Yes, the U.S. owes itself money

Summary

Marketplace Podcast Summary
Episode: Yes, the U.S. Owes Itself Money
Host: Kai Ryssdal
Release Date: February 4, 2025

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Economic Uncertainty and the Oil Market

The episode opens with host Kai Ryssdal highlighting the pervasive economic uncertainty affecting various sectors, particularly the oil market. Ryssdal notes, “Until further notice, the only economic certainty around here is uncertainty” (00:30).

Elizabeth Troval delves into the complexities of the global oil supply and demand balance. Opus analyst Tom Close explains, “This was supposed to be a year where it would be very, very close on balances” (01:57). However, demand from major consumers like China, the U.S., and the EU has plateaued. Joe Delora from Bravo Bank observes, “The biggest consumers of crude... have seen demand flattening out” (02:20).

On the supply side, Tom Close points out the surge in production from countries such as Guyana, Brazil, Canada, and the U.S., alongside OPEC's efforts to reintroduce previously cut oil into the market. Mark Finley from Rice University adds, “They’re trying to regain some market share” (02:50). The episode discusses whether the market can absorb increased supply without further depressing prices. Close forecasts, “You were likely to see the highest prices of the year in the first hundred days and you'd see the lowest” (03:23), suggesting potential relief for consumers as oil and gasoline prices trend downward.

Lending Trends and Business Loans

Shifting focus to the state of lending, Ryssdal introduces the Federal Reserve's Senior Loan Officer Opinion survey, which reveals declining mortgage loan demand but rising business loan applications. Justin Ho from Marketplace interviews several banking leaders to unpack these trends.

Brad Bolton, CEO of Community Spirit Bank, notes, “Demand for business loans has held fairly steady over the last few years” (04:23). He emphasizes the necessity for businesses to fund daily operations, citing, “If a logger or someone in construction, if their bulldozer is worn out, they've just got to buy it” (04:36). However, Bolton also mentions that businesses are increasingly inquiring about future interest rate movements to time their borrowing strategically.

Alice Frazier, CEO of the Bank of Charlestown, highlights that businesses now feel more confident to invest, stating, “If they've got the opportunity to grow their business, I think they're looking to go ahead and invest today” (05:10). This confidence is attributed to a more stable economic environment with cooling inflation and easier labor markets.

Conversely, Robert James II of Carver Financial Corporation warns of ongoing uncertainties, particularly for businesses reliant on federal funding. He explains, “Businesses that receive money from the federal government...are hesitant to take out loans because if federal funding freezes or dries up” (05:57). Despite these concerns, James remains optimistic about his local economy’s resilience, bolstered by strong job creation and high demand for real estate.

Labor Market Analysis

The labor market serves as a focal point in discussing economic stability. Katherine Ann Edwards, a labor economist, critiques the prevailing perception of a robust labor market. Ryssdal brings Edwards into the conversation, noting, “The labor market, as most anybody who is even passingly familiar will tell you, seems pretty good. You differ, I guess” (07:41).

Edwards emphasizes the importance of the hiring rate over the traditional unemployment rate. She explains, “The hiring rate measures how many workers are being hired into the labor market” (07:54). Edwards argues that despite low unemployment rates, the stagnation in hiring indicates a weakening labor market, diminishing workers' leverage to negotiate wages and benefits. She warns, “The American worker has lost all leverage in the job market” (09:29), highlighting a significant shift from the seller's market experienced during the pandemic.

Edwards further contrasts the current hiring decline with the Great Recession, stating, “In the Great recession, hiring fell 1.3 points. The decline in hiring that we have seen is the exact same” (10:14). This analogy underscores the severity of the present labor market's fragile state, suggesting that while unemployment remains low, the overall strength and dynamism of the labor market are compromised.

National Debt and Fiscal Sustainability

A substantial portion of the episode addresses the U.S. national debt, particularly focusing on intra-governmental debt versus public debt. Sabri Benishore introduces the topic, explaining that while the total governmental debt exceeds $36 trillion, a significant portion—over $7 trillion—is intra-governmental (17:20).

Eugene Sterle of the Brookings Tax Policy Center elaborates, “By law, it could only do one thing. Social Security essentially bought government debt” (17:58). This intra-governmental debt involves obligations like Social Security purchasing government securities, which the government repays with interest.

