Transcript: Nightly Business Report – January 18, 2017

NBR-ThumANNOUNCER: This is NIGHTLY BUSINESS REPORT with Tyler Mathisen and Sue


WILBUR ROSS, TREASURY SECRETARY NOMINEE: It is a little weird that we have
very low tariffs and that China has very high tariffs.

REP. TOM PRICE (R-GA), HEALTH SECRETARY NOMINEE: You have my commitment to
work with you and others to make certain that the drug pricing is
reasonable and that individuals across this land have access to the
medications they need.


are just days away from an historic power shift. And those who will
implement the coming change were on Capitol Hill making their positions

government sues the servicers of student loans after years of complaints.

HERERA: Last vacant post. There`s no nominee for agriculture secretary.
Is that sewing the seeds of discontent among the nation`s farmers?

All that and more tonight on NIGHTLY BUSINESS REPORT for Wednesday, January

MATHISEN: Good evening, everyone, and welcome.

Two issues that touch us all. Health care, because we all get sick at one
time or another, and trade, because it shapes the economy, the job market
and our financial lives. And today, the two men nominated to lead the
departments that could potentially usher in massive change to those
industries were on Capitol Hill, answering questions, and at times engaging
in heated exchanges.

Billionaire Wilbur Ross, now Donald Trump`s choice to lead the Commerce
Department, testified that job one would be to renegotiate NAFTA, the trade
agreement often cited on the campaign trail as damaging the middle class.
But it was a fiery four-hour hearing with Tom Price, the controversial pick
to lead to Department of Health and Human Services, that led to a lot of
back and forth, on everything from Medicare, to drug prices, to Mr. Prices`
personal trade in health care companies.

Bertha Coombs starts us off.


nominee Tom Price`s appearance before the Senate Health Committee was
courtesy, because the Finance Committee will actually vote on his
nomination. The Democrats came out swinging, hammering the Georgia
congressman on health issues where he disagreed with President-elect Donald
Trump — like Medicare.

SEN. BERNIE SANDERS (I), VERMONT: Will you work with us so that Medicare
negotiates prices with the pharmaceutical industry?

PRICE: I — you have my commitment to work with you and others to make
certain that the drug pricing is reasonable and that individuals across
this land have access to the medications that they need.

SANDERS: That wasn`t right the answer to the question that I asked.

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: Can you guarantee to this
committee that you will safeguard President-elect Trump`s promise and while
you are HHS secretary, you will not use your administrative authority to
carry out a single dollar of cuts to Medicare or Medicaid eligibility or
been fits.

PRICE: What the question presumes is that money is the metric. In my
belief —

WARREN: I am asking that —

PRICE: — from a scientific standpoint —

WARREN: I`m sorry to interrupt. We`re very limited on time. The metric
is money.

COOMBS: The most contentious questions were around Price`s trades in
health care companies.

SEN. PATTY MURRAY (D), WASHINGTON: Do you believe it is appropriate for a
senior member of Congress actively involved in policy making in the health
sector to repeatedly personally invest in a drug company that could benefit
from those actions? Yes or no?

PRICE: Well, that`s not what happened.

COOMBS: Price said he deferred decisions to his broker on investments.

SEN. CHRIS MURPHY (D), CONNECTICUT: Do you direct your broker around
ethical guidelines? Do you tell him for instance not to invest in
companies that are directly connected to your advocacy? It seems like a
great deal as a broker. He can just sit back, take a look at the positions
that you`re taking —

PRICE: She can sit back.

MURPHY: She can sit back in this case. Look at the legislative positions
you`re taking and invest in companies that she thinks are going to increase
in value based on your legislative activities and you can claim separation
from that because you didn`t have a conversation.

PRICE: Well, that`s a nefarious arrangement that I`m really astounded by.

COOMBS: Elizabeth Warren wouldn`t let it go.

WARREN: So, let`s just be clear this is not just a stockbroker. Someone
you identify handle the paperwork. This is someone who buys stock at your
direction. This is someone who buys and sells that stock you want them to
buy and sell.

