Biden’s Open War On Hidden Fees

from The New York Times I'm Michael. babbaro this is the. [Music]. daily today President Biden has declared. war on hidden fees that cost American. consumers tens of billions of dollars a. year but as my colleague Jim tankersly. explains it's doubling as a war against. something else that Biden is finding.

much harder to. [Music]. [Applause]. defeat it's Wednesday May. [Music]. 22nd Jim over the past few weeks the. Biden Administration has decided to take. on on Airline fees about as dreaded an.

enemy as you can imagine and I want you. to just describe what the president has. done well Michael I don't know if you do. a lot of flying but when you do fly on. an airline it turns out there are a lot. of additional charges Beyond just the. price of the ticket now this depends on. on which airline you fly but a lot of. airlines now they ask you to select a. seat and they might charge you for your. your selection or for any selection.

right do they ever they charge you to. have the person you travel with sit next. to you and the baby you're traveling. with sit next to that person right. exactly if you want to check a bag on. some Airlines that's a fee if you want. to carry on on some other airlines or. with certain tickets that's a fee and so. what we have are several airlines that. have adopted sort of a business model. where you charge low ticket prices up. front but then you add fees throughout. the process and by the end your your. ticket could double right and just to.

name a couple names why not Spirit. Frontier that's how they operate sure. and then even the bigger guys like. American and United have started. charging some more of these fees too so. fees are sort of on the rise across the. airline industry okay Enter Joe Biden. right so the Biden administration led by. the transportation department swoops in. finalizes some rules that say first off. you can't hide these fees until the end. of the transaction you got to disclose. them right away up front what the whole.

thing is going to cost and second off. there's some fees you can't charge at. all particularly you can't charge. parents to sit next to their kids so the. way the administration envisions it when. you go to your favorite travel site now. you would see like an itemized list of. all the fees like here's what it could. actually cost and what it could actually. add up to and you'll see it right away. when you're comparing what it costs. between certain airlines so you have a. better sense of what would the final. price be at the end compared to the. final price I'm seeing now okay it's.

difficult Jim for me to imagine anyone. not welcoming this kind of a rule I mean. it's the equivalent of free ice cream on. Friday in the office everybody is going. to like this rule right I mean and that. would seem to be the point yeah that's a. big reason why Biden and his. administration are doing this they are. leaning into helping consumers with. something that really annoys them and. that's part of a bigger push Biden has. made a real conser effort across the.

last few years to Target what his. administration calls junk fees which are. just particular fees and hidden costs. that dog you in all sorts of parts of. your life as a consumer and that just. annoy people this is just a pattern of. Biden saying I'm going to tell Corporate. America you can't hide these fees or in. some cases you can't charge the fees. that you've been charging but for Biden. in the last few months this push on junk.

fees has taken on a much larger. importance than just pleasing the crowds. what do you mean it has become one of. his go-to ways of trying to show. Americans that he's working to solve. what everybody says is their biggest. economic problem right now which is high. prices in other words inflation but of. course fees for an airline ticket and. scene aren't exactly inflation no this. is not tackling the big drivers of.

inflation the prices that people are. upset about which have risen very fast. under Joe Biden compared to previous. presidents are things like groceries and. housing and restaurant meals and cars. yeah cars trucks the things you buy in a. lot basic necessities of day-to-day life. ticket fees and Airline fees are a very. very small part of that but but this is. is an area he can affect and so much.

else on inflation is not really under. Biden's Direct Control at least not in. the short term and so tackling junk fees. for the president has become a way to. show Americans hey I'm trying on an. issue that he really can't do much about. right now but that is really dragging on. his presidency got it you're saying that. Joe Biden's Crusade against fees is kind. of a inflation.

proxy battle if he can tackle fees and. make people feel like he's in their. Corner when it comes to these hidden. costs in their life that are so annoying. and painful then he's going to create a. halo effect in which inflation this. broader problem that he has less ability. to conquer will feel perhaps less. painful that's exactly right I mean. there is a larger strategy by the Biden. Administration to address what they call. Corp corate greed when it comes to.

prices but junk fees are the president's. most concrete and kind of go-to way of. connecting with voters on the issue it's. like Biden and his Brain Trust built. this nice little policy canoe early in. his administration you know something. that's like fun and get you around a. small Waterway but now they they're. taking it to seea because people need to. see that he's out there on the water. trying to get things done in the much. bigger problem of inflation right why. don't you walk us through through what.

this Crusade has looked like from the. start if the Airline fees are feeling. like an end point and perhaps the. Marquee project of this effort where. does it start and what kind of ground. has it covered so Biden's push on junk. fees starts in the summer of 2021 and he. issues this huge executive order. sprawling about competition all the ways. he wants to bring competition back to. the US economy and embedded in there is.

the first route of a real action on junk. fees like Airline fees and driving that. is this really deeply held Theory among. a lot of the president's economic. advisers that Corporate America has. gotten too much power when it comes to. how it interacts with consumers so this. starts as an effort to improve the. economy in ways that Biden's advisers. really think will be very helpful at the. the individual level and Beyond now at.

the same time two things happen one. inflation starts to really blow up that. summer and two polling starts to show. that people really like the idea of. going after Corporate America on hidden. fees M and so by. 2022 in the midterm elections when the. president is being hammered by. Republicans on inflation he turns around. and starts talking on the campaign pain. Trail about going after Corporate.

