Rep. Seth Moulton: “Our Response to Covid Will Affect Both National Security and Economic Security”

Andrew Schwartz: You're listening to The Reopening. The podcast that asks, "How will America work through the COVID-19 pandemic? How will we innovate, and how will it change our global economy?" Each week we invite top business leaders to share their insights on the road to economic revival here at home, and around the world.

Scott Miller: U.S. Representative Seth Moulton, a Democrat who represents Massachusetts’ 6th Congressional District joins the podcast this week. Congressman Moulton is a member of the House Armed Services Committee, and the House Budget Committee. A former Marine Corps officer, Mr. Moulton has served has served his district since 2015 and offers his perspective on the health, economic, and security challenges we face.

Andrew Schwartz: I’m Andrew Schwartz.

Scott Miller: And I’m Scott Miller.

Andrew Schwartz: And this is the Reopening.

Andrew Schwartz: Congressman Seth Moulten Democrat of Massachusetts, Thank you so much for joining us today. You are, you are our first elected official first. Can I ask you to tell our listeners what part of Massachusetts you represent.

Seth Moulton: So I represent the northeast corner of the state, Everything from a couple of towns north of Boston to the New Hampshire border and from the coast, west to towns like Billerica and Bedford. It's a wonderfully economically diverse part of the district. We have everything from small farms to the latest in Biotech, high tech defense tech, cities and small towns, it is not a place of a lot of highways and strip malls and chain restaurants. It's a place of small towns with real character and places with a lot of small businesses that we want to preserve.

Andrew Schwartz: Yeah and that that's why I wanted you to describe it a little bit because your districts really a slice of America. I mean, can you tell us how your constituents have been affected so far by Covid and, you know, what's your expectation for the coming months and how you're going to come out on the other side of it.

Seth Moulton: Well, we've been hit hard. There are a lot of people who have lost their lives even as the state has in general, had a fairly exemplary response and our trends are all in the right direction. Now, even as many other states are headed in the wrong direction but the fact the matter is that big numbers aside trends aside, people have lost their lives to this virus. It's particularly hit communities of color and we saw that very early on. I remember a hospital leader back in March, saying, I don't know what it is, but it just seems like people of color are getting hit harder with this.

I think it's pretty apparent now that communities that just have poor access to health care don't have the ability to fight this off as well. And this is a virus that we have to fight with our immune systems. That's all we've got. Because we don't have vaccine or really effective treatments, yet it certainly hit the city's harder and it's hit those workers who who are on the job, you know, so many people in the so called “expendable class” are now the essential workers. We talked a lot about nurses and doctors. How about this hospital orderlies that literally have to clean up the mess. I mean, people who are really on the front lines of this fight bus plane train cleaners grocery store workers, you know, they're getting hit hard too.

Scott Miller: Yeah the truck drivers and the people who are have really been essential to keeping the rest of us, you know, with food on our refrigerator and able to do our job is there supporting the services that we use every day. So, but they're, they're not often often heard from

Seth Moulton: No, I've never thought of grocery store workers as heroes and yet.

Andrew Schwartz: Yeah.

Seth Moulton: They show up to work every single day. It’s heroic in the face of this virus. And how many people have to interact with every single day.

Andrew Schwartz: And you know every time I'm in the grocery store, now I'm thanking all the workers, even more than I normally do, because you know they're the ones who are in their everyday exposing themselves.

Seth Moulton: I know the first grocery store worker who died in my district was a wonderful woman named Betelina Williams truly amazing story to read about her life and her loving marriage and everything. In response to her death, I asked the Governor for emergency personnel designation to designate grocery store workers as emergency personnel so that they could get priority access to testing and PPE and and I'm proud to say that the Governor, who's from a different party than myself, did so within 24 hours.

Scott Miller: But that's, that's great response. Well, great initiative on your part, great response by the Governor. But, you know, in the United States. We have a federal system. And there's lots of different levels of government with different responsibilities and different powers. How has that coordination been going? You obviously I think the entire message is delegation and the Congress and the Congress is Democratic and a Republican Governor, Republican President. So how’s the working relationships how’ve they've been over time.

Seth Moulton: So at the state and local level, it's been incredibly bipartisan my team including my specific coronavirus task force has been in regular communication with the governor's coronavirus Task Force sometimes on a daily basis or multiple times a day, especially as this was heating up. We've gotten quick responses on things like the story that I just shared. Look, I've got some criticisms of Governor Baker I haven't been shy about sharing them. Of course I'm someone who's not afraid to criticize my own party too, but because we have a strong working relationship, Massachusetts has responded well to this crisis. Sadly, that's not the case across the country.

