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00:00This is my kitchen table and also my filing system over much of the past three decades. I've been an investor the highest quality of mankind. I've often thought as private equity. And then I started interviewing on my watch here interviews those I know how to do. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said to 250. I said fine I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest man to rise out right. I mean the hall of flags at the Commerce Department in downtown Washington just had a conversation with the secretary of commerce Gina Raimondo. She is clearly one of the most healthy people in her generation. Harvard Graduate. Rhodes Scholar. Yale Law School graduate. Venture capitalist. Treasurer of Rhode Island. Two term governor of Rhode Island. President Biden asked her to serve as secretary of commerce and she is one of the point people helping to get through his infrastructure legislation. Many presidents have proposed infrastructure proposals and and bills but very few have got them through. So why do you think President Biden's bills will likely get through if you do. I think we will. I think we will. I have had numerous conversations with people on Capitol Hill and there is bipartisan support for the bill. Maybe not all of the bill and all aspects of it. But I think there's a growing recognition that we'd kick the can long enough. And there are there's there's a backlog of infrastructure in every state in America. And I think this will be the moment and the president is determined. So you know that helps. President has two types of infrastructure traditionally infrastructure bridges and airports toll roads and so forth. And he has that in his first part of his infrastructure bill. He has a second part. That's the caring part which deals with let's say elderly care child care kindergarten prekindergarten so forth. Why did he do it that way. And are people confused when he calls things relating to people infrastructure. Yes people are confused. I think he did the right thing. I think investments in the care economy in and in those systems which by the way are fraying all over America I know it from Rhode Island my own state. We need to rebuild train systems of training I.T. so these workers can have I.T. wages. It's vital by the way. You can't go to work and be productive if you can't have good access to child care or elder care. So are people confused. Yes. Are there some Republicans that are balking at the inclusion of the CAC economy. Yes but I like our chances of getting it through. The president's committed. Explain this to the American people. We have a one point nine trillion dollar stimulus package. The president got through at the beginning of the administration. There were no tax increases to pay for it. We borrowed all that money. Why not do the same thing with the infrastructure bill. Why not just pass it and borrow the money. Why do we need tax increases. Call it old fashioned but the president thinks we ought to pay for our investments just as any family would. You have to pay the bill. You can't put everything on the credit card and not pay it. The rescue package was an emergency. There were lives on the line. We have to get the vaccine out. We had to meet the needs of the pandemic. That was a crisis an emergency response. And so he felt it was appropriate to push for that. The these investments he feels very strongly ought to be paid for. His proposal is to go ahead and raise taxes on companies. He's been very clear. His red line is no one making less than four hundred thousand dollars a year will see a penny of their taxes increased. And by the way I think it's responsible. You know we can afford it. Weak business is you know better than I do. There were dozens and dozens of very profitable multibillion dollar companies last year that paid nothing in taxes. Closing those loopholes and using that money to invest in infrastructure is a good investment. They're two different types of tax increases. He's proposed on the first part the traditional part of the infrastructure bill. He's proposed raising the corporate tax. Some people say that the president might be prepared to compromise at a slower rate. And what is your view on how high the rate needs to be in order to pay for some of the things in that bill. Well you know he has come out where he has come out at 28 percent. We are willing to compromise that answer to your question. We think this is a reasonable proposal. It isn't as high as it was 21 percent. It was unreasonably low. And by the way most business people will will admit that they were expecting it to go back up to something reasonable. And so anyway we put forth that we put forth one proposal you know investments over an eight year period paid for over a 14 year period. But there's compromise. And if the Republicans were to come back with a slightly lower rate maybe we pay for it over a longer period of time. I'm sure we could meet you find that common ground. OK. So your job as secretary of commerce among other things is to be a liaison with the business community. And so as you were liaison with the business committee what do they say to you. They say I don't want to hire tax. Increase or I can live with something but don't quote me what do they tell you exactly. Some have been for