Pain in the Gas: Fuel Prices Explode

[0:00] It's Friday, May 1st, and drivers are saying May Day over these gas prices. [0:05] We start here. [0:08] Gas and oil prices hit their highest levels since the Iran war began. [0:13] The national average now above $4.40. [0:17] Iran is determined to make this worse before it gets better, so how much worse could it get? [0:21] Congress ends its funding deadlock. [0:24] Lawmakers on both sides of the aisle acknowledge that there's blame really on both sides. [0:28] After 76 days, the Homeland Security Department is open for business, so what was it all for? [0:34] And the suspect in the White House Correspondents' Dinner shooting is staying locked up by choice? [0:39] He decided not to contest being held. [0:42] The government didn't even get to make its entire case in court, so what's the plan now? [0:48] From ABC News, this is Start Here. [0:51] I'm Brad Mielke. [0:52] As we're posting this pod, literally, at this very minute, [1:02] ABC News, The Washington Post, and Ipsos are releasing the findings of a new poll. [1:06] And in this poll, it's clear that Americans are not fans of the military operation in Iran. [1:13] 61% of Americans say it was a mistake. [1:16] While hardcore Trump fans are supportive, about half the Republicans who call themselves non-MAGA Republicans are against it. [1:23] That's got to be concerning to a Republican party looking ahead to the midterms. [1:28] But perhaps even more concerning to the president is how Americans are feeling about this economy. [1:33] Work hard, nice jobs, and stuff like that. [1:36] We can't even do that because the gas prices is up. [1:40] The war needs to stop everything. [1:41] Just need to come to an end. [1:43] Before this war, Americans were significantly more likely to say they were getting ahead financially under President Trump than falling behind. [1:51] That is no longer the case. [1:53] An increasing number say they are doing worse than before Trump was president. [1:57] 44% say they're driving less, specifically because of gas prices. [2:03] And what's important to understand here is that respondents were answering these questions last weekend through a couple days ago. [2:09] Meaning, people were this nervous over gas prices before what we saw yesterday. [2:16] Remember, the Strait of Hormuz has choked off a significant portion of the world's oil supply. [2:21] While Americans woke up yesterday, the new supreme leader of Iran, Mushtaba Khamenei, put out a new statement. [2:27] We still haven't seen him on camera since he was badly injured in the missile strike that killed his father. [2:32] But this made it clear that Iran plans to maintain control over the Strait. [2:37] This was a coordinated message across Iran. [2:40] As President Trump asked other countries to join in patrols, [2:44] Iranian military leaders said they plan to attack any forces supporting the U.S. in this effort. [2:50] The price of Brent crude oil skyrocketed to its highest level in years. [2:55] If it wasn't clear already, this is no longer just a war about missiles and nuclear material. [2:59] This is a war about oil, about gas, and about economic pain. [3:04] So how much pain are we facing? [3:06] Let's start the day with ABC's Elizabeth Schulze, who's been following these price hikes. [3:09] In fact, she's outside a gas station right now, Elizabeth. [3:11] What are you seeing? [3:12] Yeah, you know, Brad, where I'm looking right now at the sign, [3:15] and you can see exactly how this pain is being felt across the country. [3:19] We've got gas here close to $4.50 a gallon. [3:24] Diesel prices are approaching $6 a gallon here. [3:27] And these are moves that have been dramatic just in the past few days [3:31] when you look at the price hikes in gas across the country. [3:35] We've seen, Brad, the national average now above $4.40. [3:39] It's up $0.35 in a week. [3:42] I mean, that is a big move in a short amount of time. [3:45] You know, we're talking $1.46 since the start of the war. [3:48] And really, kind of the big picture here is that there are places in the country where it's even higher than that. [3:53] You've got California now with gas above $6 a gallon on average. [3:57] Several states approaching that $5 mark or above it, too. [4:01] So this is something that a lot of households and businesses, [4:05] these fuel costs, continue to go up because of those moves higher in oil. [4:09] And they hadn't planned for this. [4:11] You know, two months ago, gas was just below $3 a gallon on average. [4:16] So this has been a pretty big shock to the economy. [4:19] Is there a sense of why that's happening now, Elizabeth? [4:21] I