple of months ago where they come out with this historic deal that actually does nothing. And if we’re going to, unless we’re bold, unless we get Americans with us, we’ll cave in.
Cianfrocca: And I’d just like to sharpen one thing that you said a moment ago, Senator, which is, you kind of laid the gauntlet down for us. I mean, we’re talking to you as citizens about what our representatives in Congress need to do, but you a moment ago said it’s up to us. People at places like Red State and Coffee and Markets, it’s up to us to get the word out and start convincing people.
DeMint: Well, yeah. I would love to see all the conservative media, the conservative groups have a massive signing ceremony, you know, it’s either balance or bust here in Washington. If the movement on the outside pushes then I think we’ll hold the line here. But if we do this quietly and just wait until the last minute, it’s going to be just like the continuing resolution debate and I, I think all the conservatives will be deflated. It’s just a matter, if we believe it let’s put it out there. Let’s draw the line in the sand and let’s hold with the American people until we get done what needs to be done.
Domenech: Thank you so much, Senator. We truly appreciate you taking the time to talk to us. And it’s a pleasure. We hope you will come on again with us in the future.
Cianfrocca: And have a great Memorial Day.
DeMint: Glad to do it. Thanks a lot.