it. So I know Microsoft sales force a number of companies Siemens the auto companies they've come out for it you know in favor of the jobs package. Others have said yes there ought to be an increase in the corporate tax rate. Everyone seems to agree that it is wrong that we have so many companies who paid no taxes last year and we have to close loopholes that enabled that. You know a lot of people maybe they feel 28. Is it is it is it a bit too high. Maybe the 26 27 might be a better number. But I haven't. I have made dozens and dozens of phone calls to CEOs across industries. They agree we need big investments in infrastructure. They applaud the president for calling for not just traditional infrastructure. They like the investments in research and development broadband technology semiconductors. And they know that higher corporate taxes are a way to pay for it. Now people in washing off the measure one's power by how long it takes to get your call returned. So when you're governor of Rhode Island you're calling the CEO of Microsoft. I don't know if you get your call returned right away. Probably you do. What about when you're separated. Commerce. How long does it take to get your call returned. It's pretty quick. So far it depends who you calling obviously. And I because of my career in business and my my career in public service I already have strong relationships with many people in corporate America. So they know me. They return my call. But look here's what I would say there. Is it does general desire to help this administration be successful because people realize we have to be successful. You know that the business leaders I'm talking to they they know we need to make these investments. They know we need to compete. They know we have to compete with China. They want to help us be successful. So when I call on behalf of this administration I've so far calls are returned speedily and they're engaged. So let's talk about the individual tax increases that are part of the care part of the infrastructure bill because that probably will be more controversial I guess. Yes. So the president has said no tax increases as you say for anybody who's making 400000 below. And the people above that they will see a tax increase that could go as high as thirty nine point six percent. Yes. So do you expect that that will be compromised as well. Or do you think the president is determined to get everything he's proposing. He hasn't. He's proposing it today. So I wouldn't want to lead with her chin and say we're going to compromise on day one. But I will say this. The president wants bipartisan action. And if compromising is a part of that it's what he wants to do. He's been crystal clear with us. We were the only thing that's unacceptable is getting nothing done. We have to get things done. So the capital gains trading capital gains like ordinary income absolutely will be controversial. Is there room for compromise. Maybe. But you know he feels that we have to raise those taxes and we'll compromise as we go. Let's talk about your background for a moment. Some people may not know your background so you grew up in Rhode Island. And were you the child of privilege parents very wealthy parents or not. Until I was not. My dad bought his whole life at a watch factory. The bullet watch factory. Rhode Island was once the jewelry manufacturing capital of America. My mom stayed at home three with three kids. I grew up in a pretty small house. There were six of us. My grandfather lived with us. He was an Italian immigrant. I joke that when I went to college when I went to Harvard I was so excited because I got my own bed because I shared a bed with my sister until then. So like we were working class family we weren't poor. My dad lost his job in his late 50s. So things got tougher after that. But we just. We were just kind of working class Rhode Islanders. Rhode retirement is a small state as I mentioned before. But everybody must know everybody because Senator Reid from Rhode Island says that he was your babysitter. It is a fact. It is a fact. He was my next door neighbor. We went to the same high school. By the way as did Tom Donilon former national security adviser and Mike Duncan we all went to the same high school. We all knew each other. We all the Donald's and my family we all made a living as kids working at the same summer club on the same beach. They were all talented people but only one of them became a Rhodes Scholar. And that was You would be me. So you won a Rhodes scholarship. Only 32 were picked every year. And then prep for that. You went to Yale Law School. Very few people get into Yale Law School. So with a Harvard degree and Oxford degree a Yale Law School degree you could have gone anywhere. Why did you go back to Rhode Island. Not that it's not a great place. Many people go to New York Washington Los Angeles. What what propelled you to go back from Rhode Island. Because I loved it and love the place. I felt I owed something to the community. And there's something special about building businesses in the community where you're from and seeing them flourish in a community you care about. So you ran initially for secretary to the treasurer position of Rhode. Why did you want to be treasurer of Rhode Island. People wouldn't say Harvard Oxford Yale Law School 10th person should be treasurer of Rhode