mean, the Strait of Hormuz has now been kind of impassable for weeks. [4:24] And yet, like you said, gas prices just exploded over the last 48 hours. [4:28] Yeah, really what it comes down to is that there's typically a couple days lag between the oil price spike and gas price spike. [4:36] So some of this is really just the catch up in the spike in oil that we saw, [4:40] even at the end of last week, now coming through at stations across the country this week. [4:46] There are a couple other issues, too. [4:47] You know, some refinery issues in the Midwest led to pretty significant price increases in a couple of states there. [4:53] But the big picture is that this is all about those moves in oil. [4:57] And right now, we are in the middle of the biggest oil supply shock in history. [5:02] And this has now been going on for nine weeks. [5:06] Nobody going into this, all of the oil analysts I've been talking to for a long time, way before this war even, [5:12] would have told you that if we were nine weeks into the Strait of Hormuz being virtually closed, [5:17] they would have thought, Brad, oil would be even higher than it is now. [5:20] They were predicting $150, $200 a barrel oil. [5:23] One of the key reasons why it's actually not that bad is because the U.S. is exporting a record amount of its own oil. [5:30] The U.S. is producing a lot of oil and it's sending it out to other countries. [5:34] That's helping to kind of temper some of the, you know, what could have been a really even bigger price move. [5:39] But at the end of the day, it's still not enough to make up for the oil that's not moving through the Strait. [5:43] But that actually brings me to my next question, because early in this war, when oil went up, stocks went down. [5:49] And it seemed just obvious that if oil prices were higher, that was bad for the broader economy. [5:53] That was like the agreement I was understanding from economists. [5:57] It seems like we're not seeing the stock market react to this anymore. [6:00] Why? [6:00] It's a really great point. [6:01] There is now much more of a disconnect between what's happening in the oil market and what's happening with stocks. [6:06] And a big part of that comes down to corporate earnings. [6:09] We're in the middle of earnings season on Wall Street. [6:11] So this is when all the companies kind of put out their quarterly results. [6:14] They say if their revenue is on track and what they're looking for going into the rest of the year. [6:21] And the biggest companies in the world, Microsoft, Amazon, Google, reported blockbuster earnings, really all centered around AI and their investments in AI that they say are paying off. [6:32] And those stocks, by the way, make up about 40 percent of all of the S&P 500. [6:36] So if those stocks go up, the S&P 500 generally goes up. [6:40] But that does reflect a broader theme, too, where there is this disconnect. [6:43] We also got, Brad, just yesterday, the latest GDP numbers, which showed a huge surge in business investment. [6:49] So companies investing in AI and AI infrastructure. [6:53] But you've got a lot of other parts of the economy, including consumer spending, not looking quite as strong as that. [6:58] Still steady. [6:59] I see. [7:00] Like, that's the AI. [7:01] Like, AI is doing great. [7:02] That lifts all ships. [7:03] But that doesn't mean your average, you know, business is doing well. [7:06] I guess I'm wondering how that all affects President Trump and voters, because, like, how much longer can you do this without just suffering huge political consequences? [7:14] Yeah. [7:14] And we have seen the president's economic approval ratings near or at lows as these gas prices have spiked. [7:21] And as frankly, Brad, other prices in the economy have stayed really high, too. [7:25] You know, this is a president who promised on day one in office to bring prices down. [7:30] The gas will go down as soon as the war's over. [7:34] It'll drop like a rock. [7:35] There's so much of it. [7:36] It's all over the place, sitting all over the oceans of the world. [7:40] Inflation had been kind of heading in the right direction at the start of this year. [7:45] This oil supply shock completely threw a wrench in that. [7:49] You now have inflation accelerating, meaning prices are going up. [7:53] And it's not just for oil and gas, because you've got diesel costs going up. [7:57] And diesel is basically the lifeblood of the American economy. [8:01] Everything moves around the entire country on diesel, on trucks, on tractors, machinery. [8:06] And those costs, those shipping costs that companies are paying for diesel for trucking, those