Scott Miller: You mentioned the unique kind of small town character and that the distinctiveness of the villages and towns and places in your district. Small business has been hard hit by both the the virus itself and the public health crisis, but also the many of the shutdowns that proceeded from it and the economic downturn particularly exposed small business, what have you seen in your district and how's that going to play out as they reopen and we get back on our feet?

Seth Moulton: We obviously right, I means small businesses have been hit hard, and they're the lifeblood of our economy, they're also the lifeblood of so many of our communities. That's certainly the case and in my district, and it's sad to walk down the street and see so many storefronts shuttered, so many people out of work and so many families that have owned these businesses, sometimes for generations. And fought to always keep them alive and thriving and contributing to our communities, you know, really suffering and wondering whether their businesses will ever be able to reopen.

So Congress came in and tried to help, but we came in big and heavy and quick. We got some of the numbers wrong. We, you know, perhaps gave a little bit too much and unemployment encouraging some people not to come back to work and few things like that. But the initial response was good and a lot of small businesses were eager to take advantage of that. There were some real problems in the administration of the aid, though. So Congress got the aid passed in a bipartisan manner I would add, and the President signed it but then his administration is responsible for distributing that aid and that's been much more of a hodgepodge. Some businesses have gotten checked right away. Some businesses, a couple months later, are still waiting on those loans to come through.

Scott Miller: Yeah, given the scale and the immediacy of it that attempting to implement a brand new program. We shouldn't be surprised. Looking back, that it was rough, but you know, a lot of small businesses aren't accustomed to two lines of credit and those kinds of things. They're operating on cash flow. They're operating with you know with with sort of family employees. There's some special problems there that are actually kind of hard for our federal government to address. What do you think we should be doing going forward.?

Seth Moulton: Well that's right because big chain stores have access to all sorts of financing. I mean, they can call a banker on Wall Street and figure out how to bridge this crisis. That's not the case for the average small independent restaurant owner or shop owner and so there are a couple things we have to do. First of all, I mean, look, you can't find a politician anywhere, who says that he or she favors big businesses over small .

Scott Miller: Right, right.

Seth Moulton: Right? And yet that's that's what our policy looks like, right, I mean, did you pay any taxes last year just personally?

Scott Miller: I did, yes, actually.

Seth Moulton: You did, I did too.

Andrew Schwartz: Me too.

Scott Miller: I remember quite well.

Seth Moulton: I bet all three of us paid taxes and yet Amazon did not. So think about that all three of us, or even just one of us individually paid more taxes than all of Amazon. Which is profiting off of this of this crisis because some things that used to go to a small local store for now everyone's just going to Amazon. So our policy is set up to favor big business. But we're trying to help small businesses. And we have to make some fundamental changes and how we think about our economic policy in this in this country, unless we just decide. Nope. We want everything to be a big box, you know, nameless chain. If we want our small towns to thrive with small family owned businesses, then we've got to change our policy and make sure that they're getting help. We also just have to have more aid. I mean, the initial tranche of aid was great, but it's not enough. I saw some numbers recently, this was more focused on released to local governments rather than just small businesses, but some estimates said have said that the hit is about $1.3 trillion and we've delivered about $200 billion in aid.

So in other words, we need about six times as much as we've already done. And the point that I made as vice chair of the Budget Committee and a recent hearing I said, look, nobody looks back at the Great Depression and says, you know, the problem was that the federal government did too much, or acted too quickly.

Right, so it's a time to go hard, go big, be aggressive. I'd rather overestimate how much people need an unemployment, then underestimate, but at the same time, we've got to have a bipartisan commitment coming out of this that we're going to pay these bills back and that we're not going to continue on this path of enormous widening deficits every single year because otherwise we're just immorally and unethically handing that bill to our kids.

Andrew Schwartz: So you believe that bipartisanship as possible going forward because you’ve seen it at the state and local level. And you’ve seen it in congress as well.