Alex Arnon from the Penn Wharton Budget Model and Brad Setzer from the Council on Foreign Relations clarify that intra-governmental debt is an accounting measure and does not impact the market in the same way as public debt. Setzer notes, “The intergovernmental debt is much more an accounting device” (18:38). The focus, he explains, should be on the $29 trillion owed to the public, including foreign holders, which directly influences government borrowing costs and economic stability.

Lawrence Kotlikoff of Boston University raises alarms about the sustainability of current debt levels. He states, “The national debt is currently 20% larger than the size of the entire US economy, and he says it is on a growth path that is not sustainable” (18:53). This perspective underscores the impending fiscal challenges the U.S. faces, questioning the long-term viability of maintaining such debt levels without comprehensive fiscal reforms.

Rebuilding After LA Fires

The episode transitions to a poignant segment on the aftermath of the Eaton and Palisades fires in Los Angeles, focusing on the intricate and prolonged process of rebuilding. Sue Pasco shares her personal experience of evacuating her home with minimal belongings (21:02). She reflects on the emotional toll, stating, “People need to go in. They need the closure” (21:59), emphasizing the psychological challenges residents face in accepting and initiating the rebuilding process.

Carl Banks from the Environmental Protection Agency (EPA) provides insights into the hazardous waste removal phase, detailing the extensive efforts required to ensure public safety and environmental protection. Banks mentions, “This is EPA's largest response in our history for a wildfire” (22:44), highlighting the scale of the operation.

Mark Pastrella from LA County’s Department of Public Works outlines the logistics of debris removal, explaining the necessity of the Right of Entry program, which requires property owners to fill out extensive forms to expedite the cleanup process (23:42). The program prioritizes properties in high-density areas to maximize efficiency, with expectations that 80-90% of debris will be cleared within a year (24:07).

Sue Pasco anticipates a prolonged return to normalcy, sharing, “It's going to be a year and a half to two years at a minimum” (24:54). The segment underscores the long-term commitment required from both residents and government agencies to restore the affected communities fully.

Additional Highlights

• Stock Market Performance: The Dow Industrials, Nasdaq, and S&P 500 all saw significant gains, with Dow up 3.10% (15:17).
• Corporate Earnings: ExxonMobil reported better-than-expected Q4 earnings with a 20% increase in oil production, while Chevron's earnings fell short despite flat production year-over-year (15:17).
• Spotify Developments: The National Music Publishers Association demanded Spotify remove over 2,500 unlicensed songs, yet Spotify's shares rose by 13.2% following the announcement of its first-ever profit (15:17).
• Waffle House Surcharge: In response to a bird flu-induced egg shortage, Waffle House introduced a 50-cent per egg surcharge, impacting approximately 272 million eggs served annually (25:41).

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Timestamps

• Economic Uncertainty and Oil Market: 00:30 – 03:35
• Lending Trends and Business Loans: 03:35 – 06:23
• Labor Market Analysis: 06:23 – 12:29
• National Debt and Fiscal Sustainability: 16:31 – 21:02
• Rebuilding After LA Fires: 21:02 – 25:41

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This episode of Marketplace offers a comprehensive overview of pressing economic issues, from the fluctuating oil market and evolving lending landscapes to deep dives into the labor market's health and the nation’s daunting debt challenges. Additionally, it humanizes the broader economic narratives by spotlighting the real-world consequences of natural disasters and the intricate processes involved in community recovery.

Transcript

[Elizabeth Troval]

This Marketplace podcast is supported by the Glassdoor app. See who's hiring, what they're paying and join anonymous conversations with professionals like you in the new Glassdoor community. Whether you're job seeking or want to get more out of your current role, Glassdoor now offers real time tips for career success from leading voices like best selling author Adam Grant. Make the most of your work life. Find your work people on the Glassdoor app and get ahead together.