are getting passed down. [8:12] You know, gas prices don't affect just gas prices. [8:15] It's also the price of groceries. [8:16] It's the price, you know, of just everything that's in the economy. [8:20] We have adults that are going without food at times so their children can eat. [8:24] Just this week, I had a chance to talk to Jessica Woods. [8:27] She owns a local grocery store here in Washington. [8:30] And she told me that her shipping surcharges have doubled since the start of the war. [8:36] Those charges have risen from as low as $20 to now it's $55 per delivery. [8:41] The fuel charge has more than doubled. [8:43] Has more than doubled, yeah. [8:44] You know, getting food delivered when you're a grocery store is non-negotiable. [8:47] You have to pay for those deliveries. [8:49] You have to pay for that shipping. [8:50] When you're paying twice as much in surcharges, at some point you have to make the decision, [8:55] well, how am I going to afford that? [8:57] As it becomes a factor for more and more of our deliveries, [9:01] we have to start evaluating that as part of the price of the items as they're coming in. [9:07] You have to start thinking about it if you'll pass it down. [9:09] Exactly, yeah. [9:10] And you're probably going to pass it down. [9:12] That's what Jessica said. [9:13] She said it's a really hard decision for them, [9:15] but something that in order for them to stay in business, they have to do. [9:20] That's a decision being made by businesses across the country is, [9:25] how long can we absorb these higher fuel costs? [9:27] And at what point do we pass them down to consumers? [9:29] And when consumers are paying more for gas plus other goods, that's where you might maybe start to see some more cracks in spending in a way that we haven't seen where spending has held up pretty well up until now for at least a lot of households. [9:43] I see. [9:44] And so that's why, like, it's not just gas, perhaps. [9:46] You could see other prices go up just around the economy. [9:49] And really helpful to sort of understand why we continue to see these broader economic numbers do well while so many Americans are like, I'm not feeling that. [9:55] That really helps break it down. [9:57] All right. [9:57] Elizabeth Schulze, I guess fill it up as far as you can. [10:00] Thank you. [10:01] I'm going to try to wait. [10:03] I'm going to hold out hope for some sort of drop in the next few days. [10:06] Okay. [10:06] Thanks. [10:08] Next up on Start Here, a government shutdown ending should be good news, but no one's celebrating this. [10:14] We're back in a bit. [10:15] Remember a few weeks ago when a lot of airport workers just seemed absolutely miserable due to a partial government shutdown affecting the Department of Homeland Security? [10:28] They weren't getting paid. [10:29] That's a pretty good reason to be miserable. [10:31] It's why a lot of TSA agents were calling out of work. [10:34] Bills were coming due. [10:35] It was a choice between putting gas in my car and paying my light bill. [10:38] I don't want to call home and ask for a loan again. [10:42] You don't even know how to tell your landlord. [10:45] You don't know what to tell your kids. [10:47] They would get back pay eventually, but they couldn't afford to just keep showing up and waiting for a paycheck. [10:52] Lines got long. [10:53] Flyers got cranky. [10:54] Airlines sounded the alarm. [10:56] Eventually, President Trump moved some money around via executive order to send those overdue checks to some DHS workers. [11:03] But guess what? [11:04] That shutdown didn't end. [11:06] It has been continuing for weeks. [11:09] A bipartisan group of senators thought they had a solution, but House Republicans disagreed until yesterday. [11:15] This has come to a conclusion, we think. [11:17] Let's bring in ABC's Capitol Hill correspondent, Jay O'Brien. [11:19] Jay, the president signed this. [11:21] Is the shutdown finally over? [11:23] Yeah, Brad, the shutdown is finally over. [11:26] And it was after 76 days. [11:30] A record 76 days. [11:32] And the way it ended was without any pomp and circumstance, without any ceremony, without even a tense vote. [11:38] It just ended in what's called a voice vote on the House floor. [11:42] All those in favor say aye. [11:44] Those opposed say no. [11:47] And the ayes had it. [11:48] And it passed. [11:49] There weren't even that many members of Congress in the chamber. [11:53] And, Brad, remember, this is that deal. [11:56] Originally, it was a bipartisan deal that funds every single agency inside the Department of Homeland Security. [12:02] Just not ICE and Customs and Border