PRICE: Not true.

WARREN: So, when you found out your broker had made this trade without
your knowledge, did you reprimand her?

PRICE: What I did was comply —

WARREN: That she made it?

PRICE: What I did was comply —

WARREN: Did you sell the stock?

PRICE: What I did was comply with the rules of the House in an ethical and
legal and aboveboard manner and in a transparent way.


COOMBS: Representative Price says he will divest of all his stockholdings
if confirmed as health secretary. He goes before the Senate Finance
Committee next week.



HERERA: And now to the confirmation hearing for commerce secretary where
tensions were not quite as high but the issues just as important. During
his testimony, Mr. Ross pointed the finger at China for unfair trade
practices and said his top priority is to level the playing field.

Eamon Javers reports.


Wilbur Ross faced a largely welcoming Senate Commerce Committee today as
Republicans and Democrats appeared to assume his choice is all but a
foregone conclusion. Ross was quizzed on issues of trade, jobs and climate
change, and he laid out his overall expectations for the U.S. economy.

ROSS: I think we can certainly get north of 3 percent growth, if we do all
the elements of the president`s program.

JAVERS: He said one of the first priorities for the new administration
would be dealing with what he called unfair trade barriers.

ROSS: It`s a little weird that we have very low tariffs, and that China
has very high tariffs. That seems to me to be a bit of an imbalance. And
it`s one thing to talk about free trade. We would like to have our trading
partners also practice free trade and do it in a more balanced manner.

JAVERS: Ross also gave his sense of the ways to pay for President-elect
Donald Trump`s massive proposed infrastructure initiative.

SEN. CORY BOOKER (D), NEW JERSEY: You support the direct spending by
government on infrastructure.

ROSS: I think there will be some necessity for it.

JAVERS: And Democrats pressed him repeatedly on the sharp contrast between
Ross`s divestiture of billions of personal assets and Trump`s declining to
do the same. Ross ducked the question.

ROSS: The ethics rules that apply to Senate-approved nominees do not apply
to the president.

SEN. RICHARD BLUMENTHAL (D), CONNECTICUT: You were able to do it. Why not
the president?

ROSS: I`m not familiar enough, Senator, with the exactitudes with his
holdings to have any judgment as to how easy or hard it would be.

JAVERS: At the outset, Ross explained that he had to fire a household
employee within the past month when that person was unable to provide proof
of documentation to work in the United States. But he described it as a
rare incident. And the senator seemed satisfied with his explanation.

For NIGHTLY BUSINESS REPORT, I`m Eamon Javers in Washington.


MATHISEN: Scott Pruitt, Donald Trump`s pick to lead the Environmental
Protection Agency, started a contentious confirmation hearing, talking
about climate change. He criticized the agency he`s been nominated to lead
and outlined the role he thinks regulators should play.


SCOTT PRUITT, OKLAHOMA ATTORNEY GENERAL: Regulators are supposed to make
things regular, to fairly and equitably enforce the rules and not pick
winners and losers. A regulator should not be for or against any sector of
our economy. Instead, a regulator ought to follow the law in setting out
the rules so that those who are regulated can plan, allocate resources, to
meet the standards, versus operating in a state of uncertainty and duress.


MATHISEN: Mr. Pruitt would not say whether he would recuse himself from
ongoing lawsuits he filed against the EPA as Oklahoma`s attorney general.

HERERA: On Wall Street, the Dow dropped for a fourth straight day as more
companies reported earnings and investors analyzed comments from the chair
of the Federal Reserve, more on those stories momentarily.

But, first, here`s a look at the closing numbers for you. The Dow Jones
industrial average fell 22 points to 19,804. The NASDAQ rose 16. And the
S&P 500 was up 4.

