TYLER MATHISEN, NIGHTLY BUSINESS REPORT ANCHOR: Bipartisan shift? A rare
event in Washington, the president and Democrats — yes, Democrats — reach
a deal to pass aid for Hurricane Harvey victims and avert a debt crisis at
least for now.
SUE HERERA, NIGHTLY BUSINESS REPORT ANCHOR: One-two punch. If Irma hits
while the country is still recovering from Harvey, what could happen to the
MATHISEN: Shifting gears. More people are renting out their cars and big
automakers are taking notice.
Those stories and more tonight on NIGHTLY BUSINESS REPORT for Wednesday
HERERA: Good evening, everyone, and welcome.
An unusual thing happened today in the nation`s capital. President Trump
and Democratic leaders put aside their differences to reach a deal that
solves some of Washington`s biggest issues. In a meeting in the Oval
Office, an agreement was reached that includes a three-month extension of
both government funding and a three-month increase in the debt limit, while
also providing hurricane relief money.
House Speaker Ryan had called the Democratic proposal ridiculous, but then
later in the day, the top Senate Republican, Mitch McConnell, said he
supports the idea.
Kayla Tausche has more on this reach across the aisle.
KAYLA TAUSCHE, NIGHTLY BUSINESS REPORT CORRESPONDENT: President Trump
struck a deal with Democrats to provide hurricane relief, fund the
government and suspend the debt ceiling, but only until December 15th.
The plan was first floated Wednesday morning by Democratic leaders. Hours
later, the president agreed to support it at a White House meeting with top
Republicans were planning a three-month extension on spending, but one in
the debt ceiling raced through 2018.
Senate Minority Leader Chuck Schumer says his deal offers more certainty.
SEN. CHUCK SCHUMER (D-NY), MINORITY LEADER: The fact that we`re renewing
the debt ceiling and we`re going to do it with a date, not an amount, means
there`s ample room to deal.
TAUSCHE: Top Senate Republican Mitch McConnell said he would add the deal
because it has the president`s backing to a bill for hurricane relief
expected to pass this week.
SEN. MITCH MCCONNELL (R-KY), MAJORITY LEADER: His feeling was that we
needed to come together to not create a picture of divisiveness at a time
of genuine national crisis.
TAUSCHE: The deal buys Congress three months to find common ground. But
the issues are familiar turf for many bitter partisan battles in recent
memory. Republicans were seen to have had an upper hand, thanks to a slim
majority in Congress, but many worry privately, the White House`s support
for Democrats will put them on flat footing come December.
For NIGHTLY BUSINESS REPORT, I`m Kayla Tausche, Washington.
MATHISEN: Let`s get some context and perspective on today`s D.C.
developments from Brian Gardner. Brian is managing director at Keefe.
Bruyette and Woods.
Mr. Gardner, welcome. Good to have you with us.
BRIAN GARDNER, KEEFE, BRUYETTE & WOODS MANAGING DIRECTOR: Hi, Tyler.
MATHISEN: You know, Brian, this decision, unexpected to say the least,
basically punts the budget and debt ceiling debate and who knows what else
into December. Why do this short-term patch and what does it mean for
progress on tax reform?
GARDNER: It`s a great question why do it short term. I think doing a
short term debt ceiling extension is just a bad idea, and it`s going to put
Congress in a another awkward position in a couple of months. The timing
of it is a little uncertain it may actually go beyond December in the next
I do think that the — as you alluded to, Tyler, that the reason for doing
this is to try and clear the decks for the rest of the fall so Congress can
turn its attention to tax reform, which is the president`s number one
priority or at least it seems to be his number one priority right now. I`m
not (AUDIO GAP) quite as planned and I think it could it could be
counterproductive and the way they`ve handled it. I think there`s going to
be blowback from Republicans that will hurt his attempts to pass tax
But I think that`s the reason why I did it, was to get tax reform back on
HERERA: Now, if indeed things go along and we`re now at that December
deadline, is it going to be once again one that, you know, the race to the
end of the year, the race to the 11th hour on these issues that will once
again have to be addressed?
