Gas tax holiday is ‘a Band-Aid’ for energy costs, NAM CEO says

National Association of Manufacturers CEO Jay Timmons sits down with Yahoo Finance Live to talk about President Biden's proposed federal gas tax holiday, crude oil and gas prices, consumer savings amid inflation, recession fears, and manufacturing programs to encourage employment and leadership.

Video Transcript

SEANA SMITH: President Biden also calling for a gas tax holiday this week as the gas prices cover near those record highs that Jen was just talking about. But some groups are pushing back on the president's call here. For more on that, we want to bring in Jay Timmons. He's the CEO of the National Association of Manufacturers

Jay, it's great to see you. You weren't happy with what we heard from President Biden yesterday. You put out a statement calling it, quote, "a step backward." Why?

JAY TIMMONS: Well, what we were happy about is that the administration recognizes that we have a pretty severe situation here, especially for working families all across our country. But the gas tax holiday is really, unfortunately, just a short-term solution. You know, I don't like to use tired, worn out phrases, but it really is a Band-Aid.

We just accomplished something extraordinarily significant in terms of infrastructure investment and the bill that passed the Congress on a bipartisan basis. And we are just-- we're just starting to see the investments from that particular legislation move forward. This would actually take money out of the system, a system that is already stressed by inflation and the cost of materials that states are having to secure to build roads and bridges and to repair them.

And so we don't want to take money out of the system at a crucial time like this. There are other ways to deal with it. And I'm happy to discuss those. And we certainly have made those points known to the administration. I actually sent a letter to the president today on those points, and we'd like to see action on those fronts.

RACHELLE AKUFFO: Yes, because, obviously, a lot of people looking for solutions. So, yes, please break down some of those that you think would be, really, the most useful and effective at this point.

JAY TIMMONS: Yeah, and I have a feeling some of these points came up today in the discussion with Secretary Granholm-- my assumption is they came up today. I wasn't there. But we're talking about leasing on federal lands. We're talking about making sure that we can move permits and eliminate the backlog there.

We're talking about being able to mine critical minerals here in the United States. We're also talking about making sure that we're not revising our air standards until we've had the opportunity to achieve the provisions of previous standards that were set by the EPA.

All of those provisions that I just outlined here will help us achieve certainty in the energy markets. And we believe it will help drive down the cost of energy in the United States, the cost per gallon of gasoline. Manufacturers care greatly about this not only because our employees are impacted directly, obviously, by these higher energy costs, whether it's home heating oil and fuel or gasoline that they put in their cars. But manufacturers alone use 1/3 of the nation's energy supply making the products that we deliver to Americans every single day.

DAVE BRIGGS: Yeah, you called it a Band-Aid-- maybe one of those Band-Aids falls off, like, the next day and doesn't really accomplish very much. Do you think it would bring down, ultimately, the price at the pump? Some feel it would actually increase demand and increase prices on the back end.

JAY TIMMONS: Well, you know, I've heard that discussion and that argument. And I'm not an economist, so I'll qualify it by saying that. It seems to me that gas prices are going to have to come down far more significantly to really worry about that increase in demand.

Having said that, I mean, I think there's a tremendous amount of demand out there right now. There have been two years of folks sitting at home kind of waiting to spend money, to go on vacation, to visit friends and relatives. And I think that demand is there no matter what.

And you're seeing it manifest itself in terms of spending down savings accounts or adding balances to credit cards. So I think it's going to be hard to kind of squeeze that demand out of the market right now. I think the better solution is to reduce the long-term cost of our energy products by doing all of those things that I mentioned that we sent in a letter to the president today.

I had a chance to actually talk with the president last week at the signing of the ocean shipping bill, which, by the way, I think will help ease the bottleneck of the supply chain in this country. So we were very pleased that he signed that legislation. But I did explain that we needed to do more in this country.

We're so optimistic-- manufacturers are really optimistic. It's 82% of our members say that things are going to get better eventually. But they're optimistic because of the conditions that generally exist in the United States. But there's certainly more we can do to incentivize investment and growth and to reduce the cost of energy here.

SEANA SMITH: Well, Jay, you mentioned the fact that some of the manufacturers that you're speaking with are optimistic, but we've been hearing more and more talk about a possible recession. I'm curious, since you represent 14,000 companies-- you have 14,000 member companies, how many of them are very worried about a recession? And are they cutting back or doing anything because of that fear?

JAY TIMMONS: Well, I don't think you've seen dramatic changes yet. And I'll explain why in just a second. 52% of our members do you believe that a recession is on the horizon. But as I said, 82% are still optimistic about the future. So it's a little counterintuitive.

One of the reasons that you're not seeing dramatic actions being taken in terms of workforce and what you might typically see as a recession looms or as you go into a recession, which would be a reduction in force, is we don't have the force. We are one million-- we've talked about this before-- today, we're one million workers short in our sector. The last time we talked, it was $800,000, and that was just a few weeks ago.

So we're trying to catch up. We're trying to hire workers. We're not the only sector that is experiencing this shortage of workers. But it is acute, and it's helping to drive up the cost because we're, frankly, having to pay more for labor.

So these costs, added on top of higher energy costs and other costs that are coming into the system, are helping to drive inflation. And we're trying to get a hold of that, we're trying to get our arms around that because we don't want to see a recession. I, for one, don't believe a recession is inevitable as long as we do the right things. And the right things start with reducing the cost of energy in this country.

DAVE BRIGGS: I'm curious-- I was going to ask you about that worker shortage, which you say is now at a million-- 45% of manufacturing executives said they had to turn down work in the last year because of too few workers. Do you have thoughts on recruitment, let alone retention, of existing employees? How do you do it?

JAY TIMMONS: Yeah. Well, so, I think-- I'm actually at a conference right now talking about executive leadership. And part of executive leadership is being able to inspire and incentivize your teams and keep them motivated, and focused, and happy. And I think a lot of leaders are learning how to do that, or refining their skills and doing that.

That's one of the most important things about retention. Sure, compensation is important. But having an environment where you feel welcome, and trusted, and you can bring your whole authentic selves to work is extraordinarily important. The other thing that we're doing at the NAM is through our manufacturing institute, we have several programs that are designed to attract different parts of our society into manufacturing.

So for instance, we have Women Make America, our program that's really an ambassadorial program for women who are in manufacturing being ambassadors to other women, trying to recruit them into this sector and show them all the opportunities that are available in manufacturing. We have our Heroes Make America program, which helps train veterans.

We have a Creators Wanted program that is attracting the next generation with our hands-on experience that is actually on the road. So we're trying to do that from the association perspective. But each company is also doing the same thing in trying to attract and show all the benefits that are available in manufacturing-- the sector of the economy that pays more than any other sector.

So get that off the table. That part's the easy part. We pay more than any other sector. The other thing that folks need to understand and that we want people to understand is that manufacturing today is high tech, it's sleek, and it's really fun. So we're trying to get more people to understand that as well.