MATHISEN: The economy is closed to running on its own. The chair of the
Federal Reserve today said the economy has almost met the Fed`s goals and
that the Central Bank can start further reducing the extreme levels of
monetary policy support that prevailed over most of the Obama years.
Speaking to the Commonwealth Club, Janet Yellen said removal of that
support would be slow.


JANET YELLEN, FEDERAL RESERVE CHAIR: As of last month, I and most of my
colleagues, the other members of the Fed board in Washington, and the
presidents of the 12 regional Federal Reserve banks, were expecting to
increase our federal funds rate target a few times a year until by the end
of 2019, it is close to our estimate of its longer run neutral rate of 3


MATHISEN: The Fed last liked its benchmark interest rate in December.

HERERA: Inflation pressure is heating up a bit. That`s according to the
Federal Reserve`s Beige Book, which is an anecdotal look at the economy
across the country. Eight of the 12 districts reported modest price
increases. That`s pretty much in line with the Consumer Price Index report
out today, which showed a 0.3 percent increase in December, bringing growth
over the past 12 months to more than 2 percent, the fastest pace in five

MATHISEN: Output at the nation`s factories, mines and utilities rose in
December, the strongest pace in two years. Industrial production was up
nearly 1 percent last month. The biggest gain since November 2014.
Utility output showed the biggest gains surging more than 6 1/2 percent, as
winter rolled in following an unseasonably warm November.

HERERA: The U.S. economy and the global economy dominated the conversation
at the annual meeting of the world`s richest and most powerful. But this
year, the World Economic Forum is taking place amid a backdrop of worldwide
change. And that hasn`t escaped the attention of business and political


JAMIE DIMON, JPMORGAN CHASE CHAIRMAN & CEO: Look at the economy — we have
15 million more people working. Wages are going up. Home formations are
going up. Companies are flush with cash. Capital markets are wide open.
Sales are going up.

benign in the country. I`d say, you know, fundamentally, we`re kind of
getting better anyway. And so, this is pushing in the direction of the

STEVE SCHWARZMAN, BLACKSTONE GROUP CEO: We`re going to be trying some new
things. I mean, we as a country. Some will work. Some won`t work as

BLANKFEIN: There is a lot that can go wrong. But I think we`re at the
beginning of a change the cycle.

GLENN HUTCHINS, NORTH ISLAND CHAIRMAN: My concern is the markets are
priced in everything that is in the incoming administration wants to do as
if it`s already been done.

LARRY SUMMERS, FORMER TREASURY SECRETARY: Fiscal expansion, coupled with
monetary tightening, couple with increased protectionism, coupled with a
border adjustment tax, is a policy prescription for a stronger dollar.

DIMON: The balance sheet of the average consumers is in pretty good shape.
The balance sheets of companies are in pretty good shape. Credit is very
good. So, in my view, it could actually be strengthening.

SCHWARZMAN: The leaning forward, if you will, to experiment —

HUTCHINS: Regulatory lessening.

SCHWARZMAN: To the bottle neck.

HUTCHINS: Tax reform.

SCHWARZMAN: To change taxes.

HUTCHINS: Infrastructure spending.

SCHWARZMAN: It can be a lot of things, most of which on a theoretical
basis, most people would say are good things.

HUTCHINS: There is a lot of difference of opinion within his
administration about how to do these things.

DIMON: And I`m hoping, by the way, if you get a tax reform and a
regulatory reform, that you will actually have an accelerated economy.

RAY DALIO, BRIDGEWATER ASSOCIATES: Donald Trump is aggressive. Is he
aggressive and wise and thoughtful and calculating? Or is he aggressive
and reckless? And I think we`re going on find out.

BLANKFEIN: I am dying to look back at this and like the outcome of it.
And certainly going to behave in a supportive a fashion as I possibly can
to make sure that I like it.


MATHISEN: Still ahead, sowing the seeds. The challenge farmers face as
they wait for the president-elect to make his pick for agriculture


MATHISEN: The government is suing the largest student loan servicer in the
country. The Consumer Financial Protection Bureau alleges that Navient
illegally cheated borrowers out of certain rights they have in repaying
their student debt. Navient is a former part of Sallie Mae and services
more than $300 billion in federal and private student debt. It`s accused
of providing bad information and incorrectly processing payments over a
period of years.