Protection, the two agencies that are critical in President Trump's immigration crackdown. [12:09] But it does fund the TSA. [12:11] It funds FEMA. [12:12] And it funds all of those various agencies at a time when the clock was really running out. [12:19] They've been paying TSA agents and FEMA employees and other DHS workers with money that was given, really, to immigration enforcement in President Trump's One Big Beautiful Bill Act last summer. [12:30] They've been moving that money around inside DHS's budget. [12:33] And what the new Secretary of Homeland Security said not long ago was that come the first week of May, next week, that money was going to run out. [12:42] And you're going to run into the same situation you were in some weeks back with TSA agents, other DHS employees not getting paid and calling out sick and causing all of those issues that we saw. [12:55] But wait, wait, wait. [12:55] So they had this bipartisan compromise where they're funding everything except ICE. [12:59] I thought that was the compromise that Democrats were asking for weeks ago. [13:03] Like, couldn't this have just been handled then? [13:05] What changed? [13:06] To understand how we got here, Brad, you've got to go back months. [13:12] We can overhaul DHS to rain in ICE. [13:16] In mid-February, the Department of Homeland Security shuts down. [13:19] And Democrats in the Senate at the time, because the battle's being done in the Senate, the funding had already passed out of the House, said, we are not going to vote for DHS funding unless there are reforms to ICE because of, for example, what we saw in Minneapolis and in other American cities. [13:36] It's really in the hands of the Democrats. [13:38] We are, we're right to move. [13:39] That back and forth negotiation goes on for weeks and they don't get anywhere. [13:44] Republicans and Democrats don't agree to any reforms to ICE. [13:48] So then finally, at the end of March, there is this compromise deal where Republicans and Democrats in the Senate come together and say, after a lot of false starts and deals that came together and fell apart, that they would fund every single agency inside the Department of Homeland Security, just not ICE and Customs and Border Protection. [14:08] It's not the way to fund the Department, Mr. President, but we are out of time for the critical responsibilities and tens of thousands of workers currently going without pay. [14:19] That passes in late March after a lot of consternation and it goes over to the House and House Republicans don't like this deal at all. [14:28] This gambit that was done last night is a joke. [14:31] We will not accept what the Senate sent over. [14:35] They say you're doing a deal that doesn't have any immigration funding in it. [14:39] What are we going to do? [14:40] And so Republicans in the Senate and the House then come to this other deal amongst themselves saying, we'll do funding on immigration enforcement on our own without Democratic votes. [14:52] And that will be a parallel process to funding all the other agencies inside DHS, including the TSA. [15:00] Finally, on Wednesday night, late at night, Republicans in the House passed this blueprint for that immigration funding. [15:06] And then they say to themselves, OK, we've made enough progress. [15:10] Now we are going to pass this legislation that had been sitting on their desk for weeks to fund the rest of the Department of Homeland Security. [15:19] Wait, wait, wait, wait. So I'm just thinking of all the workers, thousands and thousands of workers around the country that were like, I had to pay extra for child care or I had to take on a second job or I was put in a really scary financial situation. [15:34] For what? Like what? I guess who got anything out of this? [15:37] What are we hearing from Democrats or Republicans? [15:39] What we've been seeing, Brad, up here on Capitol Hill, are lawmakers on both sides of the aisle acknowledge that there's blame really on both sides of the aisle here. [15:49] You heard me trash the bill when it came over the first time because it literally was drafted in the middle of the night. [15:54] It was about two o'clock in the morning when they came up with the final language and it was haphazardly drafted. [15:58] There was this consternation amongst House Republicans, for example, rejecting a deal in the Senate that they ultimately agreed to that didn't really need to happen. [16:07] Right. They were pushing back on a deal that ultimately became the one that they had to vote up and approve. [16:12] They will say that they acted in the best interest of getting that immigration funding over the goal line. [16:17] We're