Seth Moulton: Well, I've seen it to a limited extent in Congress, but we certainly you know in passing some of these initial aid packages we did see bipartisan compromise and even cooperation. I've seen it a lot, at the state and local level. I mean, I have a lot of Republicans that I represent, and I always remind everyone at my town halls, I hold a lot of town halls and I always remind them that I'm your representative, whether you're a Democrat, or Republican, an Independent whether you voted for me or you voted for someone else or you didn't vote at all. I'm your representative. I work for you. And that's the attitude that I think we all should take. My district voted for me as their congressional representative I'm a Democrat and the same election it voted by 13 points for our republican governor. So there are a lot of people in my district that I represent who were not afraid to vote for the person over the party. But I'm afraid that atmosphere that we're fortunate to have in the sixth District of Massachusetts is not the atmosphere that I see in Washington today.

Scott Miller: Is there a way to set some of those habits of cooperation now, in terms of what's happening in the house?

Seth Moulton: Well, one of the things we're certainly going to try to do just in the next few days is work in a bipartisan manner to pass the NDA,The National Defense bill. And that's incredibly important for our troops out there on the front lines you know a lot of people aren't talking about national security because we're all focused on fighting fires here at home, and yet it's a global pandemic. So this is a time when we should be talking about this a lot, right and I think that in working on the defense bill in the House, it's an opportunity for us to show some bipartisan leadership, leaving these political divisions at the water's edge as we always used to say, and doing the right thing for our troops and our country, over the politics of the moment.

Andrew Schwartz: Does the use of the military and our foreign policy change in your view, given what we're dealing with the pandemic and moving forward out of it?

Scott Miller: Which is a global problem in and of itself.

Seth Moulton: That's right, it's a it's a global problem it's hitting our enemies as well as our allies. But there's no question that budgets are going to be tighter across the board. I think that's one of the most obvious effects here, we do have to pay back these bills and the idea that the defense budget can keep growing at the pace at which it's grown for the last several years is probably unrealistic. So what does that mean, it means that we have even less room for the parochial interests or as Senator McCain, put it the “Military Industrial Congressional Complex.” When it comes to defense spending, you know, it's not just about, well, we should throw in a few more F-35’s because that's a few more parts made in my district, no. We've got to be aggressively cutting costs, cutting fat, cutting old systems to make room for the new in order to keep up with China and Russia and emerging threats around the globe.

Scott Miller: You know, it's a great point with you being on both armed services at the Budget Committee, you're one of the few people who can make it this cogently but you know we were running very fairly large deficits at full employment peak economic growth, sort of, before the pandemic now we have much lower economic growth much fewer many fewer revenues coming into it, governments at all levels and yet. And then we increase spending by about $3 trillion, this can't go on forever at least I don't think it can.

Seth Moulton: You know it cant and so we're going to be looking for cuts across the board and and that's a risk for national security unless we aggressively modernize. That's what China and Russia are doing, you know, China is not trying to compete with us by building 20 aircraft carriers so they have a few more than us. They're just building missiles to defeat our aircraft carriers and guess what those missiles are a lot cheaper. In fact, you can buy about 1250 anti carrier missiles for the price of one aircraft carrier. So China is thinking about this in a very smart way, not just in terms of their security, but in terms of their budget and we've got to do the same.

Andrew Schwartz: What else do we need to be thinking about in terms of defense going forward?

Seth Moulton: Well, we've got to think about how we defend ourselves from pandemics. Now we know scientifically that this pandemic originated in China, but was not caused by the Chinese government. It could have been caused in part by negligence. We don't know that for sure. But the point is that something like this could be caused by a government in the future or it could emerge from any country in the world and infect us all and put all of our lives at risk. So we're going to think about this, not just as a medical problem or as a healthcare problem, but as a national security problem and that has implications well beyond the traditional realm of national security. I mean, it has implications for our economic security. Why are all our medical supplies made in China? I mean, that might make sense from a free trade perspective. I know free trade is not very popular in Congress, these days. I'm someone who believes in basic economics and believes there's a role for free trade, as long as it's fair trade, but we also have to put that national security piece into the equation. And it may be marginally cheaper to make all our medical devices in China. But if that leaves us high and dry in the face of a pandemic like this because we're counting on a foreign supplier for basic medical needs, then that's a real problem and we got to rethink those supply chains.

Scott Miller: Yeah, this is you know it's funny because we we evaluate risk differently and we're evaluating exposure differently. Used to be that distributed supply chains were seen to be an advantage because we're trying to protect against the hurricane or the flood or, you know, the natural disasters that occurred in one place and now a sudden we need resilience when the natural disaster is everywhere.

