SUMMARY: The trade war between the world’s two biggest economies is escalating, as China announced it will raise tariffs on $60 billion worth of U.S. imports, in response to tariffs President Trump levied Friday. Trump remained confident about the U.S. economy’s overall strength, saying “I love the position we’re in.” But will American consumers? Judy Woodruff talks to The Wall Street Journal’s Greg Ip.
SUMMARY: For years, Americans have heard warnings and expressed worries about what’s in their food, from artificial ingredients to antibiotics. Increasingly, the food industry is taking notice and making changes. What do consumers need to keep in mind about a flurry of recent announcements? Gwen Ifill talks to Michael Moss, author of "Sugar Salt Fat," and Allison Aubrey of NPR.
GWEN IFILL (NewsHour): For years, consumers have heard warnings and worries over what’s in their food. Increasingly, the industry is taking notice, too.
The Panera chain was the latest to make a move. It announced plans to remove 150 or more artificial ingredients, sweeteners, and colors by the end of next year. Last week, Chipotle said it plans to remove many genetically modified ingredients. Kraft has also said it will eliminate synthetic colors and artificial preservatives from its famous orange-colored macaroni and cheese. And Tyson’s chicken has pledged to phase out the use of antibiotics in the production of chickens by 2017.
Some of these changes have been praised. Some have been met with skepticism.
We look at what’s happening, and what consumers should keep in mind, with Allison Aubrey, who covers food and nutrition for NPR, and Michael Moss, the author of “Salt Sugar Fat: How the Food Giants Hooked Us.”
Welcome to you both.
Allison Aubrey, why are these companies making these moves now? How dangerous is the problem they’re trying to fix?
ALLISON AUBREY, NPR: I think, in a word, the reason why these companies are making these changes now is that they’re talking to their customers, and consumer sentiment has really changed. People want things that are natural. People have — seem to have developed an allergy to something that seems artificial.
So, Panera, for instance, today, I talked to its lead chef. And what he told me is that, starting a couple of years ago, they started looking into all of the additives in their food. They came up with hundreds of things in the food supply. And they started asking two questions: What is this stuff and why is it there? When they found things that they didn’t know why it was there, or there was a cosmetic reason for it being, they decided, hey, let’s look for a work-around.
And probably the best example of this is mozzarella. People had become accustomed to very, very white mozzarella. It’s often treated with titanium dioxide to make it — sort of bleach it. And so Panera looked at that and said, well, you know, if our mozzarella isn’t the whitest shade of white, then let’s take it out. So they did.
SUMMARY: The U.S. economy’s summer surge was even stronger than first estimated, expanding at an annual rate of 5 percent from July to September -- the best performance since the summer of 2003. Judy Woodruff talks to Nariman Behravesh, chief economist at IHS, about the impressive recent growth and whether it will last.
JUDY WOODRUFF (NewsHour): Let’s take a closer look now at what was behind today’s strong numbers on the economy and impressive recent growth.
For that, we turn to Nariman Behravesh. He is the chief economist at IHS. It’s an economic forecasting and research firm.
Nariman Behravesh, thank you very much.
So what’s behind this? What’s driving this?
NARIMAN BEHRAVESH, IHS Global Insight: Well, the good news is, it’s fairly broad-based.
The revision that we saw today was mostly due to two factors, consumer spending, which was revised up in large part because of re-estimates of higher spending on health care. But that wasn’t the only thing. Capital spending was also revised up quite considerably. So it’s a fairly broad-based upward revision in GDP.
The good news is, as you said at the outset of the program, that there’s a lot of momentum in the U.S. economy and that is going to keep us going for a while.
JUDY WOODRUFF: Well, it seems like just yesterday we were being told that — that the economy wasn’t picking up.
So does this represent a sudden turnaround or were the fundamentals there all along?
NARIMAN BEHRAVESH: No, the fundamentals were definitely there all along. Let’s just look at the consumer for the moment.
If you look at things like employment growth, very strong, the strongest in over 10 years, and this is consistently throughout 2014. Consumer finances in great shape. Consumers’ debt levels relative to take-home pay are the lowest since 2002.