[Kai Rysdal]

Until further notice, the only economic certainty around here is uncertainty. Stories along those lines on the program today From American Public Media, this is Marketplace in Los Angeles. I'm Kai Rysdal. It is Tuesday today. This one is the 4th of February. Good as always, Debbie. Along everybody. Another trade and tariff war. Uncertain although likely. Interest rate cuts, uncertain although becoming increasingly unlikely. See also trade and tariffs. Control of the financial plumbing of this economy as we talked about yesterday, uncertain. And with uncertainty comes volatility, the chosen manifestation of which for us today is crude oil. Reuters reports President Trump is going to crack down on Iran in oil exports. There are the tariffs on Canadian oil that are likely or possible or probable. It's uncertain in a month or less. But the oil market and oil prices are complicated. So Marketplace's Elizabeth Troval goes global to get us going.

[Elizabeth Troval]

2025 was poised to be kind of chill when it came to the balance of global oil supply and demand, says Opus analyst Tom Close Up.

[Tom Close]

This was supposed to be a year where it would be very, very close on balances. In other words, supply and demand would be pretty much even with maybe a little bit of extra supply.

[Elizabeth Troval]

On the demand side, Joe Delora with Bravo bank says the biggest consumers of crude, China, the US and the eu, have seen demand flattening out.

[Tom Close]

The narrative that oil demand is growing for like the past 50 or 70 years is shifted, okay, period.

[Elizabeth Troval]

At the same time, on the supply side, there's plenty of new oil being produced.

[Tom Close]

You have Guyana, you have Brazil, you have Canada, and you have the US.

[Elizabeth Troval]

And you can't forget about opec. They're trying to find room in the global market for the additional oil they've been sidelining. Mark Finley is with Rice University.

[Mark Finley]

That group has a plan that they endorsed again just yesterday to begin putting more barrels back into the market on the back of, you know, successive rounds of production cuts that the group has implemented, going all the way back to 2022.

[Elizabeth Troval]

They're trying to regain some market share. The question is, will the market allow them to do so without weakening prices further? Because when we look at the oil price forecast. Tom Close says 2025 could turn out pretty well for consumers.

[Tom Close]

You were likely to see the highest prices of the year in the first hundred days and you'd see the lowest.

[Kai Rysdal]

Prices in the last hundred days.

[Elizabeth Troval]

That's right. The trend has been pointing towards lower oil and also gasoline prices, which President Trump has said he's wanted. All he has to do is leave the market alone. I'm Elizabeth Troval for Marketplace.

[Kai Rysdal]

Uncertainty factors heavily into how much consumers and businesses are willing to borrow, of course, about which this we got a new read on the state of lending in this economy this week of the Federal Reserve's Senior Loan Officer opinion survey. It asks bankers about their lending standards and the loan demand that they are seeing. The upshot is, is that lenders are generally seeing less demand for mortgages. Not a huge surprise given mortgage rates right now. But they are seeing more demand for business loans. So Marketplace's Justin Ho called a couple of bankers to ask him what's what.

[Justin Ho]

At Community Spirit bank in Red Bay, Alabama, demand for business loans has held fairly steady over the last few years, says CEO Brad Bolton. That's because many of his clients need to borrow to fund their day to day operations.

[Tom Close]

If a logger or someone in construction, if their bulldozer is worn out, they've just got to buy it.

[Justin Ho]

But recently, Bolton says, some customers have been asking about whether interest rates will fall this year because they're trying to figure out when they should borrow more.

[Tom Close]

Do I go ahead and make this purchase now or do I wait six months where maybe rates will be cheaper?

[Justin Ho]

Bolton says that's a sign that businesses want to borrow. Alice Frazier is the CEO of the bank of Charlestown in West Virginia. She says companies have had several years to figure out how to survive amid high interest rates. As a result, if they've got the.

[Tom Close]

Opportunity to grow their business, I think they're looking to go ahead and invest today and get that new revenue sources going for them.

[Justin Ho]

Fraser says it helps that the economy in many ways is more certain. For instance, inflation has cooled. Labor is easier to find.

[Tom Close]

If I'm a maid service company and I need another car and a couple more people, I'm going to make those.

[Elizabeth Troval]

Investments because now I know what my.

[Tom Close]

Cost of labor is going to be.

[Elizabeth Troval]

Because it's settled down.

[Tom Close]

I know what the cost of the car is going to be because they're more available.

[Justin Ho]

There's still plenty of uncertainty going around, too. Robert James II is CEO of Carver Financial Corporation, which owns banks in Alabama and Georgia. He says businesses that receive money from the federal government, like health care clinics are hesitant to take out loans because if federal funding freezes or dries up.

