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From the New York Times, I'm Michael Balbaro. This is the 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 Tankersley explains, its doubling as a war against something else that Biden is finding much harder to defeat. Its Wednesday, May 22. Jim, over the past few weeks, the Biden administration has decided to take 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 which airline you fly, but a lot of airlines now, they ask you to select a seat and they might charge you for 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 upfront, but then you add fees throughout the process and by the end 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, upfront, 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 concerted 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 online, basic necessities of day to day life. Ticket fees and airline fees are a very, very small part of that. But this 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 inflationary 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 corporate 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 gets you around a small waterway, but now they're taking it to sea 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 what this crusade has looked like from the start. If the airline fees are feeling like an endpoint 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 advisors, 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 advisors really think will be very helpful at 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. 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 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 eventually 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 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 first time 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've all been there. You go to see a show and book tickets or to see a baseball game, and you go to checkout 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 procuring a summit with Ticketmaster and Live Nation at the White House, where they announce that they're going to disclose those fees upfront right away at the start.

Hmm. 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 reelection 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 a way that, 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's 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 thirty two dollars to eight dollars.

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's proposed rules to make cable travel, utilities and 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 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 hes targeting in the junk fee fight. They decide to fight back.

Well be right back. This podcast is supported by meta.

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Familytools my name is Carlos Priero and I'm one of the people that helped make the daily. As part of our reporting on immigration, we heard from this woman crossing one of the most dangerous stretches of land on the whole planet to get to the United States. I knew that she was from Venezuela, which is where I'm also from. But what I found out is that not only was she from the same city that I grew up in, but she was also from the same neighborhood. She was describing parks and plazas and streets where I spent a lot of my childhood. She was a woman that I might have encountered at some point in my life. It made me feel an extra responsibility to find a way for our listeners to feel like they understood her and her story. What makes the daily special is that we try to understand every story with that level of closeness so that our listeners can really connect with the humans in the middle of a news event. If this is the kind of journalism that you like and that you care about, the best way to support it is by subscribing to the New York Times.

So, Jim, how are these industries trying to fight back against Biden's crusade against FIS, 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 lawsuit proceeds. 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 hit.

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 aides 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 upfront, 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 bounds 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 not out on a political limb, but he may be out on a legal one. This 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 all 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 trading 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 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 costs 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 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 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 inflation. 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 runs, well, might say, you go with the canoe that you've got.

Exactly.

Well, Jim, thank you very much. We appreciate it.

Thank you very much.

We'll be right back. This podcast is supported by Meta.

How do my daughter and I set boundaries on who can message her online? How do I talk with my son about healthy online behavior? If you've got questions about how to keep your teenagers safer online, family Center on Instagram has resources that can help. Family Center is where you'll find supervision you can set up with your teenager and an education hub with advice from youth experts on how to have conversations about safety. Explore more of our family tools@instagram.com. familytools.

Here'S what else you need to know today in the hush money trial of Donald Trump. The defense rested its case on Tuesday without calling the former president to the standard. 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. Todays episode was produced by Shannon Lynn, Eric Krupke, Carlos Prieto and Ricky Novetsky. It was edited by Lexi Diaw, contains original music by Marian Lozano and Alicia Ba Etube, and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Landsfirk of Wonderland. Thats it for the daily I'm Michael Vivaro. See you tomorrow. This podcast is supported by Meta.

How do my daughter and I set boundaries on who can message her online? How do I talk with my son about healthy online behavior? If you've got questions about how to keep your teenagers safer online, Family center on Instagram has resources that can help. Family Center is where you'll find supervision you can set up with your teenager and an education hub with advice from youth experts on how to have conversations about safety. Explore more of our family tools@instagram.com. familytools.