That drop, big drop in gasoline prices, it’s like an $80 billion to $100 billion tax cut for consumers. That’s money right into their pockets. And so all of these are good news and they’re more sort of fundamental changes. These are not flukes.
These are sustainable changes that will keep consumer spending growth going for some time.
RAY SUAREZ (Newshour): It's still one of the largest tech events of the year, even as many people buy their electronic toys from the Apples and Googles of the world.
More than 150,000 people made the trek to Las Vegas this week to peek at some cutting-edge electronics. Some of the buzz this year focused on huge new TVs what is now called Ultra Heard, as well as bendable smartphones, even driverless cars.
Cecilia Kang has been covering it for The Washington Post. I caught up with her before the convention wrapped.
Cecilia, welcome back to the program.
At the risk of oversimplification, some years at the Consumer Electronics Show are filled with stars of the show, big technological breakthroughs. And some just feature a lot of improvements to things people are already familiar with. What kind of year was this?
CECILIA KANG, The Washington Post: This was definitely a mix of both.
There were some familiar technologies that were iteratively improved, lots of interesting sort of high -- higher-quality releases of TVs and smartphones and tablets.
But there were also really interesting technologies showcased that really kind of blow -- blew my mind and can blow your mind as a business and as a consumer thinking about how a driverless car, for example, or a 3-D printer can really change your life.
JUDY WOODRUFF (Newshour): Next, labor unrest in Cambodia's clothing factories. Workers are calling for fewer hours, better conditions and higher wages. That raises a question: Are Western consumers ready to pay more for apparel?
Special correspondent Fred de Sam Lazaro reports.
FRED DE SAM LAZARO (Newshour): Back in the 1990s, Cambodia, impoverished and rebuilding after its genocidal Khmer Rouge years, took steps to give its new garment industry a competitive leg up. It agreed to a system of labor standards, with minimum wages and a limit on working hours, union representation and freedom of expression.
All would be open to international inspection. Today, there are perhaps 400,000 garment workers in more than 300 factories in and near the capital, Phnom Penh, subcontractors to retailers and brands across Europe and North America.
Beginning from scratch less than two decades ago, Cambodia's garment industry has grown into the largest export earner for this country. Three out of four dollars that come into Cambodia come from the garment factories.
The key question is how much all this has benefited workers, almost all of whom are female, or, if you listen to the unions, whether it has benefited them at all.
Many factories have been plagued by labor unrest. Occasionally, it has been violent. There have been frequent reports of workers fainting on the factory floors.
Union leader Chey Mony blames unhealthy conditions and workers weak from malnourishment.
PAUL SOLMAN (Newshour): Weeks after his embattled recess appointment to head the Consumer Financial Protection Bureau, Richard Cordray appeared before a congressional oversight subcommittee.
President Obama tapped Cordray, the former Ohio attorney general, last summer. But the nomination was stalled by the Senate. Republicans insisted the CFPB is too powerful and lacks oversight.
Republican Patrick McHenry of North Carolina, who chaired today's hearing, repeated that charge.
REP. PATRICK MCHENRY, R-N.C.: The fact of the matter is, the operations and authority of the CFPB still remain a mystery to Congress and the American public.
PAUL SOLMAN: During questioning, McHenry pressed Cordray to lay out the CFPB's agenda for the coming year.
REP. PATRICK MCHENRY: With these roughly 800 employees you have and a budget that's hundreds of millions of dollars, will you lay that out?
RICHARD CORDRAY, director, Consumer Financial Protection Bureau: I think our agenda has been pretty clear to everybody who has interacted with us, from the Chamber to consumer groups. I'm happy to have my staff work with you, and if that seems to be a best practice, that that's something that we could do.
We're not intending to hide the ball. I think our priorities are quite clear. We have stated them very clearly.
PRESIDENT BARACK OBAMA: Today, I'm appointing Richard as America's consumer watchdog.