[Tom Close]

Then that's going to impact their cash flow, which is going to impact their ability to service any debt that they take on.

[Justin Ho]

But James says one thing he's not worried about is his local economy.

[Tom Close]

There's continual high demand for real estate because we have so much in migration to the Sunbelt, we have strong job creation in our region.

[Justin Ho]

James says that means demand for loans in his region is likely to keep growing. I'm Justin Ho for Marketplace.

[Kai Rysdal]

One might think given all the aforementioned uncertainty, that traders on Wall street would have been a tad reserved today. One would have been wrong. We'll have the details when we do the numbers. Big week for labor market data this week is the January unemployment report comes to us on Friday. Today it was jolts the job openings and labor turnover survey. Lots o data in there. Of interest to us today is the hiring rate, which was flat in December. If you were with us this past Friday, you heard the Washington Post Heather Long describe the hiring rate in this economy as anemic. Labor economist Katherine Ann Edwards is worried about that same thing. She wrote about it in Bloomberg the other day. So we got her on the phone to explain. Katherine, welcome to the program.

[Katherine Ann Edwards]

Thank you so much for having me.

[Kai Rysdal]

The labor market, as most anybody who is even passingly familiar will tell you, seems pretty good. You differ, I guess.

[Katherine Ann Edwards]

The unemployment rate is certainly good, but it is not predicting, I would say, strength in every other indicator that we have of the labor market.

[Kai Rysdal]

You like this thing called the hiring rate. What is it and why do you like it?

[Katherine Ann Edwards]

The hiring rate measures how many workers are being hired into the labor market.

[Kai Rysdal]

Say more about it. Yeah.

[Katherine Ann Edwards]

So it's I think the number itself probably means nothing to people. If I were to tell you the hiring rate is 3.3 like it's not flashing across Times Square. Oh, my God.

[Tom Close]

Right.

[Katherine Ann Edwards]

It's really just the relative movement of hires lets you know whether or not firms are expanding their workforces.

[Kai Rysdal]

So put that into context. Right. One of the things you point out in this piece and we've said actually through a good part of the pandemic is, you know, the labor market. A key part of it in terms of workers having power is their ability to leave their jobs with confidence that they can get another one.

[Katherine Ann Edwards]

Exactly. And when we were coming out of the pandemic, we called it, you know, the great resignation, the great reshuffle. But that was the peak of the hiring rate in the US that so many workers were changing jobs, moving to different jobs, and that's associated with wage growth. If you can't have that outside offer, if you don't have that leverage, not only can you not leave, but you can't kind of bargain for higher wages as easily. That outside offer is a really important part of you being able to ask for more.

[Kai Rysdal]

Just to that word you used leverage. It's the headline of this piece and writers obviously don't get to choose their own headlines. But you say the headline of this piece is the American worker has lost all leverage in the job market. And that's gonna strike some people because for a long time, in the beginning of the pandemic, it was the workers have all the leverage. Right. Even as recently as, I don't know, a year, 18 months ago, it was.

[Katherine Ann Edwards]

Certainly a seller's market and one that was very beneficial for a lot of American workers and their families. But, you know, their power has shifted. And it's not as if we don't know what's going on or if there's some mystery there we have to unravel. The Fed, through raising interest rates, has been trying to weaken the economy in order to relieve the upward pressure on price. Every economist worth their salt, and I'm sure you had someone on your program say, we're going to have to get the unemployment rate to 6% to really bring prices down. They were all proven wrong. But that's not to say the labor market has been unscathed. And where you see the weakening of the labor market is on the hiring side. That is a weakness in the labor market. It's not a high unemployment rate, but it's not nothing.

[Kai Rysdal]

Right. With the acknowledgement that you're a labor economist and not a media critic, do you suppose we're covering the labor market wrong?

[Katherine Ann Edwards]

Why? Kai, I would never.

[Kai Rysdal]

No, go ahead, please. Welcome to my program, but also tell me I'm doing it wrong.

[Katherine Ann Edwards]

Yeah, yeah. So I made a list. No, I think it's hard to connect all of the pieces of the labor market together and see not just where we're standing, but the direction we're facing. And if the media struggles with it, economists do too. What I think is the truest thing about the economy right now is that nobody feels like we're normal again.

