The latest on ukraine. Michael mckee previews president obamas move to expand overtime pay. We begin with peter cook on capitol hill. And stanley fischers confirmation hearing. Good afternoon. Did he receive a warm welcome he did. Ho there is no doubt that he will be confirmed. By the full senate. Senators today particularly impressed with his resume. They have been since the president first nominated him. He is a legend in the economic circle. As centralears governor for the bank of israel and pressing senators appear on capitol hill. It is his resume that grew the most intense questions today. His time at citigroup. He spent three years with the bank on wall street and he was questioned about that by Elizabeth Warren. Of wallo big fan street. He defended his time at citigroup saying it made him a better central banker and regulator. Without that experience, i not have seen the inside of the bank. I thought that experience was extremely valuable. Toughestas about the moment for fischer. On the larger subject of Monetary Policy and the economy, fisher and the other two fed nominees up for consideration none of them signaled any significant shift in policy away from whats going on in the fed right now. The policies under janet yellin. Fisher said that the fed needs to keep moving forward in dealing with the issue of unemployment, saying the economy has now returned to a state of normalcy and as a result, expansionist Monetary Policy is still justified. Thtold senators he stresses at he understands the pain that americans are still feeling. Slow growth is not an abstraction. Its people not finding jobs. Slow growth is problems for families in meeting their food bill. ,f one does not understand that one should not be a policymaker. Acknowledge the debate over whether or not the taper should speed up. He did not express a preference for that. He survived pretty unscathed today. That one moment with Elizabeth Warren perhaps being his biggest test. He spoke about the other nominees. Any surprises there . No real surprises again from jay powell. One issue. E all three were asked if they would support the idea of higher bank capital charges on the biggest things in the country. An effort to address too big to fail. All three of them said they would be open to that if it is deemed necessary in the future. Not necessarily the message the big banks want to hear. Coming up on bottom line, diane swan. Before theed Senate Finance committee. She will join us from washington in just a few minutes to talk about that. And the fisher nomination. Write your own bottom line. Just minutes from now, president obama will announce he is directing the later Labor Department to change the nations rules on overtime. More workers would be eligible to earn overtime for putting in more than 40 hours week. How would that affect the economy echo lets ask Michael Mckee. Two issues at work here. The first is the president addressing the topic today. The fact that we are seeing an income divide. He will direct the Labor Department to change the nations overtime rules. First, you get overtime if you week. Nder 455 a below the poverty line. It has not been adjusted for inflation in years. There are exceptions for people who are considered supervisory or administrative personnel. The president wants to change both of those things. We dont know how many people are going to be affected because we dont know what levels he wants to set. The indications are we wont get specific labels. Best numbers we have dont tell us a whole lot. There are 23 Million People who get overtime once in a while. We dont know how often. They report working about 8. 1 day. A week a its not a whole lot. Gerrit bernstein suggests that perhaps 2,000,0003,000,000 people on a daily basis might see some increase in their overtime. Michael mckee. Thanks. We will have live coverage of president obamas remarks in the east room of the white house when they get underway. Following the president , we will have a roundtable discussion on the overtime rules. Andael mckee will be back. Ulianna goldman and dean baker thats coming up right here on bottom line. John kerry just finished testifying on capitol hill. The secretary of state warning that the u. S. And europe are ready to take very serious steps by monday if there was no sign of resolution to the crisis. How is the u. S. In increasing pressure on russia . Ifjohn kerry testified that his talks did not go well kerry is getting on a plane later today and flying to london and will be meeting tomorrow with his russian counterpart the idea is to find out what diplomatic measures food and is putin is willing to take. He did not express a lot of optimism and he said if not resolved, there could be very serious steps by the u. S. And europe. He is talking about our sanctions. Who hasan chancellor hesitated about sanctions against russia spoke very strongly today, warning there could be massive costs to russia diplomatically and economically if it does not get in line and behave like a 21st Century Power invading one of its neighbors. What sanctions are possible . Obamas executive order is incredibly sweeping in its scope. The question is, whether the wouldury department decide to act on that legal basis that has been set down. Think about how fair this could go. About half of russias Foreign Exchange reserves are held in u. S. Government bonds. Thats one tool right there. Another one is that Credit Card Networks are u. S. Owned and operated and this could technically be shut down as well. If youre talking about a situation where russia is holding about half of its funds that it has earned from gas exports in u. S. Dollars and if the credit cards were cut off, they would have to operate in cash, we could be talking about a serious banking crisis for merging markets. Nobody wants that. The u. S. Does not want to go that far. Theyre trying to find a safe way to get putin to step back. The ukrainian Prime Minister