Island. You know it's funny when I ran that was the reaction I received. I called my parents to say I was doing this and they said pertaining you have such a good job. My mother started to cry. Politics is such a dirty business. I just I I believe in service. I believe in public service. And and I was qualified for the job. I actually had a finance investing background which is what the treasurer does. I was chair of the investment committee. I just believe in service. But what you got the job. You started cutting pensions and that was very controversial. Why did you do that and how did you take that opposition to that and enable you to become governor. So I didn't cut pensions. I would say we everyone kept what they earned. The system is broken. You know for better or for worse I was able to do the math and understand very quickly that the system would run out of money before too long. And we would have to go to people and say I'm sorry we're going to cut your pension in half. It was dishonest. I couldn't live with the dishonesty of telling teachers and firefighters that their pension would be there when I knew it wouldn't. So I just we fixed it. By the way this pension system today is stronger than it's been in decades. And everyone also said I wouldn't be re-elected but I was elected handily because I think people want the truth. And I think people want people like me to solve problems. All right. So you were reelected and your then elected governor of Rhode Island. Many people said you wouldn't be elected governor as well. Reelected as well. So you're governor of Rhode Island and many people thought you could be running for president this time. You chose not to do so. Why did you decide to give that position up to become secretary of commerce. Because in Rhode Island you were the big everything. You're the 800 pound gorilla because you're the governor and yet a lot of power. And you were very powerful in the governor's associations and so forth. And secretary commerce is a great job. But you're not the president. So why did you decide when the president asked you to do this to do this. Because I wanted to be on the team that helps America build back. In many ways we're really struggling right now and as a nation as an economy and I want to be on the team that gets us back on our feet. And that was very appealing to me. You mentioned briefly your business background. You were governor you were treasurer but you were actually actually in the venture world. Yes. What was the. That you were did. You have started your own venture fund. Yes. So for about 11 years I was in the venture capital business first at a firm in New York and then was a co-founder of Point Judith Capital. We were an early stage venture firm. I focused on health care. So I invested in medical device and health care I.T. companies which I loved actually. And that and that experience enables me to be better commerce secretary. I know entrepreneurs what it takes to have innovation. Another thing that we run here is the patent office that's in commerce. You know I saw I saw strong patents matter in order to protect innovation. Now the secretary of commerce has been in an unusual position. You have so many different parts of the Commerce Department being called by some Noah's Ark because you have so many different things that were put together. You know I was here with the weather bureau. Is here somebody tariffs and here somebody thinks space commerce census too. So when you took the job did you realize how many different disparate things you have to deal with. And did other secretaries of commerce or had this vision before say this is what you have to worry about. Did you get any good good advice from people. Yeah I so I've talked to many and I got terrific advice. I think that's what makes the job fun and hard. It's hard it is hard to learn about the details of fisheries fisheries management trade census space commerce tariffs semiconductors. But for me that's part of it's intellectually fascinating. And if you like to think if you put your back into it you can have a big impact across a whole range of topics. So you decided to take this position. You called your mother and you said guess what I'm giving up being governor of Rhode Island. I'm going to be secretary commerce. What did your mother say. She's 90 now. And she said I hope you can help by. Let's talk about your job as secretary of commerce. Historically the secretaries that I've known have said well I have two jobs. One is to represent the president's views to the business community and then the other job is to represent the business community's views to the president. And both are not easy. So you have those two perspectives as well. Is that what you see yourself as his liaison to the visit committee and also the presidents and the leaders on the business committee to the president. Yeah. That is a big part of the job. And I I think it's important for the business community to know we want to hear from them. You know that that is very important. You know they I am very available to the business community and we want engagement. And I bring that and bring that information to the president who by the way is genuinely very interested to know what do we have to do. So American businesses can compete. Right now there's a shortage of semiconductors it appears in the