America for Junk fees that this is the. first signs of him sort of saying okay. prices are high I'm fighting back I'm. fighting big Corporate America so. politics is clearly and firmly at play. here yes exactly okay and what kind of. action does this start to translate into. well it's Washington so these things. take time but branches of the federal. government start to propose and then. finalize rules going after a whole host.

of hidden fees across various. Industries so for example the Consumer. Financial Protection Bureau takes aim at. overdraft fees for people who have Bank. deposits you know if you bounce a check. or try to make a payment and it's beyond. what you have in your bank account the. bank can charge you a fee typically. right now for large Banks it's about $35. every time someone one overdraws their.

account so the bureau proposes a rule. that basically caps the amount that. Banks can charge for an overdraft fee. and the administration sees this as a. way to help low-income people with bank. accounts not get trapped in that cycle. of overdrafts got it okay so that's Bank. fees what else well then there's also. credit card late fees right now that. first fee for the first time you miss a. payment can be more than. $30 and the Consumer Financial.

Protection Bureau said that's too much. and it issued a rule that capped those. firsttime fees at. $8 and then of course there are concert. ticket fees which people might hate just. as much as they hate Airline fees right. we we've all been there you go to see a. show and book tickets or to see a. baseball game and you go to check out in. your cart and there are several fees. just tacked on the end that you don't. even know what they are and the. Administration knows this makes people.

mad Biden says he's going to go after it. and he ends up brokering a summit with. Ticket Master and Live Nation at the. White House where they announced that. they're going to disclose those fees. upfront right away at the. [Music]. start so in this case the government. didn't need to issue any kind of new. rule it just needed to invoke the power. of public shaming well there's just real. pressure coming from Biden and from his.

administration on this and so there's a. voluntary action by some big players. here in the industry to go along with it. got it so when you put all this together. from going after overdraft fees credit. card late fees ticket fees and of course. the Airline fees this starts to add up. to something pretty meaningful sounding. yeah it starts to add up to what you. could call like a platform right this is. this is a series of things that Biden. can Now package together and say look I.

am fighting for you the consumer against. big evil corporations that want to hide. fees and rip you off and as Biden starts. pointing toward his re-election bid and. entering this year looking ahead to. November a big economic speed bump. happens for him inflation had been. coming down but at the start of this. year it kind of goes sideways it's not. coming down in the way that it had been. or that the white house wants it to be.

and so Biden needs a new narrative he. needs a new way to sort of commiserate. with Americans about the damage of high. prices while also showing he's doing. something to help right and as you've. said he has his Crackdown on fees he's. got this canoe it's just sitting there. in the water and so they decide to trick. it out and take it back out. again good. evening if I were smart I'd go home now. you could see the importance of junk.

fees to Biden's overall message about. fighting corporations and trying to. bring down inflation in this year State. of the Union Address look I'm also. getting rid of junk fees those hidden. fees when he gives the issue six. paragraphs of space several Applause. lines my Administration announced we're. cutting credit card late fees from $32. to. $8 talks about going after credit card. companies talks about going after late.

fees I'm not stopping there and promises. that he's going to do more my. Administration proposed rules to make. cable travel utilities online ticket. sellers tell you the total price up. front he's going to go after utilities. and he's going to go after Cable's fees. and you know the battle to fight big. Corporate America on the issue of fees. that annoy voters is just. begun it matters. it.

matters right Joe Biden fee. Slayer. exactly but then something happens that. is on its face a little bit of a policy. setback for Biden but politically looks. like a. gift which is these big corporations. he's targeting in the junk Fe fight they. decide to fight back. [Music].

we'll be right. [Music]. back so Jim how are these industries. trying to fight back against Biden's. Crusade against fees and how is it. benefiting Biden well the fighting back. part is easy they are suing Biden and. his administration in federal court they. are trying to get judges to stop the.

implementation of these regulations so. take for example the credit card. companies the banks they are suing. saying hey this is politics this is not. what the law allows and the federal. government just does not have the. authority to intervene and set these low. limits on how much we can charge in a. private transaction for people with a. credit card so it's a very traditional. business argument against government. regulation and just recently a judge in.