spoke in washington after his meeting with president obama. . T what did he have to say he was incredibly appreciative of all the support hes getting from the u. S. And european union. He expressed that ukraine is ready and willing to make the Economic Reforms necessary for an imf loan. He says the imf is not sweet candy. They are ready to put their little capital on the line Political Capital on the line. Jack lew said if the government does not take these reforms, it will be hard for the west to give that 1 billion Loan Guarantees. Crimea is a critical and integral part of ukraine. Ton if they vote on sunday separate and when russia, he wont be cutting off food, water and electricity to crimea. Congressionalthe aide . Theyre having problems with this. Actuallyow, kerry is still on capitol hill testifying before the House Foreign Affairs committee. Royce urged the senate publicly to vote on a clean bill that would just have a Loan Guarantee and not include changes to the quota funding for the imf. Something the senate has supported. We will have to see what happens with that further next week. After Congress Gets back. Thats right. They will be leaving town again. Thanks. Still ahead, confirmation hearings on capitol hill today. The top Federal Reserve officials. We will tell you what dr. Stanley fischer says about fed policy and whats ahead for the economy. Earlier this year, mobile management whetted appetite for a blend of casual dining entertainment by buying turkey cheese. Now it seems theyre hungry for more. The private equity side is winning a bid for dave and busters, and other chain that blends arcade games of food. Cheese. G chuck e 75 of the market. What are the benefits of owning the two companies . They do the same thing for different age groups. Chuck e cheese does not have booze. Dave and busters does. There are limiting costs. You could start with headquarters both are headquartered in dallas. You think about having one unified headquarters for both companies. Then you go into the actual operations and these guys are large buyers of food and games. There you might have some more leverage with your suppliers. This all comes down to cost cutting. Its all about business here. Absolutely. No fun. What is the real Growth Potential for both buddies . The growth of the industry revenues are going to accrue mainly to the benefit of these two companies because they control about 75 of the market. The industry revenues are projected to grow about 1. 7 this year. It is largely tied to the economic recovery in the fact that people have disposable income and are supposed to be going out. 1990s, people have migrated from these arcades to home game consoles and mobile games. So that has taken a big chunk out of the business for these companies. It has been tough they have to reinvent themselves. On the bright side, they are performing better than the other casual dining establishments out there. Which leads me to my next question. Even with the slow growth, these guys are outperforming much of the restaurant industry. Ruby tuesdays and run lobsters those guys are really hurting. Companies ar whats the lates this company is owned by private equity and they tried to sell it before and the process has not panned out. Now the numbers look better. There is consensus around the deal process that this is perhaps going to be successful. We should have a conclusion in the next 45 days or so. Christina, thanks so much. Forirmation hearings Federal Reserve nominees before the Senate Banking committee. Stanley fischer said to become fed vice chairman. He said easing still needed amid high unemployment. Ande is the chief columnist was on the hill this morning. She joins me now from washington. Welcome back. Good to be here. You talk about americas middle class when you spoke to the Senate Finance committee today. What is keeping americas middle class from expanding echo why are americans were working hard and paying their taxes still losing ground . Theres a lot of reasons. One of the things i focused most on is the stresses that we dont always see in the aggregate numbers on the middle class. The student debt and the number of underemployed young adults living with their families. Level generation families are at their highest since the 19 40s. Theyre compounding problems for families who on paper look like they are ok. They have taken on the additional stress of these other people in the household. Though Student Loans cannot be restructured. That means you diminish both the buyers and the essential growth. You and i have spoken before about whats needed to get this economy velocity to take it to the next level. In just a few moments, president obamas going to take executive action to guarantee more American Workers to get overtime pay. If wages remain stagnant and the overall threshold pay has not kept up with inflation, will the president s actions make a difference . Wont. Whattely, it we need is a stronger economy and simplicity. One of the messages today is inequality does not get help by more complex federal programs. We need more simplicity. At the end of the day, we need people to feel like theres a chance that they will be rewarded for the education and training they take on. We do have a mismatch of those people who should have gone to college and maybe should have entered training and could be making more money with less of a cost. What type of feedback did you get from lawmakers . It was supposed to be bipartisan and everybody had their partisan perspectives. It there is a sense of trying to do something right. They always tried. You have to have hope that they try. Will we accomplish anything soon . I dont have my hopes up. Lets which years a minute switch gears a minute. Testified this confirmation hearing on the hill today. Besides expertise and a Global Vision of the markets, what would dr. Fisher bring to this fed . Remarkable isly he is such a pragmatist. Not only a mentor to