HERERA: The Labor Department is suing a division of Oracle (NASDAQ:ORCL),
claiming the company paid white male employees more than other workers, and
favored Asians when recruiting and hiring for technical jobs. The
government warned that discrimination suit against Oracle (NASDAQ:ORCL)
America could cause the parent Oracle (NASDAQ:ORCL) millions of dollars in
federal contracts if the Labor Department can prove its case. The lawsuit
was the result of a two-year investigation into the company. Oracle
(NASDAQ:ORCL) disputes the allegations.

MATHISEN: JPMorgan (NYSE:JPM) will reportedly pay $55 million to settle
charges it discriminated against minority homeowners. The government
alleges that between 2006 and `09, JPMorgan (NYSE:JPM) charged African-
American and Hispanic borrowers higher rates than white borrowers. That
violates the Fair Housing Act. The bank denies any wrongdoing.

HERERA: Goldman Sachs (NYSE:GS) saw its profit soar four-fold on the surge
in bond trading. Goldman, along with other Wall Street banks, benefited
from an increase in volume after the presidential election and from a rise
in interest rates. Goldman Sachs (NYSE:GS) topped both profit and revenue
expectations. But shares of the Dow component closed lower on the day.

MATHISEN: Citigroup (NYSE:C) also benefited from the increase in market
volume after the election and according to the company, that trend has
carried into the New Year. But Citi reported a mixed fourth quarter with
profit up 7 percent and revenues just missing expectations. The bank CFO
says the environment remains strong and clients are optimistic about
changes to the tax code and pro-growth policies. The stock was off more
than 1 1/2 percent.

HERERA: And shares of Netflix (NASDAQ:NFLX) spiked following the streaming
company`s latest quarterly results, thanks to a surge in subscribers.
Netflix (NASDAQ:NFLX) earned 15 cents a share, 2 cents better than
estimates. Revenue was also a slight beat, nearly $2.5 billion in the

But as Julia Boorstin tells us, it is all about those subscribers.


Netflix (NASDAQ:NFLX)`s better than expected earnings results is growing
faster than expected, particularly overseas. Netflix (NASDAQ:NFLX) adding
more than 7 million new subscribers last quarter as it grew its overseas
user base by nearly 1.5 million subscribers than the company projected.
Netflix (NASDAQ:NFLX) CEO Reed Hastings attributed that better than
expected growth to its original content, exclusive, including “The Crown”,
the Marvel`s “Luke Cage”, and its “Gilmore Girls” reboot.

But the company`s pace of subscriber growth will slow, it warns, as Netflix
(NASDAQ:NFLX) faces some tough comparisons in the next quarter.

For NIGHTLY BUSINESS REPORT, I`m Julia Boorstin in Los Angeles.


MATHISEN: Target (NYSE:TGT) slashed its profit outlook for the year on
weak holiday sales, and that is where we begin tonight`s “Market Focus”.

Despite seeing strong momentum in its e-commerce business, the retailer
said disappointing foot traffic and heavy discounting led to a decline in
same store sales. Target (NYSE:TGT) also lowered its guidance for the
current quarter and shares fell more than 5 percent. They finished at

The British educational publishing company Pearson said profits would
plunge this year because of ongoing weakness in North American sales. And
the bad news didn`t end there. Pearson said it would cut its dividend and
sell its nearly 50 percent stake in the book publisher Penguin Random
House. Shares off 28 percent to $7.13.

And the drug maker Eli Lilly (NYSE:LLY) will take over Colucid
Pharmaceuticals for nearly $1 billion. Now, the deal will add Colucid
experimental migraine treatment to Lilly`s emerging pain management
pipeline. Colucid shares up 32 percent to $46.25. Eli Lilly (NYSE:LLY) up
a fraction at $77.53.