United States. Is that because of supply chain problems CORBETT. And what are you doing in the president doing about this. It's because of supply chain problems. We have to shore up our supply chain. We have become overly dependent on a few suppliers in a few countries. And we need to make investments. So we what we are doing is working with Congress to pass a 50 billion dollar semiconductor supply chain fund so we can incentivize semiconductor companies to build to manufacture chips in America. So when you were looking at the campaign we look at the campaign. President Biden didn't support a lot of things that President Trump did. So some people are surprised that he's kept the tariffs in place. You oversee the tariffs the steel tariffs that he put in place are still there. Are the tariffs on aluminum are still there. And the tariffs relate to a lot of products related to China are still there. Was there any insight you can give us about why they're still there although we don't agree with the way the Trump administration handled many things. The one one of the things is they brought to light the fact that our competition with China is serious. It's a strategic competition that would define our time. And President Biden agrees with that. So we are going to continue to play tough with China. We're going to continue to use all the tools at our disposal to protect American workers and businesses from unfair practices by the Chinese government. And so for the reason that we haven't made those changes is is really that we need to continue to to to be aggressive with China. European countries aren't happy with the tariffs on steel and aluminum. The president's going to the G-7 summit soon. You expect we'll see any news relating to that when that summit occurs relating to the tariffs. I expect a robust discussion between now and then. The Europeans are not happy. I've had many discussions with my counterparts in the E.U.. They are our allies. Europe of course is not a threat to American national security. China is oversupply and flooding their market and our market with cheap steel. That is the national threat. And we need to work with Europe to prevent China from doing that. So some of your predecessors have done trade missions taking business people around the world. Right now you can't do that of course. Yeah as a it. But the administration has seemed to say we don't really want to have greater access to foreign markets so much that people can build factories overseas. We want them to build them here. Is that part of your ethos as well. Not necessarily to help people build things overseas but maybe build more here. Well we need to do both. We need to do both. So I plan to be active in export promotion. We need to help American businesses to export. We do need to continue to have free markets. I mean even with respect to China we need to do business there. We need to export there. But right now we need a domestic focus. And so far at least for the first 18 months a lot of my focus will be domestically. Now you've been running the department to some extent remotely I guess because why we're in the apartment now. A lot of people are not here. Yes. I do expect at some point the people will come back and you'll be going back to the way that department was run before everybody shows up for office work five days a week or. What do you think will happen maybe now five days a week. Every week but certainly predominantly. Yes. Back in the office. It'll be it'll be like business. You know they'll all I think work from home is here to stay for a certain part of the week. But. Around this is a ghost town. I mean I hope in a few months from now you'll see some vibrancy here. If the American people are watching. They don't know much about the Commerce Department or what the secretary does. What would you like people to know about the Commerce Department and what your principal goal is as a secretary of commerce to help more people get back to work and decent paying jobs. It's really very simple. And everything that go you know trade policies that level the playing field so American workers can compete. IP policy that allows innovation to continue helping startup companies so they can evolve. But all of that fundamentally at the end of the day I learned this as governor David. Americans don't want a handout. They just want a chance to have a decent job. And so I'm obsessed with that. I was obsessed as governor. I'm obsessed with that now. And that's what everything I will do will be through that lens creating decent jobs. So when you decided to take this position you called your mother and you said guess what I'm giving up being governor of Rhode Island. I'm going to be secretary commerce. What did your mother say and choose excited. She she's she's 19 now. And she said I hope you can help Biden. You know that. That's her. Biden. Biden has to be successful. I hope you can help him.

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The David Rubenstein Show: Commerce Secretary Raimondo

U.S. Commerce Secretary Gina Raimondo talks about President Joe Biden's infrastructure bill, trade with China and Europe, and the future of working at home. She's on the latest episode of "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded April 28. (Source: Bloomberg)

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