Seth Moulton: I think Scott. The point is that there's got to be a balance. Yeah, and I'm not saying that we should never manufacturer anything in China again. I mean, that would go against the basic principles of not only distributed man manufacturing but basic economics and the advantages, the free trade and all that but but we do need to make sure that we have some capability here at home. I'll give you another example. I remember this from when I went to business school several years ago back in 2011 or whatever my professor pointed out that if Southeast Asia cut off their supply of flat screen TVs, flat screen monitors, anything flat screen, you probably are all surrounded by several of them at this moment right. We don't have the capability to build them here in America right now. That doesn't mean we don't have the technical knowledge or we couldn't you know, build the manufacturing capacity, but if you just said tomorrow, America, you got to start producing flat screens, we wouldn't be able to do it and that that is a real concern for our national security.

Andrew Schwartz: A lot of really bummed out people with no flat screen TVs to watch.

Scott Miller: Well, or bigger issues than that, I think.

Seth Moulton: I think there are bigger issues than that.

Andrew Schwartz: Yeah.

Scott Miller: But that would be important.

Andrew Schwartz: Well speaking of big issues though. What do you think the biggest foreign policy challenge facing the United States is?

Seth Moulton: The rise of China. I mean, look, you know, if you look at our national security doctrine, the most immediate threat is Russia, they have a massive nuclear arsenal. That is that is aimed at us. They've been remarkably successful at poking holes in the fundamentals of our democracy by interfering in our elections. That's the most immediate threat. But I'm a member of the bipartisan future defense Task Force. It's Co-chaired by myself and Jim Banks, an Navy veteran from Indiana and is a Republican and you know sometimes we joke that we might as well call this the China task force because when we look not to next year, but 20 or 30 years out, it's all about China, the rise of China and the clear threat that they pose to both our economic and our national security.

Andrew Schwartz: Are we too hyper focused on China? Are we missing something?

Seth Moulton: Well, of course, there always has to be a balance. I mean, I think we ignore Russia to our peril. They're putting bounties on American troops right now in Afghanistan. Their nuclear arsenal is the biggest in the world. They are undermining our democracy through social media and trying to tamper in our election as we speak. It's not a question as to whether they'll be involved in the 2020 election, they already are. So they’re the immediate threat. We face the ongoing threat of terrorism and there are emerging threats around the globe. But I think we take our eye off China to our peril, in the long run. And so we have to have a balanced national defense, without question, but I don't think we're investing enough in the threat that China poses.

Andrew Schwartz: What's the issue that we're all not talking about that needs to be talked about?

Seth Moulton: Biotech and how important it is that we win the biotech race. I'm so proud to be from Massachusetts. We are the biotech leader of the planet right now, but the competition isn't from Silicon Valley, as it was when the tech boom you know played out. The competition is from Beijing. They want to win this race and I think what we don't appreciate are the consequences of losing this race to China. We won the tech revolution. And that means that American computers, operating systems, software, everything tech. We've dominated this, we've done, no one ever, we never worried about people going and buying transistors from the Soviet Union, we knew we were ahead we knew we won that race. We knew that it was much easier to get allies to buy our stuff than our Cold War competitors. The next big revolution is not the tech revolution but the biotech revolution.

And it's not just about medicines. It's about things like our national security because we will use literally use biotechnology. To build weapons to build defense systems. And if we lose this race to China, and every time you want something biotech manufactured the world leader is in China and all the economies of scale go to China, then we're not only going to have a big health care problem but big economic problem. We're going to have a massive national security problem on our hands as well. China knows this and they're investing a lot of Chinese Communist Party government money in winning the biotech race. We're not doing, our private sector is leading the way and the American private sector is the best in the world. But China's putting every ounce of government money and private money into winning this race. We've got to have more government investment to do the same.

Andrew Schwartz: So is it your view that we're losing now or that if we don't ramp up investment. We're going to be losing?

Seth Moulton: We're still number one. But China is catching up very quickly. And at some point, those, those lines will cross and China will be ahead of us and I think that point is coming sooner than we'd like to think.

Scott Miller: Well and comparing it to tech development of 50, 40 years ago there was a lot more government investment on the demand side that helped to create that victory in technology so,

Seth Moulton: That's right. Most of the innovations still came from the private sector.

Scott Miller: Yes, oh yes.