GARDNER: Yes, you know, I think there`s a little confusion about how it
may play out. Certainly, the spending bills will come up in the middle of
December, and there`s going to be the threat of a government shutdown.
There`s no doubt about that.
The debt ceiling is a little different. Remember they`re suspending the
debt ceiling into December, but treasury is now is once again will have its
extraordinary measures to manage the ceiling, manage the debt limit and
stay under it as it has for the last couple of months, and those could
actually last into the middle of 2018. So, it might be a little bit longer
term than what we`re counting on.
But certainly when we get into the holiday season, a government shutdown is
going to be looming. I have no doubt about that. You know, I think we
were expecting all along that it would be punted to year end.
GARDNER: And this is playing out kind of how we expected. But I think —
MATHISEN: Talk to us.
GARNDER: — each side is going to start to dig in its heels and certainly
Republicans, conservative Republicans, are going to dig in more.
So they feel — I think most Republicans feel like they didn`t get anything
out of this and they`re going to want to have something to show for
whatever happened today when they get to December.
MATHISEN: Two questions apropos of what you just said. Did the
Republicans get rolled on this? Did the president get rolled? That`s
number one. And number two, I gather that passing a full-year budget
resolution, a budget, is really critical to get tax reform done? Why is
GARDNER: So, I do think that the president capitulated on this. I don`t
think he got anything in return, except for clearing the decks. Again,
that`s a judgment call on the White House.
Now, to yours — the second part of your question, Tyler, on the budget
resolution. For people who kind of don`t get into budget geeky stuff here
in Washington, a budget resolution is an outline. It`s a road map but it –
– and usually, people don`t care, even people in Washington don`t really
care about the budget resolution in most years.
This year, it`s critical because in order to get to the reconciliation
rules and strategy that the Republicans need to pass tax reform, you have
to pass the budget resolution.
MATHISEN: Aha, OK.
GARDNER: The budget resolution must include the reconciliation
instructions. Therefore, if there`s no budget resolution, there`s no
reconciliation. If there`s no reconciliation, there`s no tax reform.
MATHISEN: Got it.
GARDNER: So, these are — these are conditions that build upon themselves
to get to tax reform.
MATHISEN: Thank you for explaining.
GARDNER: And so, getting the budget resolution done in the next couple of
weeks is critical to getting to the tax bill.
MATHISEN: Brian, thank you so much.
GARDNER: Thanks, Tyler.
MATHISEN: Brian Gardner with Keefe, Bruyette and Woods.
HERERA: Nearly $8 billion was approved by the House today for Hurricane
Harvey relief. That includes million for the Small Business
Administration`s disaster loan program, and that`s important because as
Kate Rogers (NYSE:ROG) reports, a natural disaster can be devastating to
KATE ROGERS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Some 40 percent of
small businesses hit by flood disasters like Hurricane Harvey never reopen
according to the Federal Emergency Management Agency. Part of the reason,
they`re not covered. Most small businesses are covered by what`s known as
a business owner policy or BOP, which does not include flood coverage. And
that can be obtained through the National Flood Insurance Program or
through an excess flood insurance policy with a participating carrier,
according to the Insurance Information Institute.
Business owners that are in a disaster area may also be eligible for
financial assistance from the Small Business Administration. The SBA has
physical disaster loans available, as well as economic injury loans for
small businesses, both with caps of $2 million.
Homeowners can also apply for SBA disaster assistance and are eligible for
up to $200,000 while renters, they qualify for about $40,000 in assistance.
After the 2005 Gulf Coast hurricanes, including Katrina, the SBA approved
$10.9 billion in funding for some 160,000 loans.
After Hurricane Sandy, the SBA approved $2.5 billion for some 37,000
recovery loans. And even though the program is managed through the Small
Business Administration, the majority of these loans were actually approved
to homeowners and renters, not small businesses.
While the damage from Harvey is still being assessed, the SBA is
recommending all businesses and homeowners get their claims in as soon as
possible as it can take up to four weeks to get funding approved.
