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Biden administration considering options on supply chain issue, Buttigieg says

Pete Buttigieg, U.S. secretary of transportation, speaks outside

Pete Buttigieg, U.S. secretary of transportation, speaks outside the White House on Oct. 13. Credit: Bloomberg / Ting Shen

U.S. Transportation Secretary Pete Buttigieg said Sunday the Biden administration is working to alleviate supply chain disruptions that could drain some of the joy out of holiday season shopping and create hassles for consumers into next year.

Buttigieg, speaking on Sunday talk shows, said officials are considering every option for mitigating the supply chain issue, including potentially lifting tariffs on goods from China and deploying National Guard members to drive trucks.

"Certainly, a lot of the challenges that we have been experiencing this year will continue into next year," Buttigieg told CNN’s "State of the Union." "But there are both short-term and long-term steps that we can take to do something about it."

Experts have warned of holiday season supply chain disruptions since at least this summer, citing COVID-19-related shutdowns at production plants, labor shortages and severe weather impacting key cargo ports.

Moody’s Analytics said last week that supply chain issues could lead to higher production costs and consumer prices while hampering economic recovery from the pandemic.

For Long Islanders, the supply chain clog has created shortages on goods such as sneakers, containers, restaurant ingredients and computer chips for cars. And they are paying higher prices for those goods while often waiting longer to receive them.

Consumer prices rose 3.8% last month, compared with September 2020, in the region that includes Long Island, according to the U.S. Labor Department.

Buttigieg blamed the supply chain problems in part on "off the chart" demand. He said American ports brought in a record amount of goods this year "and our supply chains can’t keep up."

"Look, part of what’s happening isn’t just the supply side. It’s the demand side," Buttigieg told CNN. "Retail sales are through the roof."

That high demand is evident in Long Island’s sales tax revenues, which have exceeded expectations in both Nassau and Suffolk counties this year, according to budget documents. Suffolk is expected to rake in a sales tax revenue surplus of between $361 and $407 million, county budget analysts said last week.

Buttigieg said one way to reduce the supply chain bottleneck would be to pass a $1.9-trillion federal infrastructure bill, which includes $17 billion for ports. The passage of that bill has been tied up as Democrats weigh a larger social safety net bill.

Port bottlenecks could also be reduced by making them operate 24/7, he said. Biden announced an agreement this week to have the Ports of Los Angeles and Long Beach, California, run on that schedule. Buttigieg said those ports account for 40% of container traffic.

Other parts of the supply chain clog stem from a lack of truck drivers to deliver supplies and goods. Buttigieg said he is working with states’ departments of motor vehicles to accelerate the issuing of commercial drivers licenses.

Even with potential headaches around holiday shopping this year, Americans are in for a "much better holiday season" as more Americans are vaccinated, Buttigieg said.

"What I know is that the holidays are going to be a lot better this year than they were last year, because a year ago, millions of Americans were sliding into poverty who now have jobs. And a year ago, a lot of us were gathering with loved ones over a screen."

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