Seth Moulton: Government investment was a huge part of driving and that's what China is doing. It's what we did to win, not just the tech revolution, but fundamentally, the entire Cold War and it's what we need to do here as well. And I think that's the answer your question, that's the piece that we're missing the most but it's important to remember that not only is this an economic issue, a health issue, a national security issue, It's also fundamentally a values issue. Because the ongoing conflict with China is going to be different than the Cold War with the Soviet Union. But at its core, it is about a system of government. It's about the values that we have for freedom and liberty. For self-governance and democracy and losing a race like the biotech race is not just going to have consequences for biotech, or even as I say for national security. It's going to have consequences for the freedom of humanity over the coming decade.

Andrew Schwartz: In terms of economics. I gather you believe the battle with China is really an economic competition and not a military competition. Can you expand a little bit more on that beyond biotech, and some of the other categories?

Seth Moulton: Andrew, I believe it's both.

Andrew Schwartz: Oh you believe it's both.

Seth Moulton: My argument is that biotech which we've never thought about as a realm of national security will increasingly be a realm of national security. I mean, when we first started making transistors, you know, we probably thought of them more as ways to miniaturize radios than as ways to win the Cold War, and yet that's how we won the Cold War with technology like that and and not to beat this dead horse to death with the Cold War analogies, but you think about it, our victory in the Cold War had as much to do with economic success as it did with military success. I believe the competition with China is the same. It's just going to inhabit new rounds that we haven't thought of as national security rounds before. Biotech being one of them. Obviously cyber security is something that's playing out right now. China steals jobs from America every single day through the Internet and we're not investing nearly enough to stop them from doing that. By the way, I don't think China signing some piece of paper and a trade deal is going to stop them from stealing our military designs and our economic innovations. I mean that's fundamental to how their economy works.

Scott Miller: It certainly hasn't stopped them before they've signed lots of paper.

Seth Moulton: That's right. We've got a we've got to we've got to defend ourselves. I’ve asked this great bipartisan bill to stop the Chinese importation of fentanyl to America because Chinese fentanyl is killing a lot of Americans.

Andrew Schwartz: Right, I remember this.

Seth Moulton: And one of the amazing facts about this is we pass this building to essentially criminalize Chinese producers of this. But the reason we had to do that is because we already had an agreement in place that said China would not export fentanyl to the United States, but the agreement didn't work.

Scott Miller: Right.

Seth Moulton: There was some amazing statistic around, I might get the numbers slightly off. But basically, for the period for the first year that this agreement was in place, essentially a customs agreement American customs officials stopped 1290 shipments of Chinese fentanyl to America and Chinese customs agents stopped four. In other words, they just weren't trying.

Scott Miller: Yeah, big help. Yeah, and all these things.

Seth Moulton: But we can sign an agreement with China that says they're not going to steal our jobs through the Internet, they're not going to enforce that we have to enforce that. And that's why we have to invest a lot more in cyber security as well.

Andrew Schwartz: So what's it going to take for us to check China in a way that will let them know that we mean business that they really do need to stop stealing our intellectual property and they need to respect our ideals.

Seth Moulton: The first thing we have to do is show them a united front. Come together as Democrats, Republicans, Independents and say, look, we're going to have our political debates that's hallmark of a democracy, but when it comes to protecting our values, standing up for our troops, defending our Constitution, you're not going to see any daylight between Republicans and Democrats or anybody else here in Washington. We're all going to stand up for America. That's the most important thing we can do right now and we'll still have great debates on the Armed Services Committee about exactly how to do that exactly how to fund this, that, or the other thing. There’s a great debate playing out in the services now about how to evolve, especially under the Commandant’s leadership in the Marine Corps. He's really challenging assumptions about how to best counter China, we're going to have a debate about that. But when it comes to standing up to China, when it comes to supporting our troops on the front lines there can be no debate that America will stand united.

Scott Miller: That's I couldn't agree more. And I'm delighted to hear that from you as an important member of the Congress and the Armed Services Committee, but you've been very generous with your time today and we wish you great success in the NDAA because it's exactly that message that I think that bill tends to send so thank you for your time.

Seth Moulton: Thank you, and thanks for this discussion.

Andrew Schwartz: Congressman really appreciate it today. This is enlightening for us, really appreciate it.

Seth Moulton: Andrew and Scott thanks for doing this. Thanks for carrying on the debate, we need to have more of this in Washington and policymakers like myself need to need to respond to debates like this by putting good policy into action. So thank you.

Andrew Schwartz: Thanks a million. Hey Seth I want to introduce you to my interns. This is Riley Kennedy, who's here and Nina's here too, I think. Nina, are you here.