ben the head of the central Bank Janet Yellen knows him well. He is incredibly adept at challenging people without making them feel defenseless. Needatism is something you at the Federal Reserve. He is someone who thinks about how good is it the way we are communicating and how much we understand . He brings that level of pragmatism that we really need. The feds tapering policy has revealed how horrible it how vulnerable emerging markets can be. Will that reputation as a pragmatist be enough to convince his colleagues that emerging markets are just emerging and therefore are subject . Will be the voice to more people on that board. He will be able to say, listen, this is what the unintended consequences of our actions are. Are we willing to take it . He brings next her level of hedging by the fed and understanding by the fed of the consequences of their actions in this uncharted territory. Which is really important at this stage of the game. Ben bernanke he said policymakers needed a partner in washington on the hill. Talk to me about mr. Fischers political skills. Particularly at a time where the fed faces criticism. This is where he has a strength. Chair yellen in that he can convince people of what he is saying without offending them. He can be very sharp. Skill to haveical. Diane, its always a pleasure to have you on. Thank you so much. Look at we will take a the markets. The s p 500 falling more than one percent today. A racing games for the year. We will get you in on the markets update from julie hyman and waiting for that event with president obama. An executive order concerning overtime pay. Bottom line continues in just a moment. Welcome back to bottom line. You are looking at a live shot from the east room of the white house. We are waiting for president obama. Hes expected to enter the room and just moments. He will seek changes in overtime rules that will make millions of workers eligible for time and a half pay for the extra work. This will be a Campaign Issue during this Midterm Election campaign. The president intends to sign that president ial memorandum directing the label Labor Department to expand rules to employees who benefit from overtime pay. Those rules would be aimed at salary workers who make more than 455 a week. And those who are ineligible for overtime because they are designated as management, even shough their supervisor role are minimal. They could take more than a year to implement. The president has put the focus on increasing worker pay, including a call for congress to increase the federal minimum wage from 7. 25 an hour to 10. 10 an hour. The president is issuing an executive order requiring federal contractors to abide by the higher minimum wage. The president plans to direct the Labor Department to recommend new regulations that could increase the salary threshold for overtime. Ligibility the president s attention to overtime dovetails with his emphasis on correcting wage disparity. Something that has been in the middle of a fight between democrats and republicans on capitol hill. Some on the right have said that could be a job killer. However, those on the left saying that in order for people the middlento higher wages are a necessity. Live from the white house, the president of the united states. Have a seat. Thank you very much. Welcome to the white house. Before i get started, i want to knowledge somebody was worked so hard on behalf of americas workers each and every day. Our outstanding secretary of labor. [applause] tom brought some of his family with him. [laughter] weve got a lot of honored guests here. Weve got middleclass workers who rely on overtime pay. Weve got Business Owners who believe in treating their employees right. Because its the right thing to do and because its good business. Thanks to the hard work and resilience of americans like the ones were here today, our economy has been growing for a number of years now. Our businesses have created more than 8. 5 million jobs over the last four years. The Unemployment Rate is at the lowest it has been in over five years. Ways, the trends that have battered middleclass families for decades have gotten worse, not better. Those at the top are doing better than ever. Wagese average family, have barely budge. Too Many Americans are working harder and harder just to get by. We have to reverse those trends. We have to build an economy that works for everybody. Not just for a few. The basic restore notion of opportunity. That is at the heart of the american spirit. Opportunity for everyone. The belief that it does not matter where you started. Work hard willing to and act responsibly, you have a chance to get ahead. My state of the union at the beginning of the year, and laid out an opportunity agenda to give more americans a chance to succeed. It has four parts. Number one, making sure we are grading more good jobs that pay good wages. We aretwo, making sure training more americans with the skills that are needed to fill those roles. Number three, making sure every child in america gets a worldclass education. What ifour, which is will be focusing on today, making sure that our economy will reward the hard work of every american. Means women earn equal pay for equal work. [applause] it means giving women the chance to have a baby without sacrificing jobs or a day off to care for a sick child without worrying about making ends meet. Its making sure every american has access to Affordable Health care that is there when you need it. If there is some of you out there that you know that does not have health insurance, make sure they go on healthcare. Gov before march 31. [laughter] [applause] it means wages and paychecks that help to support a family. Profitable corporations like as a waye higher wages of reducing turnover and increasing productivity. Some of you saw me at the cap yesterday the gap yesterday. Sasha liked the sweaters i bought them. Heart of what i wanted to highlight is the fact that, on its own, the gap decided to give a raise to 64,000 employees across the country. I have called on congress to give america a raise by raising the minimum wage to 10. 