For NIGHTLY BUSINESS REPORT, I`m Kate Rogers (NYSE:ROG).
MATHISEN: Well, Hurricane Irma is one of the largest ever Atlantic
hurricanes. It is roaring through the Caribbean, following a possible
track toward Florida and residents in that state are getting ready.
Jackie DeAngelis is in Fort Lauderdale tonight.
JACKIE DEANGELIS, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): At
this Home Depot (NYSE:HD), lumber is flying off the shelves, generators
scooped up seconds after being put on the floor.
DAMIAN BROWN, HOME DEPOT STORE MANAGER: Generators came in this morning,
36 generators. And in space of 10 minutes, everything was bought.
DEANGELIS: Bridget Hampton (ph) is expecting to spend about dollars to
prepare her home from what could be an historic storm.
BRIDGET HAMPTON (ph), RESIDENT: Plywood, supplies, gas, want to make sure
you have cash on hand, pet food, does everything that you could think of
that might be helpful.
DEANGELIS: The same scene is playing out across Florida, where state of
emergency has already been declared even before a clearer picture of the
storms direction is known.
GOV. RICK SCOTT (R), FLORIDA: I cannot stress this enough, do not ignore
evacuation orders. Remember, we can rebuild your home, but we cannot
rebuild your life.
DEANGELIS: Hurricane Irma, which has already started to batter the
Caribbean, is expected to make its way to Florida this weekend. Residents
we spoke to are heeding the governor`s warning, not taking any chances.
UNIDENTIFIED MALE: I view this as a practice run. So, either it is going
to be a serious storm and it was worth it, or I`ll be ready for the next
DEANGELIS (on camera): Right now, people are preparing without panicking
and stores like this one are trying to keep the shelves stocked. But the
locals are concerned because this could be one of the worst storms in the
For NIGHTLY BUSINESS REPORT, I`m Jackie DeAngelis, Fort Lauderdale,
HERERA: And with Irma coming on the heels of Hurricane Harvey, could this
be a one-two punch for the economy.
Paul Walsh is director of Weather Strategy at IBM Global Business Services
and he joins us now to talk about that.
If indeed Irma takes the path that it is projected now and it does have a
direct hit on Florida, in the wake of Harvey, what kind of economic losses
could we be looking at, Paul?
PAUL WALSH, DIRECTOR OF WEATHER STRATEGY, IBM GLOBAL BUSINESS SERVICES: It
could be basically a repeat of what we just had with Harvey. It`s kind of
a — almost like worst case scenario here with this track, and the latest
track continues to make a beeline straight for south Florida, straight for
Miami, right up the coast and into Georgia-South Carolina.
That path is literally a worst-case scenario, and what — and what makes it
a really a worst-case scenario is the fact that this is coming what seven
or eight days after we just went through with Hurricane Harvey. And to
have those both happen at the same time just seems almost inconceivable.
MATHISEN: This is a different kind of storm one thing. I notice is that
it does seem to be moving a little more quickly than Harvey did. Harvey
just kind of sat there.
MATHISEN: Number two, the predictions are that more relatively of the
damage will come from wind than was the case in Harvey where most of the
damage was flooding. How does that change the insurability of some of the
losses that are sure to be sustained?
WALSH: Yes. Well, the area that it`s targeting right now in Miami, in
that area, is a very, very built-up area. There`s a lot of properties.
You`re right that this storm will not be as big of a flood risk, however,
there will be a big impact as it relates to the storm surge ahead of it.
And if — just funny, I just looked, Tyler, before I came in to check the
weather forecast on weather.com for Sunday. And on that weather app, it`s
saying that winds will be 140 miles an hour for Sunday, and those kind of
winds can cause tremendous damage, and it`s just such a buildup area and
there`s so much stuff in the way that the insured loss will probably be
significantly higher than it was potentially with Harvey, and any overall
losses could be comparable or even worse.
I mean the estimates for — put out by Swiss Re, for example, is that we
could see well over $100 billion from a track like this. So, it`s a —
it`s a big, dangerous, risky storm for us.