[Kai Rysdal]

Wow. Whatever's going on, it's been five years and we're still not normal.

[Katherine Ann Edwards]

It's been five years and we're still not normal. We're not hiring like normal. We're not seeing wages like normal. We're not seeing the same type of investment decisions. And at the same time, we're still watching price reports with bated breath. So what I tell people is that on some level you can imagine the labor market is kind of standing over a cliff with a strong wind at its back. I mean, it hasn't fallen over, but it's not in a good place. And the kind of evidence of its insecurity is just this precipitous decline in hiring. And just to make it clear that I'm not trying to maybe be dramatic, who would ever accuse an economist of that? But in the Great recession, hiring fell 1.3 points. The decline in hiring that we have seen is the exact same.

[Kai Rysdal]

We're going to leave it there. Katherine Edwards, the labor economist and economic policy consultant, writing in Bloomberg, most recently in a piece called the American Workers Lost All Leverage. Katherine, thanks so much. Appreciate your time.

[Katherine Ann Edwards]

Thank you.

[Kai Rysdal]

We're five short days away from the super bowl of American marketing, also known as, I mean, you know, the Super Bowl. As we mentioned the other day, $8 million is the going rate for a 32nd spot this year for companies to put their logos and brands front and center in the Zeitgeist and alongside the obligatory beer and car commercials. This year you can expect plenty of ads from big tech companies for their AI assistants or AI agents or even AI eyewear. But selling artificial intelligence to an audience of more than 125 million people can be tricky. As Marketplace's Matt Levin reports, commercials for.

[Mark Finley]

AI products can produce as much backlash as buzz. Remember this Google Ad where a dad uses AI to help his daughter write a fan letter to an Olympic track star?

[Tom Close]

And I'm pretty good with words, but this has to be just right. So Gemini, help my daughter write a letter telling Sydney how inspiring she is.

[Mark Finley]

Audiences really dislike the thought of outsourcing a heartfelt letter to a robot. Google ended up pulling the ad from TV. Kevin McTeague is a marketing professor at Northwestern.

[Tom Close]

You've got to be very careful the context in which you present your AI use case. If it's seen as somehow dehumanizing us, then it's going to probably get a negative reaction.

[Mark Finley]

That may be why Google is planning commercials featuring how small businesses are using Gemini. You can expect to see plenty of business to business AI ads on Sunday. Think those Salesforce commercials with Matthew McConaughey. Girish Malapragada at Indiana University says even if the average super bowl watcher won't ever interact with a Salesforce AI agent. It's just that they want to tag along with some trendy thing going on in technology. There's also the question of whether companies will use AI to actually create their super bowl commercials in the first place. Van Graves at VCU's Brand center says that even with controversies over AI generated commercials, some marketing agencies will dare to experiment.

[Tom Close]

Don Draper's in our rearview mirror at this point. And this is a way to show that we are on the cutting edge of technology.

[Mark Finley]

Those super bowl commercials, remember, they're also commercials for Madison Avenue. I'm Matt Levin for Marketplace.

[Kai Rysdal]

Don't me, but I skipped the commercials in the Super Bowl.

[Sue Pasco]

Coming up, our insurance adjuster, when we were looking for a place to rent, said, you know, it's going to be a year and a half to two years at a minimum.

[Kai Rysdal]

The LA fires are over. The waiting obviously is not. First, though, let's do the numbers. Dow Industrials grew 134 points today, about 3. 10%. 44,556. The Nasdaq up 262 points. 1.4%. 19,654s and P 500, up 43.7 10%. 6,037. We were talking about oil earlier. Earlier. Hello, Kai. ExxonMobil released better than expected Q4 earnings and oil production grew 20%. Shares were up 2.7% today. Chevron, though, released lower than expected earnings and oil production stayed flat year over year. Shares nonetheless up 2.6%. The National Music Publishers association sent a notice to Spotify today to take down more than 2,500 unlicensed songs. Spotify turned it up 13.2% today, reporting its first profit ever. You are listening to Marketplace. Thanks to tax reform, American businesses have opened doors across our communities, investing in manufacturing workers and equipment, spurring millions of new jobs with higher wages and better training, and setting a new record high.

[Tom Close]

In corporate taxes paid to the US Government.