going to protect the homeland, even though Democrats are unwilling to do it. [16:20] On the flip side, Democrats, remember, think back to the beginning of this DHS shutdown, were holding back their votes, demanding reforms to ICE. [16:30] The American people want to see the masks come off. The American people want to see body cameras turned on. [16:37] There have been no reforms to ICE. [16:39] If that's your bar, you still haven't gotten that. [16:41] They have not hit that bar. [16:42] Now, Democrats are still framing this as a win because they're saying they forced Republicans to pass a funding package that right now doesn't include any immigration funding. [16:52] It is about damn time that you come forward and do this. [16:57] We proposed this. I proposed it 79 days ago. [17:02] But Republicans ultimately, if they can get together, are going to pass that immigration funding on their own at some date in the future. [17:09] And looking forward then, so everything's getting funded for now. [17:13] We'll see how quickly this happens again. [17:15] But if you're an immigration agent, are you now worried about when when your department gets shut down by the government? [17:21] What happens next for immigration enforcement? [17:24] Ultimately, right now, there's enough money in DHS's coffers to continue immigration enforcement. [17:29] And Republicans have said they're going to try to move quickly to get that immigration enforcement money over the goal line soon. [17:35] And it's going to be funding for ICE and CBP. [17:37] That's three years worth. [17:39] So they say they're never going to have to tackle this again for the rest of President Trump's term. [17:43] But in the longer term, Brad, this is really a message to every single federal employee. [17:51] They had to go through the longest entire government shutdown some months ago. [17:56] And now you've got the longest partial government shutdown with DHS. [18:00] It shows the level of gridlock that can occur up here on Capitol Hill without really any side getting entirely what they wanted. [18:10] Right. [18:10] Now, you can argue that's the American system of government compromise. [18:15] Not everybody gets what they wanted. [18:16] But you had to shut down multiple times to get there. [18:21] That's not the way that Congress is designed. [18:23] All right. [18:24] Jay O'Brien at, I guess, the end of a very necessary, unnecessary shutdown for these workers. [18:31] Thank you so much. [18:31] Thank you, Brad. [18:35] The shooting at the White House Correspondents' Dinner was chaotic, although no one was killed. [18:40] Yes, it was a shooting, meaning gunshots went off. [18:42] But it's still unclear who even fired them all. [18:45] And the suspect, Cole Allen, allegedly went to great lengths to plan this. [18:49] But yesterday, during a court appearance, his legal strategy was perplexing to a lot of people. [18:53] So a lot of unknowns. [18:55] Let's check in with Chief Justice Correspondent Pierre Thomas to get some clarity. [18:58] Pierre, the suspect appeared in court yesterday. [19:01] Can you just describe sort of what happened there? [19:03] Well, this is the second time we've seen him. [19:05] He walked into court on Thursday wearing an orange jumpsuit, looking very calm, as he did on Monday, [19:13] but appearing a little bit less energetic. [19:15] I don't know how exactly to describe it, but I guess the week has worn on all of us to some degree. [19:23] He did something that is unusual, at least in my time covering the court. [19:28] There was supposed to be a detention hearing in which the government was going to argue that he should be detained all the way pending trial. [19:37] Thursday, he decided not to contest being held. [19:42] And that led to a back and forth because the government wanted to present its argument for him being held. [19:47] The judge wasn't buying it and saying, look, you won, that he was not contesting being held. [19:53] And that was unusual, I should say. [19:56] Oh, that's interesting then that it sounded like the government wanted to present stuff for why he should be held. [20:01] And the judge was like, no, we don't need to hear it. [20:03] So what was the government going to say? [20:05] I think the government was prepared to list the various things that they believe had been done, allegedly, in a premeditated fashion. [20:14] That's why you saw, in part, those photographs, which the government thinks points to a person who was being very thoughtful and very crafty. [20:23] And also who seemed quite comfortable with the notion of what was about to take place. [20:28] Do we still have any clarity on who