HERERA: And I think the key word is big. When you look at the scope and
the size of this particular hurricane, it is massive.
So, it`s not just Miami. I was watching it. It basically will hit most
parts of the state, with either the residual winds on one part of the
hurricane or on the back side of the hurricane. So, the scope is so much
bigger than Harvey.
WALSH: That`s right. And that the path is following a path that we saw
last year with Hurricane Matthew, but Hurricane Matthew took a jog to the
right just a bit and kept the worst winds just offshore. And that
possibility is still here.
I mean, just a very slight shift in the track can change the trajectory of
the damage from being catastrophic —
WALSH: — to being just severe. So, we`re — you know, we`re hoping for
that, but right now, I don`t know. All the models are looking pretty grim.
HERERA: Well, we will keep our eye on it. Paul, thank you very much.
Paul Walsh with IBM Global Business Services.
And a bit later in the program, Floridians may be watching the aftermath of
Hurricane Harvey to avoid the biggest threat to victims in Houston, fraud
and scams. That story coming up shortly.
MATHISEN: Well, the agreement on the debt ceiling that we told you about
earlier in the program helped lift the stock market. Investors had been
concerned about the possibility of a government shutdown if that debt limit
wasn`t raised. The Dow Jones Industrials up 54 to 21807, recouping some of
yesterday`s losses. Nasdaq gained 17, S&P 500 added seven.
HERERA: Economic activity grew at a measured pace across the country.
That`s according to the Federal Reserve`s Beige Book, which is a collection
of anecdotal facts about the economy.
The report indicated that labor markets remain tight and that there`s no
wage pressure. There is some concern of a slowdown in auto production.
Several districts noted that sales were down and inventories were rising.
MATHISEN: There are reports tonight that President Trump is unlikely to
nominate Gary Cohn to become the next chair of the Federal Reserve. Cohn
is currently the president`s top economic adviser. He was reportedly on a
short list of candidates to replace Janet Yellen if the president decides
to make a change.
But according to Dow Jones, his chances of leading the Fed dropped after he
criticized the president`s response to last month`s demonstrations in
Charlottesville. Separately, Federal Reserve Vice Chair Stanley Fischer is
stepping down, citing personal reasons. His resignation is effective mid-
October and Vice Chair Fischer has been an advocate of maintaining post-
crisis financial regulations.
HERERA: Still ahead, why a controversial drugmaker saw a double-digit rise
in its stock price today.
MATHISEN: New hope for those suffering from a rare disorder. Sarepta
Therapeutics reported positive results from a chronic clinical trial of an
experimental medicine for Duchenne muscular dystrophy. That sent shares of
the drugmaker higher by nearly 14 percent in trading today.
Meg Tirrell with a look now at the new promise and Sarepta `s controversial
MEG TIRRELL, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Sarepta`s
experimental medicine is for patients with Duchenne muscular dystrophy or
DMD, a rare genetic disease that causes progressive muscle wasting, it can
rob kids of their ability to walk before they`re teenagers, and can be
fatal before age 30.
Sarepta received FDA approval last year for the first medicine to treat
DMD. Called Exondys 51, it targets genetic drivers of the disease
affecting about 13 percent of patients, a few thousand people. Sarepta is
now testing additional medicines to reach more patients. The results today
were for one of those programs.
DOUG INGRAM, PRESIDENT AND CEO, SAREPTA: We had extraordinarily positive
results. We were statistically significant on every one of these measures,
really validating the approach that we`re taking to treating DMD, and
hopefully, a step forward in our mission to eventually treat all of DMD,
and all of the boys who are suffering.
TIRRELL: The results topped Wall Street`s expectations, driving Sarepta
stock higher. The company is the subject of one of the biggest
controversies in recent FDA history, when Exondys 51 was approved last
year, many questioned whether the data supporting it were strong enough to
warrant approval. The studies on the medicine were run in a small number
of patients and didn`t prove a clinical benefit. Approval was based on an
increase of a protein called dystrophin, important in the disease.