(CHEERING AND APPLAUSE)
PAUL SOLMAN (Newshour): Richard is Richard Cordray, perhaps the most controversial recess appointment in recent memory. After a long procedural battle with the Senate, the president made Cordray head of the Consumer Financial Protection Bureau on Jan. 4.
BARACK OBAMA: When Congress refuses to act, and as a result hurts our economy and puts our people at risk, then I have an obligation as president to do what I can without them.
PAUL SOLMAN: GOP lawmakers cried foul, claiming that the Senate was open for business and wasn't on recess, even if no business took place.
JEFFREY BROWN (Newshour): Even as the presidential campaign heats up, President Obama and congressional Republicans are at odds once again. This time, it's part of a long-running battle over the president's nominees who've been blocked from confirmation.
President Obama chose the Cleveland suburb of Shaker Heights, Ohio, to name the state's former attorney general, Richard Cordray, as director of the new Consumer Financial Protection Bureau.
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JEFFREY BROWN: But the move set off what could be a constitutional showdown between the executive and legislative branches. White House aides said the president acted under his authority to make recess appointments when Congress is not in session.
Republicans said the Senate remains in so-called pro forma sessions over the holidays, open for business even if no business is scheduled to take place. In a statement, Senate Minority Leader Mitch McConnell said, "President Obama, in an unprecedented move, has arrogantly circumvented the American people."
The president had nominated Cordray in July to run the new agency created under the Dodd-Frank financial reform law. Consumer advocates initially hoped that Elizabeth Warren, the bureau's chief architect, would oversee it, but the Harvard professor and the agency itself ran into strong opposition from Republicans.
Alabama Sen. Richard Shelby.
SEN. RICHARD SHELBY, R-Ala.: This massive new bureaucracy was designed by the drafters of Dodd-Frank to be virtually unaccountable to the American people. Before we spend hundreds of millions of dollars on a new federal government agency, I believe we should ensure that it can be held accountable for its actions.
JEFFREY BROWN: Last month, Senate Republicans blocked action on Richard Cordray's nomination.
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BINYAMIN APPELBAUM, The New York Times: That's right. This is a centerpiece -- this agency was a centerpiece of the Democratic vision for how financial regulation should be overhauled in the wake of the 2008 financial crisis.
The idea is that the responsibility for protecting consumers, for enforcing all the various regulations that are intended to protect borrowers and other users of financial products should come under a single agency, which would have the authority to enforce those rules, to evaluate whether new rules were needed, to look for places where consumers were being abused by deceptive practices, by overcharging, by hidden fees, and to take action.
JEFFREY BROWN: And it's been up and running, but leaderless.
BINYAMIN APPELBAUM: That's right.
JEFFREY BROWN: So what does that mean?
BINYAMIN APPELBAUM: Well, the way the law was written is that so long as the agency doesn't have a permanent director, its power are very circumscribed.
It can enforce existing regulations on the largest banks, but it cannot enforce anything over non-bank financial companies -- that's payday lenders, student lenders, debt collectors. A whole range of companies that interact with consumers, have never fallen under federal regulation before, will now for the first time. But until a permanent director was appointed, those powers didn't come into effect.
JEFFREY BROWN: All right, so, David Hawkings, Republicans, knowing this, have blocked the appointment of a director.
And it's now it's devolved into a fight over recess appointment.
DAVID HAWKINGS, CQ Roll Call: Right.
JEFFREY BROWN: What is...
DAVID HAWKINGS: This is something you would never even study in A.P. civics, but it's important now.
And there's been an argument about this for at least 100 years as to when is the Senate in recess in such a way as the president can come in there and bypass the advice-and-consent requirements of the Constitution for most big deal appointees?
Teddy Roosevelt 100 years ago used a tiny couple-of-second break between the end of one Congress and the beginning of another to put 100 people on the job that the Senate had refused to confirm. Harry Truman did something similar. In the modern day for -- there's been a different sort of fight since the 1990s, when Bill Clinton and the Republicans who had power to block his appointees in the Senate went to war over this.
And, most recently, since about 1997, when George Bush put about 60 of his people on the job with recess appointments, Harry Reid said, from now on, we're not going to go into what is traditionally thought of as a real recess, one lasting three days or longer.