10 an hour. [applause] this europe action, while congress decides what it will this europe, action, i will do what i cannot my own. I signed an executive order requiring federal contractors to ay their employees 10. 10 an hour. I will use my power to give americans a chance to earn the overpaid overtime pay they deserve. If you have to work more, you should get paid more. Its soant to know why important, just ask some of the folks here behind me. Works at an oil refinery in pennsylvania. [applause] for the last 16 years, nancy has been a single mom raising an educated for kids on her own and that is not easy. She has been able to do it thanks in part to her overtime pay. For more than 75 years, the 40 hour work week and the overtime that comes with it has helped countless workers like nancy get ahead. It means that when she is asked to make sacrifices on behalf of her company, which she is they recognize do, that it puts a strain on her forly and they reward her the adjustments she has to make. Its fair and the right thing to do. Americans arent getting the extra pay that they deserve. An exception that was meant for high paid whitecollar employees now covers workers earning as little as 23,000 a year. 23,000, youre not high and management. . Ight bac if you are salary as a dollar above the current threshold, you may not be guaranteed overtime. Matter if youre working 5060 hours a week. Your employer does not have to pay you a single extra time. I think thats wrong. It does not make sense that in some cases this rule actually makes it possible for salaried workers to be paid less than the minimum wage. Right when Business Owners who treat their employees fairly can be undercut by competitors who arent treating their toys right. Their employees right. You should be paid overtime. Eriod working americans have struggled through stagnant wages for too long. Every day, i get letters from folks who just feel like they are treading water. No matter how hard theyre working, theyre putting in long hours and working harder to get by. But its always at the end of the month, real tight. With melike the ones here today. They want to work hard. They dont expect a free lunch. They dont expect to be fabulously wealthy. A1 a chance to get ahead. Chance to get ahead. Im asking, perez to restore the commonsense principle of overtime. You should share a little bit in that success. This will make a real difference in the lives of millions of americans from managers and fast food and retail to office inspectorsrgo expec we will do this the right way as w work to simplify the system so its easier notployers everybody is going to be happy. Americans have spent too long working more and getting less in return. Can makeand whenever i sure our economy rewards hard work and responsibility and ,reats the workers fairly thats what i am going to do. Wants is aamerican paycheck that lets them support their families, experience economic security, past down some hope and not to miss him some hope and optimism for the kids. Will sign this memo. I want to thank everybody for being here. [applause] the president signing an executive memorandum to expand the overtime pay. The president saying, those at the top doing better than ever, but for the average family, wages have barely budged. We have to reverse those trends. We have to restore the basic notion of opportunity. There with the stroke of his pen, that memorandum has been signed. Lets go to the president s move. Michael mckee and Julianna Goldman joining us on the phone. Giuliana, let me start with you. What is the significance of this particularly during a Midterm Election year . Is pretty striking. It had all the trappings of a signing ceremony. One heart that feeds and the narrative of the heading into the 2014 midterms. Playing into the argument of making sure economics mobility and opportunity. Officials say this is one of the most significant steps in the socalled 10 and phone initiative or the europe action. The year of action. From the white house or at the agency level, building on the push to increase the minimum wage to 10. 10 an hour. Its part of the narrative with the starter retirement accounts. , Michael Mckee joins us discussing this issue. As you heard, i spoke to diane swonk. With these stagnant wages and other things pushing down on the middle class, is this executive memorandum really going to make only onence . The margins. It wont apply to people who are working parttime because what this really does is make more people eligible for overtime, not guarantee that they will get it. Is not guarantee that they will be working more hours. We dont really have good figures on, and people do. Are if you raise it to 1000, you might get 5,000,00010,000,000 people a year. Dean, thanks for your time. The president said overtime is a simple idea. If you have to work more, you should get paid more. What is the impact on Small Business . Its really hard to see that having too much impact. Were talking about people who are salaried. People in the weight range we are talking about, people earning between 10 an hour 20 an hour. These people are mostly paid by the hour. Aure talking about relatively small amount of workers. If theyre not paying overtime, theyre compensating in some way. He wont have a big impact on Small Businesses. Already some pushback. The lobby for Small Businesses released this statement. The president s plan to increase overtime pay demonstrates another antibusiness policy. Coming on the heels of a proposal to increase the minimum wage, increase the minimum tip wage, raising health care costs. What does this say about the pushback that is going to come from capitol hill . Its political. You look at the arithmetic in this. If you are paying somebody 15 an hour