[Kai Rysdal]

America's businesses open doors, Tell Congress to keep the door of opportunity open. Protect and strengthen tax reform paid for by Business Roundtable. This is Marketplace. I'm Kai Rysdal. You'll be hearing the phrase debt limit or perhaps debt ceiling. They're interchangeable. You'll be hearing them increasingly over the next weeks and months as congressional Republicans decide what political demands they're going to make in return for lifting the amount the federal government can borrow. Fact is, the federal government does owe more than $36 trillion. Even in government spending terms. That is a lot. But to whom? All that money is owed well, it's quite a story. Here's Marketplace's Sabri Benishore.

[Tom Close]

Once upon a time in land here, there lived a Social Security system that wasn't broken. It even had a surplus during the.

[Kai Rysdal]

Years from about, oh, 1980s, 1990s, particularly.

[Tom Close]

When the baby boomers were in their.

[Kai Rysdal]

Peak earning years and hadn't yet retired, that surplus became a little bit larger than usual.

[Tom Close]

Eugene Sterle is co founder of the Brookings Tax Policy center and author of Beyond Zombie Reclaiming Fiscal Sanity in a Broken Congress. So decades ago, Social Security had this pile of extra money. By law, it could only do one thing with it.

[Kai Rysdal]

Social Security essentially bought government debt.

[Tom Close]

It lent its extra money to the rest of the government, which immediately spent it. But the government told Social Security, we'll pay you back when there's a rainy day and you need it.

[Kai Rysdal]

That's what's going on now in Social Security. Spending is exceeding revenues.

[Tom Close]

So the government is now paying Social Security back plus interest. This is intra governmental debt being repaid. Debt that one part of the government owes another part. There is a lot that has not been paid back yet.

[Justin Ho]

We have $36 trillion in total governmental debt. And about 20% of that, or, you know, more than 7 trillion of that is these intra governmental holdings or intra governmental debt.

[Tom Close]

Alex Arnon is director of Policy Analysis at the Penn Wharton Budget Model. This debt is special.

[Justin Ho]

They're not really debt or securities in the way that we typically think of.

[Tom Close]

These are non marketable securities.

[Justin Ho]

They cannot be bought and sold in the market like other debt.

[Tom Close]

And because this debt is not out in the wild being traded in bond markets, it doesn't do things that bond markets do. It doesn't affect the cost of borrowing. It doesn't affect the government's ability to borrow. It doesn't influence mortgage rates. Brad Setzer is a senior fellow at the Council on Foreign Relations. The intergovernmental debt is much more an accounting device. The real focus is on debt owed to the public. Stuff that actually has to be financed with treasury bonds or bills in the market. Out of the total $36 trillion the government's on the hook for, it owes 29 trillion to the public at large. Anyone or any organization that holds a government bond. Most of that is held domestically by various financial institutions, pension funds, banks hold a lot of it. It's considered, of course, a very safe asset. Dean Baker is senior economist at the center for Economic and Policy Research. Some of it's held by the Federal reserve board. About 15% of that's held by the Federal Reserve Board. The Fed bought a lot of US Government debt during COVID and the Great Recession as a way to help out the economy. This debt is considered part of that 29 trillion that's held by the public. But the Fed is holding less and less of that debt these days. 30% is held by foreigners. So this would be foreign banks, foreign insurance companies and foreign central banks. The share of debt the US Owes abroad has also been shrinking from just under half in 2011 to just under a third in 2023 as more US debt is consumed here. But the breakdown of the US national debt is less important than its size. What's a matter of concern is the overall fiscal sustainability of government. Lawrence Kotlikoff is a professor of economics at Boston University. The national debt is currently 20% larger than the size of the entire US economy, and he says it is on a growth path that is not sustainable. In New York, I'm Sabri Benishore for Marketplace.

[Kai Rysdal]

There's rain in the forecast for Los Angeles this week, which is good news for the fire weary among us. But even with things calm for now, those most affected by the Eaton and Palisades fires can't start rebuilding quite yet because there are countless truckloads of ash and debris that have to be carted away from all the properties that were damaged or destroyed. And as Marketplace's Kaylee Wells reports, that is a complicated process.

[Carl Banks]

Sue Pasco left her house in the Pacific Palisades with not much more than a change of clothes. She expected to be back home quickly.