Facing intense lobbying from the patient community, the FDA granted what it
calls accelerated approval, requiring the company to prove in a
confirmatory study that the drug confers a clinical benefit. If it
doesn`t, the FDA could pull the medicine from the market. Those results
are a few years away.
(on camera): Analysts pointed out today that the new medicine helps
produce more dystrophin than Exondys 51, suggesting it too should receive
But the controversy doesn`t stop there. People also questioned Exondys
51`s price $300,000 or more a year per patient, a cost that Sarepta CEO
INGRAM: Sarepta is a small company and we alone have already invested a
billion dollars fighting Duchene muscular dystrophy and we`re not done yet.
This is a societal question more than a Sarepta question. That fundamental
question is, does it make sense — is it worth the investment to find
solutions for these devastating rare diseases that often are crushing to
children more often than not? And the answer, obviously, for Sarepta is
TIRRELL: The market for Exondys 51 could reach as much as $600 million a
year in the U.S., according to estimates from RBC Capital Markets. This
next medicine targets a smaller proportion of patients, just 8 percent of
those with Duchenne muscular dystrophy. Still, according to RBC estimates,
that market could reach $400 million a year.
For NIGHTLY BUSINESS REPORT, I`m Meg Tirrell.
HERERA: United Continental slashes its outlook and that`s where we begin
tonight`s “Market Focus”.
The airline warned passenger unit revenue would fall as much as 5 percent
in the current quarter, due to sales lost by Hurricane Harvey disruptions.
United also said last month`s threat from North Korea to strike the U.S.
territory of Guam has caused demand to weaken in air in that area. Shares
of United fell 1 percent to $60.33.
Harvey`s impact is also being felt by household goods maker Newell Brands.
That company which sells Rubbermaid storage containers said nearly all of
its resin suppliers located in Texas and Louisiana were not operational,
and as a result, Newell lowered its profit forecast for the year. Shares
were off 3 percent to $47.03.
MATHISEN: The hotel`s search site Trivago said slower than expected
revenue growth would cause the company to cut its full-year guidance.
Trivago said it wasn`t able to adjust its own spending to offset the
revenue drop and that hurt profits. Shares were punished today, dropping
16 percent to $12.49.
And after the bell, the home goods retailer RH formerly known as
Restoration Hardware — I thought that was just fine name by the way —
reported results that topped expectations. Same store sales rose more than
expected and that prompted the company to raise its outlook for the year.
Shares initially soared in after-hours trading but they finished the
regular day down fractionally at $49.42.
HERERA: As Florida watches the skies for Hurricane Irma, Texas is still
cleaning up from Hurricane Harvey and dealing with one of the worst effects
— fraud, scams and rip-offs.
Scott Cohn is in Houston with a look at what they`re facing and what
potential victims of Irma can learn.
SCOTT COHN, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): Here on
Sage Hill Drive, this is the storm after the storm.
Rosie Robledo got more than two feet of water in her south Houston home.
Since the water went down, she and her husband have been trying to save
what they can.
ROSIE ROBLEDO, HOUSTON RESIDENT: We`re staging things that can be salvaged
on our you know on our, you know, on our lawns.
COHN: With most of their worldly possessions out here, they`re having to
fight off scavengers who think they can help themselves.
ROBLEDO: This is hard enough for people that have been affected, you know?
And this is personal. This is emotional. It`s heartbreaking. It`s your
life turned upside-down.
COHN: Same situation at the neighbors.
SHELLIE ORTIZ, HOUSTON RESIDENT: I`ve had to run off people picking
through our stuff here, pilfering through it, and that`s not cool.
COHN: Then there are the contractors going door-to-door to make a quick
ARNOLD TODD, HOUSTON RESIDENT: They leave in business cars. You know,
what about helping someone? You know, taking out a rock (ph) moving down
COHN: This is just the first wave of what these and thousands of storm
victims will deal with, federal state and local law enforcement is on the
scene looking for fake charities, consumer frauds, including crooked
contractors, and schemes to rip off government aid programs like FEMA
LT. CHRIS LOHSE, HOUSTON POLICE DEPARTMENT: The reality is, there`s a lot
of money to be made by these fraudsters after a disaster.