We will come back every three days, we will turn on the lights in the Senate, we will say the Pledge of Allegiance, and then we will go home.
JEFFREY BROWN: This is what they call the pro forma session.
DAVID HAWKINGS: And that is the pro forma session. And if you do it every third business day, in Harry Reid's view, and in something that Mitch McConnell and other all agreed to, this essentially was enough of Senate activity to forswear these recess appointments.
JEFFREY BROWN: So, Democrats did this before and had these pro forma sessions.
DAVID HAWKINGS: Yes, they did.
RAY SUAREZ (Newshour): Most people who own a cellphone purchase a plan with limits on how long they can talk on the phone, how much they can text or use the Web. But customers often go beyond those limits and end up with a higher-than-expected monthly bill.
Today, the wireless industry, under pressure from the Federal Communications Commission, announced new voluntary guidelines requiring companies to send customers alerts before they exceed their limits. The FCC proposed such rules last year, then held off on implementing them under the new agreement.
Julius Genachowski is the chair of the FCC, and he joins me now.
President Obama, flanked on stage by executives from the country's leading automakers, announced new fuel economy standards for cars and light trucks Friday that would double the current requirement to 54.5 miles per gallon (mpg) by 2025. The new rules were largely praised by both industry and environmental groups.
"A broad range of interests -- from automakers to unions to conservationists -- [have] come together behind these new rules," said Larry Schweiger, president of the National Wildlife Federation.
"We are pleased to have worked together with all the stakeholders to be a part of a solution that benefits the environment while protecting jobs and providing customers with a full range of affordable vehicle choices," Ford Motor Company said in a statement.
But what will this mean for consumers?
The new rules build off legislation passed in 2009, using Environmental Protection Agency transmission tests, and are slated to begin implementation in 2017. They call for a 5 percent average annual increase in fuel efficiency for cars and 3.5 percent for light trucks until 2021. After that, both cars and trucks will be required to add a 5 percent annual increase.
In essence, if you buy a new car down the line, it will be more efficient than the one you're driving today (the current average for new cars and trucks is roughly 28 mpg), and efficiency will only continue to increase over time.
"If you trade in a 2005 F150 truck for a 2011 F150 that person sees a 20 percent improvement in fuel economy. It's like the cost of gas was cut by 20 percent or about $0.75 on a gallon of gas," said Zoe Lipman, senior manager for transportation solutions at the National Wildlife Federation. "That person who bought the 2011 F150 will be facing a similar opportunity in 2021 or 2018 whenever they trade that car in again. These improvements are incremental."
However, due to technicalities, the cars we all drive down the road won't actually get 54 mpg.
"People when they drive a car in 2025, the average car will have a sticker that says 54 mpg, but really what it will get is more like 38 or so," said Dan Becker, director of the Safe Climate Campaign. He cites a few reasons for the lower efficiency -- one is that he claims the EPA transmission tests are flawed in that they are conducted under controlled conditions, and do not factor in things like weather, road surfaces or city driving (which lowers miles per gallon). There are also what Becker describes as loopholes in the new rules, meaning that automakers get credits that count for miles per gallon for things like hybrid technology, improvements in air conditioning systems or solar panel roofs, but which might not save on gas.
The 54.5 mpg is the fleet-wide average for all cars and light trucks in all conditions. With the credits, it will be roughly 50 mpg for cars and 40 to 45 mpg for light trucks and SUVs in 2025.
The new technologies that will allow for getter efficiency will likely nudge the upfront cost of cars and trucks up, but Lipman argues consumers will still save more both in the short and long term.
"The way people buy cars, the majority of Americans either finance or lease the vehicle. Then even if they are paying a tiny bit more in monthly payments, they will be saving more in their gas bills," she said.
"Folks buying cars like these in the next several years will end up saving more than $3,000 over time because they can go further on a gallon of gas," President Obama said at the event Friday.
The hope is that the money saved on fuel will indirectly improve the overall economy as well, giving consumers money save or spend on other needs.