HERERA: General Motors (NYSE:GM) will pay $1 million to the Securities and
Exchange Commission to settle accounting charges related to a faulty
ignition switch found in some of the automaker`s vehicles. The SEC said
the company`s deficient internal accounting controls prevented it from
properly determining the potential for a recall and estimating possible
loss. Shares rose, though, 16 cents to $37.47.

And American Airlines is the latest carrier to launch a basic economy fair
that offers flyers a cheaper ticket price for less perks. With the new
option, customers cannot reserve seats or upgrade and can only bring a
personal item fits under the seat. The service is expected to launch next
month on select routes. Shares were up almost 2 percent to $47.64.

Canadian Pacific Railway (NYSE:CP) said its profit rose in its latest
quarter, while revenue slipped. The railroad operator also said its CEO
would step down immediately, that`s earlier than the previously announced
departure date, and that the company`s current president would take on that
position. Shares fell slightly in after hours trading and also ended the
regular session down a fraction to $145.22.

MATHISEN: The president-elect still has not picked someone to lead the
Department of Agriculture. It`s the last cabinet position to be filled.
And as the nation`s farmers know, that nominee will have to address a
number of challenges.

Aditi Roy reports from San Francisco.


Seabass Vineyards in Mendocino County, California.

As a farmer of specialty crops, he says finding workers to harvest his
grapes is becoming harder.

SCOTT WILLOUGHBY, SEABASS FAMILY WINES: There`s fewer people coming in.
More people leaving to go back home. And the work force in the vineyard is
actually aging. It`s a problem that is not seeming to diminish, and all of
us were struggling.

ROY: He worries that the incoming Trump administration would hold true to
the president-elect`s campaign talk about building a wall to keep
undocumented workers out of the country. Experts say undocumented
immigrants make up more than half of the workers on the country`s farms.

WILLOUGHBY: Other vineyard owners and wineries have tried to hire non-
immigrant workforce, which I think is sort of maybe implied in the
political belief that perhaps immigrants are taking jobs from Americans.
And, unfortunately, there`s been no success with that.

ROY: Pete Aiello is more hopeful about the incoming administration.

PETE AIELLO, UESUGI FARMS OWNER: I`m excited because it`s going to be a

ROY: As the owner of the Uesugi Farms, which covers 5,000 acres over three
states, he hopes Trump will pull back on government regulations.

AIELLO: I`m just excited that we`re not going to go through the same stuff
that we just went through for the last eight years. The climate here for
businesses and farms, especially businesses that are farms, is very

ROY: Along with immigration, environmental regulations like the waters of
U.S. rule which protects waterways and wet ways and is currently under
review in the courts, are two issues affecting farmers as the Trump
administration prepares to take office. Farmers are important to Trump,
since rural voters helped elect him to office.

Another hot button topic is trade. Experts say NAFTA has benefited farmers
by opening up export markets. Agricultural groups are also in favor of the
Trans Pacific Partnership which Trump has opposed.

on agricultural trade. And so, we`d very much hope that this
administration will do what it can to avoid trade frictions as it goes
through some of these renegotiation efforts that we`re talking about.

ROY: Officials with the American Farm Bureau, a trade advocacy group whose
members include hundreds of thousands of ranchers and farmers across the
country say Trump and his secretary of agriculture are taking the reins at
a critical economic time for the nation`s farmers.

YOUNG: Farm income is off about 50 percent from where it was just three or
four years back. Expectations are that it will stay town here for a while.
And so, farmers are beginning to feel the financial stress. The farm
economy is certainly not doing as well as the general economy is.

ROY: Ag experts and farmers will also be closely watching the progress of
the 2018 farm bill. Experts say the farm economy will factor prominently
into the congressional discussions over the legislation with low crop
prices and farm income looming. Commodity programs and crop insurance
subsidies just two issues at stake in the bill.

For NIGHTLY BUSINESS, I`m Aditi Roy, San Francisco.