COHN (on camera): Authorities say the scams are remarkably similar in
storm after storm after storm. And the bigger the storm and the more
publicity, the bigger those frauds are.
(voice-over): After Hurricane Katrina hit New Orleans in 2005, government
auditors found 16 percent of the emergency aid paid out in the first six
months after the storm was lost to fraud. That`s a billion dollars.
Contractor fraud was rampant, so was insurance fraud, identity theft,
More than 1,400 people arrested across the country by a joint disaster
fraud task force. A similar task force is already at work here in Texas.
KIM OGG, HARRIS COUNTY DISTRICT ATTORNEY: Know that if you are caught, the
full weight of the law, both federal and state, will be upon you.
COHN: For victims of this and future storms, authorities say ask
questions, demand identification, don`t give sensitive information unless
you`re sure you know who`s getting it, don`t make rash decisions. And
above all, be on guard.
For NIGHTLY BUSINESS REPORT, I`m Scott Cohn in Houston.
MATHISEN: Coming up, if you can`t afford your dream car, some have figured
out a way by renting out their ride.
MATHISEN: In the sharing economy, people have become comfortable renting
out things like a room in their house. And now, a new trend is developing,
people are now renting out their cars. The business is growing so fast
that automakers from General Motors (NYSE:GM) to Daimler-Benz are taking
Phil LeBeau has our story.
PHIL LEBEAU, NIGHTLY BUSINESS REPORT CORRESPONDENT (voice-over): When
Brian Rose bought his Tesla Model S two years ago, he took out a loan with
a monthly payment of $1,500. Too much to handle? Not for Rose, who has
cut that cost by renting out his Tesla a few days each month to total
BRIAN ROSE, TURO MEMBER: I`ve been running out. I had about 60 trips over
the last two years, and it`s basically helped pay off all of the payments
or depreciation on it. So, it`s as if I got to drive it for free, up until
LEBEAU: Rose rents out his Tesla through Turo a car share company that
features more than 160,000 vehicles on its app and Website — everything
from a high-end BMW to a more basic Toyota (NYSE:TM) Corolla, all being
rented out by their owners who are known as hosts.
ANDREA HADDAD, CEO, TURO: I think a lot of our hosts have realized that,
you know, for practically no costs, they can actually afford to own a nice
car and make that ownership experience much more pleasant for their
German automaker Daimler-Benz is investing in Turo, which now has over 4
million members. The growth in car-sharing has also caught the attention
of General Motors (NYSE:GM), which starred in maven and is expanding to
cities around the U.S.
What started almost 20 years ago with Zipcar offering hourly rentals has
grown in popularity, partially because the rising cost and hassle of owning
a vehicle has convinced many they`re better off renting for a day or two
whenever they need a car or truck, which is good news for Brian Rose who
says he`s made about $25,000 renting out his car.
ROSE: Since I do about a $200 day, if right now, if I get a few rentals
during the weekends of the month, then I might take in about half my
monthly payment. But there were some months, you know, if I got a longer
rental, like a week or two, or in some cases where you know a lot of like
two to three-day rentals during the month like weeks where I sometimes got
like double what my payment was.
LEBEAU (on camera): What about auto insurance for customers who rent
through Turo? Like rental car companies, Turo offers it, to cover any
damage total strangers might do to your car.
Phil LeBeau, NIGHTLY BUSINESS REPORT, Chicago.
MATHISEN: Twenty-five thousand bucks he`s made off of that.
HERERA: I know.
HERERA: Our jobs both dropped at the same time.
Well, OK, good for him. We`ll follow that story for you.
That does it for us tonight. I`m Sue Herera. Thanks for joining us.
MATHISEN: Thanks for me as well. I`m Tyler Mathisen. Have a great
evening and we`ll see you back here tomorrow.
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