[Sue Pasco]

We will go out tonight and we'll be back tomorrow. So you throw a few things in through the dog's dishes and, you know, just packed a couple pairs of underwear and that was it.

[Carl Banks]

Everything else she left behind after the smoke cleared. When she visited her property, she found a ceramic duck and a vase. The rest is ash. She says the very first thing that she and her neighbors need to do in this cleanup process is find acceptance.

[Sue Pasco]

People need to go in. They need the closure. They need to go in and say, okay, it is gone. There's nothing I've got here. I've got to get started.

[Carl Banks]

These homes burned nearly four weeks ago. But Pasco says some of her neighbors still haven't seen just how bad the damage is yet. She says just waiting in line to get into the neighborhood can take up to three hours.

[Sue Pasco]

You have to have the police check your ID and make sure you belong.

[Carl Banks]

Her husband had to do that twice to show the insurance adjuster their burned out property.

[Sue Pasco]

People Work, you know, they're taking time off for work to do this.

[Carl Banks]

The homes of Pasco and her neighbors are in phase one of FEMA's cleanup process, which is all about removing hazardous.

[Tom Close]

Waste, because this is a matter of protecting public safety in the environment.

[Carl Banks]

Carl Banks is deputy Incident commander at the U.S. environmental Protection Agency, which is leading this process of clearing hazardous stuff.

[Tom Close]

Such as batteries, cleansers, paints, oils, ammunition, that kind of thing.

[Carl Banks]

All told, the EPA is sending out more than 1,000 people in hazmat suits to comb through the wreckage by hand.

[Tom Close]

He says it's EPA's largest response in our history for a wildfire. The only thing that any of us who've been doing this for a couple decades now can compare this to is Katrina.

[Carl Banks]

As in the 2005 hurricane that destroyed much of the Gulf Coast, President Trump ordered the EPA to finish the process in 30 days. Banks says the agency is doing everything it can to follow those marching orders, but won't give an official end date. Once the EPA has given its blessing to enter a house, Phase two can begin.

[Tom Close]

Phase two is the general debris removal.

[Carl Banks]

Mark Pastrella is the director of LA County's Department of Public Works.

[Tom Close]

Our role is essentially as an administrator of the program.

[Carl Banks]

Phase two is all the stuff that is not hazardous. Dead trees and cracked house foundations and lots of ash. The Army Corps of Engineers is in charge of handling that part. It'll do the job free of charge, though it will take any insurance coverage you have for debris removal and you have to up through LA county.

[Tom Close]

We go on that property to do debris removal without your permission. We'd be trespassing. So in order to relieve that, we have a program called the Right of Entry program that property owners need to enroll in.

[Carl Banks]

To sign up. You have to fill out a 12 page form and send it into LA county by the end of March. You get to be higher up in the line if you convince your neighbors to fill it out fast too. Because the Army Corps is prioritizing blocks where it can do lots of properties at once and then you wait because Banks says the Army Corps expects phase two to take much longer.

[Tom Close]

80 to 90% of the properties will have their debris removed within a year or less.

[Carl Banks]

And that's just to turn the property into a blank slate. Fire victim Sue Pasco is expecting to live in her temporary apartment for a while after that.

[Sue Pasco]

Our insurance adjuster, when we were looking for a place to rent, said, you know, it's going to be a year and a, a half to two years at a minimum. If we're lucky.

[Carl Banks]

If we're lucky, you can get your property cleared faster. But in that case, you have to pay for it yourself. And the cost of that starts at around $10,000. In Los Angeles, I'm Kaylee Wells for Marketplace.

[Kai Rysdal]

This final note on the way out today, a math pop quiz. What do you get when you multiply 272 million times 50? 50 cents specifically? Well, you get first of all $136 million. But you also get Waffle House announcing today it's adding a 50 cent per egg surcharge on each of the aforementioned 272 million eggs it serves every year. It is bird flu induced mostly that shortage. Our Digital and On Demand team includes Kerry Barber, Jordan Manji, Dylan Mietanen, Janet Wynn, Olga Oxman, Ellen Rothfuss, Virginia K. Smith and Tony Wagner. Francesca Levy is the Executive Director of Digital and On Demand. And I'm Kai Rysdal. We will see you tomorrow. Everybody. This is APM.