fired their weapons? [20:33] Like, was it the Secret Service? [20:34] Is Allen alleged to have fired at people? [20:36] What's the latest on that? [20:38] Now, the government filed some new information under Discovery, provided this information to the Defense Council. [20:48] And we did get some additional details, again, from the government's perspective of what they said happened. [20:53] Number one, they claim that there's visual evidence that's been obtained by the FBI showing, in their mind, that the suspect fired the shotgun as he passed one of the magnetometer sets leading down to where the ball would have been taking place. [21:10] They say they can prove that also by the fact that they have found buckshot, a buckshot pellet, at the scene, which they believe denotes the gun having been fired. [21:25] Oh, and he would be the one with the shotgun, allegedly, so that would be his gun, theoretically. [21:30] Right. [21:30] He's the only one that has a shotgun in that setting, and that would have been his weapon that fired it. [21:35] They also claim that they have an eyewitness account from the officer who sustained some sort of gunshot to his vest. [21:48] So, again, visual evidence in terms of video, also the buckshot pellet, and then the description by the officer who was involved in terms of being hit in the ballistics vest. [22:01] Right. So we're getting more video and more photos from the night in question as well. [22:06] Pierre Thomas has been reporting on all this all week. [22:08] Thank you so much. [22:09] My pleasure. [22:11] Okay, one more quick break. [22:12] When we come back, you are now free to move about the continent. [22:15] One last thing is next. [22:20] And one last thing. [22:25] Something happened yesterday that hasn't happened for years. [22:28] A commercial jetliner took off from the U.S. bound for Venezuela. [22:32] It is with so much pride that I announced the boarding of our flight to Caracas. [22:39] This was an American Airlines flight direct from Miami, which since 2019 has not been possible. [22:48] Remember, for years, leader Nicolas Maduro was carrying out brutal crackdowns on dissidents, beyond anything even his predecessor Hugo Chavez had been accused of. [22:58] Hauling opponents off to detention and silencing the press. [23:02] Forcibly removed from their homes as a woman is heard screaming for help from neighbors. [23:07] The international community began sanctioning the country. [23:11] The U.S. closed its embassy. [23:13] This year, of course, Maduro was captured by U.S. special forces, and his successor promised to play ball with the Trump administration. [23:19] Well, since then, diplomatic ties have been re-established. [23:23] Last month, the embassy reopened. [23:25] And while there are reasonable arguments over the role of the U.S. military here or over Venezuela's political future, [23:32] most of the people on board this flight were not focused on that. [23:36] April 19, the price become available to purchase. [23:40] I was there. [23:41] 12 on 1, I purchased my ticket, and I'm free around. [23:45] Lennart Archoa was handed a small Venezuelan flag as he boarded. [23:49] I'm from Venezuela. [23:51] The last time I was here in Venezuela was 18 years ago, and I'm very excited to go and see the family. [23:58] Over just the last decade, 8 million Venezuelans have fled their country, facing poverty and persecution. [24:04] This mass exodus has changed the landscape of South America and has created a Venezuelan diaspora around the Western Hemisphere, [24:12] especially in the U.S. [24:13] Erika Rolo said she left her country seven years ago. [24:19] Parents have now been disconnected from children, husbands from wives, brothers from sisters. [24:25] Erika plans to see her cousins first. [24:27] A few hours later, this plane landed. [24:29] The jet taxied under an arc of water, kind of a water cannon salute. [24:37] The pilots opened their windows, displaying both Venezuelan and American flags. [24:42] Perhaps most importantly, they unloaded passengers and headed right back to Florida, [24:47] the beginning of many more round trips to come. [24:52] Yeah, just some super powerful reunions there. [24:55] Start Here is produced by Kelly Therese, Jen Newman, Anthony Ali, Aaron Ferrer, and Emily Schutz. [25:00] Ariel Chester is our social media producer. [25:02] Josh Cohan is director of podcast programming. [25:05] I'm our managing editor. [25:07] Thanks to John Newman, Tara Gimble, Eamon McNiff, and Katie Dendos. [25:10] Special thanks this week to Trevor Hastings, Jack Date, Emily Guskin, and Sue Yoon. [25:15] I'm Brad Milkey. [25:16] I'll see you next week.