HERERA: Coming up, 12 bedrooms, 21 bathrooms, three kitchens and a fitness
center. We`ll take you on a rare tour inside the most expensive house for
sale in the United States.


HERERA: Home builder sentiment slipped a bit in January. But after
surging to an 11-year high following the election, confidence is still at
elevated levels. The National Association for Home Builders said that
builders are still upbeat that the new Congress and the incoming
administration will create a better business climate for the industry.

MATHISEN: Well, the most expensive home for sale in the United States is
shrouded in secrecy. It has never been photographed. There are no images
of it on the Internet, but tonight, we have an exclusive look inside.

Robert Frank hosts an open house in L.A. like you`ve never seen before.


real estate market is getting increasingly competitive and this house in
Bel Air, California, has set a whole new level for high real estate. We`re
going to give you a tour starting here in the gaming and entertainment

Now, it`s a 12,000 square foot entertainment area. The ultimate
billionaire man cave, you might say, with a four lane bowling alley with,
yes, what else, gold and silver, bowling pins and it`s got a lounge over

And you like eye candy? Well, talk about eye candy — it`s a $250,000
candy wall. And then you`ve got fuss ball tables, a $12,000 pool table.

And, you know, the wealthy have garages and lots of cars. The super rich,
they have auto galleries and collectible cars worth millions. All of these
cars and everything in this house comes with the house for your $250

Now, these cars include a $2 million super car called Pagani. This car
goes over 230 miles an hour. And this also comes with the house, it`s one
of the rarest cars in the world. A $15 million 1936 Mercedes.

Now, we`re in Los Angeles, the world of glitz and glam and the big show.
Well, you talk about the big screen, this house has some of the biggest
screens of any home. It`s got your home theater with 7,000 movies and 40
super comfortable reclining leather seats.

But if that`s not big enough, we have the biggest TV in any home in
America. It`s nearly 30 feet long with the bar, and another big lounge
area. So, you can imagine all your Hollywood celebrity friends like Jack
Nicholson and Brad Pitt, they`re all going to come over for drinks.

Now, this house overall is 38,000 square feet. It`s got four levels. You
can take one of two elevators that are line in the crocodile skin or you
can take stairs. I`m going to take the stairs.

Check this out. The stairs has a really cool feature. It`s a 20-foot wall
designed to look like a safe. Now, if you`re rich enough to buy this
place, you`ve got a lot of stuff you want to keep safe.

This is a second level. It`s kind of another entertainment, more of a
dining bar, drinking area, because this is one of two wine champagne rooms,
2500 bottles. With all that wine, you`ve got to have places to drink it.

This house has six bars and 130 individual pieces of art including this one
of a kind giant replica of a Leica camera. How is that for a close up?

Now, the stairs in this house cost $2 million to build, designed out of a
hand polished stainless steel.

And are you ready for the show stopper? Check this out. The 85-foot
infinity pool overlooking Los Angeles, one of the best views in all of L.A.
with a Jacuzzi and a 20-foot TV that rises up out of the landscape.

And whoever buys this house for $250 million is going to be drinking a lot
of champagne.

For NIGHTLY BUSINESS REPORT, I`m Robert Frank in Bel Air, California.


MATHISEN: I don`t know what to say.

HERERA: You don`t know what to say.

MATHISEN: To read more about this 38,000 square foot mansion, logon to our
website, I don`t know enough people to even fill one room of that

HERERA: No, I don`t either. I like country casual.

MATHISEN: Yes, right.

HERERA: Not me.

That`s NIGHTLY BUSINESS REPORT for tonight. I`m Sue Herera. Thanks for
joining us.

MATHISEN: I`m Tyler Mathisen. Have a great evening, everybody. We`ll see
you tomorrow.

HERERA: Can you even imagine?


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broadcast at The program is transcribed by CQRC
Transcriptions, LLC. Updates may be posted at a later date. The views of
our guests and commentators are their own and do not necessarily represent
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