Texas agreed with them and paused the. regulation while the law supersedes mhm. and the airlines are making a similar. argument they're suing Biden as well. they're trying to stop this fee. disclosure Rule and they're saying again. this is Way Beyond the authority of the. transportation department it cannot. intervene in our private Marketplace. like this it doesn't have the authority. they're also saying that this regulation.

will confuse consumers by giving them. too much information if you see all of. these fees listed in the beginning could. be confusing you might not really know. what's going on that's their argument. okay just to be clear they're arguing. that more information on fees and more. transparent information on fees might. confuse Airline consumers more than when. those fees were hidden yeah they're. saying look we tell you what those fees. are before you buy the ticket you know.

you get asked to pay for the seat as. part of the ticket selection process and. so they're saying it'd be confusing to. people to give them all that information. right up front as opposed to throughout. the process intriguing and by the way. you can see in these complaints some of. the reasons why Biden's AIDS think this. is a good political fight for them to. have right you know when you have big. companies saying we think it will. confuse our consumers to give them more.

information up front that's the sort of. thing that the president's team says aha. we have a good villain here we have. people who seem like they are trying to. hide something from consumers and we can. be on the side of defending them right. the villains in this story are acting a. little bit villainous which makes the. argument for Biden that is the way the. Biden people see it right the Biden. people see this as with these lawsuits. and with their arguments that the big. corporations are showing themselves to.

Consumers to be exactly the sort of. people consumers want the president to. stand up to and so that is sort of the. political situation where the president. sees Advantage right now I'm curious. though if these industries credit card. industry airline industry have a strong. legal case here I know that you're not a. lawyer but are they in any way right. that the Administration has. overstepped the law or tested the of the. law by going after these fees well I.

would defer to my court reporter. colleagues on the exact merits of the. lawsuit but I will say that yes the. Biden Administration is pushing what we. previously had seen as the boundaries of. where the federal government would. intervene on these measures I mean. there's a reason why Biden is able to do. a quote junk fee Crackdown and it's. because there hasn't been a big. Crackdown before so that's always going. to be an area where you're going to get.

a lot of litigation and it's certainly. an area when I talk to business groups. where they are really frustrated they. feel like the president has gone well. beyond the law and established norms and. they see this as really overreaching. regulation that costs companies a lot of. money both to defend in court and to. comply with so I don't think it's any. surprise whatsoever that we have a legal. fight here given the sort of freshness. of this fight picked by this president. got it okay so pretty clearly Biden is. is not out on a political lmb but he may.

be out on a legal one the strategy may. not work and I want to turn to what the. risks of this strategy may be for Biden. it would seem that the biggest risk is. that it doesn't work and therefore Biden. has made a lot of promises in very. prominent places like State of the Union. speeches that he can't keep courts end. up blocking these plans and since this. is as you said from the beginning of our. conversation a kind of proxy battle for. inflation Biden doesn't end up making.

much progress in changing how voters. feel about their economic situation and. that would be a real problem for him yes. it would now I actually don't think it's. a huge risk to Biden if courts block. these moves politically speaking. obviously it will be frustrating for his. policy team but the bigger risk for. Biden here to go back to our canoe. analogy is that he's going to load up. the canoe voters are going to like the. canoe and then it's going to get out in. the sea and they're going to realize. wait this is this is is not the craft. that you take to cross the ocean right.

the risk here flows from the fact that. cracking down on junk fees is not an. actual strategy to bring down the. inflation rate it will help on the. margins maybe of some things that. Americans pay some cost that Americans. pay but it's not going to bring your. rent down it's not going to make. groceries cheaper in the store it's not. going to soothe several years of. frustration over high prices and to be. fair the Federal Reserve is the the one. who really is in charge of bringing.

inflation down not Joe Biden but the. risk is that he's taking some ownership. of the issue and saying this is my. strategy and voters go wait that's it. that's that's the whole strategy we're. crossing the ocean in this canoe right. right the risk you're saying is that. this strategy is exposed for what it. kind of is which is a side squabble. rather than the real battle against. inflation yes and the president is. really struggling to convince Americans. that he feels their pain on the polls. show Americans are very upset about high.

prices and they blame Biden for it so. this may be the best thing he's got to. try to go out and sell the idea that hey. I'm doing something that you like. standing up to companies that you don't. like in order to fight the high prices. that you are really upset about even. though you and I both know that that's. not enough on its own to solve your rent. solve your groceries solve everything.

else right as Donald runell might say. you go with the Cano that you've got. [Music]. exactly well Jim thank you very much we. appreciate it thank you very much. [Music]. we'll be right. [Music].

back here's what else you need to. another day in the hush money trial of. Donald Trump the defense rested its case. on Tuesday without calling the former. president to the stand the possibility. of trump testifying was always an open. question but in the end his lawyers. decided that it was not worth the risk. closing arguments in the case the first.

criminal trial of a president will begin. on Tuesday after that the jury will. begin their. deliberations today's episode was. produced by Shannon Lynn Eric krupy. Carlos prto and Ricky nety it was edited. by Lexi di contains original music by. Maran Lozano and Alicia baup and was. engineered by Chris Wood our theme music. is by Jim brunberg and Ben lansberg of.

[Music]. Wonderland that's it for the daily I'm. Michael B see you tomorrow. [Music].