and you have that person work 48 hours a week, you have to pay them for those eight hours. If youre paying somebody 600 a week in salary, under current law, you dont. It was a mistake that was set up to be so that these people would be covered by overtime loss. Laws. Rtime is in politics more than dollars and cents for their members. Julianna goldman, we are getting pushback from the u. S. Chamber of commerce. I guess that was not unexpected. That was expected. Expected pushback from republicans on this. One white house official said earlier today, the challenge for republicans is going to be to say, what do they stand for . If they are not for increasing minimum wage and think that is too high because thats going to take away jobs, are they for decreasing it to three dollars an hour in order to boost jobs . What they are trying to get republicans to do here is to have an argument about income inequality, upward mobility and who has the benefits. In talking to respondents, one thing you heard a lot of from people is there no middle class in america anymore. People arent hopeful that lawmakers here in washington are working to help them get into the middle class. With the white house wants to say is, amid all this dysfunction, theyre taking action. Mckee, i will ge laid you get the last word. Talking about salaried workers. Its not going to raise the hourly pay for most people. It thats a much larger discussion that involves changes to the tax code. This is on the margins. It is symbolic, political act. Thank you all so much. Coming up, signs that the winter chill may be thawing. Retail sales rebound. Welcome back. This is bottom line on bloomberg television. Im Mark Crumpton. An encouraging sign on the strength of the u. S. Consumer today. Retail sales rose in february for the first time it in three months. The cofounder of cross Legend Investments joining me now. A pleasure to join you. Februarys retail numbers were a Welcome Change from januarys figure, which fell. 3 . That rebound in demand was ron based rated nine of the 13 major categories showed increases. Just how much pentup demand is there . It still remains to be seen. We were relieved that february was and down as december and january had been. Quite an easy comparison going believest. We still that there is quite a bit of pentup demand to be seen in the coming weeks. A number of retailers said that they saw thing start to pick up as the weather started to improve. We still had some storms. Mark has gotten off to a choppy start. The retailers work cautious. Where were the largest increases . The stories continue. It certainly online was the biggest gainer. Up over six percent. On a relative basis. Last year it was running at double digits. They saw a pullback as well. Building materials were up over 3 . People go and stock up on things like snow shovels and snowblowers for the storms come. Then there is the repair after the storm. They have benefited from this harsh weather. Wei du Home Furnishings continue to do so well . Do Home Furnishings continue to do so well . Its part of this home recovery crisis that we are seeing unfold. There is the wow factor in a. We saw strength throughout the back half of 2013. He saw existing home sales slow last month. It doesnt seem to be whether sensitive. We are waiting to see how this plays out. For now, household prices increased 13 . People are feeling better about their homes and they are going out and spending on their home. They had not prior to a year ago for some years. The 13 major categories showed increases. Where did we see declines . To gettronics continues the booby prize. Down two percent. Been an exciting new technology. We know that there has been a lot of pricing compression as people showroom the items and then buy at amazon. Were talking about februarys retail numbers. Any idea why the improvement in retail spending has not led to work in stores . Retailers cut 4100 jobs last month. It was a very difficult Holiday Season. We look at these numbers, they are tough. There is a bit of improvement. That just shows the top line. We dont know whats going on with margins. A lot of these Sales Numbers were professionally promotional he driven. Hence the lowering of estimates. Its the lowest backtoback month that we have seen going all the way back to 2010. Its the numbers look ok, still a very tough go for the retailers. I do think as we start to get through the Spring Season, not only do we have the pentup demand but last year, the comparisons looked much easier. It was a cold, wet start to the Spring Season last year. We should start to see some momentum. With that, hopefully some better times ahead. On a yearoveryear basis, the february retail number was up only 1. 3 . The trend for the previous six months was 2. 6 . Where are those headwinds coming from . Those numbers are really what is concerning. They are so below trend. Two. 6 . Months, if we look back over the last 18 months, we were seeing a long 4. 6 increases. You start to wonder, first we had the shortened Holiday Season and that caused a lot of thanks. Angst. T of then we had the winter storms. We see that sentiment has been picking up. Even the lower income consumer has been less pessimistic. We have seen Household Net Worth up in the last quarter. We have seen steady improvement on the employment front. The consumer is holding back. Either they have figured out something that we have not yet or you have to believe that the snowiest winter in 20 years really just brought a lot of havoc with it. Its always a pleasure to have you. Thanks for your time today. Thank you so much for having me. Another check on the market on the other side of the break. As we had a commercial, take a look at the boards. It the major indexes down over one percent across the board. Down 1. 5 . The dow jones now at a 220 point decline. Over p 500 is down just 1 . Stay with us. Get the latest headlines at the top of the hour on Bloomberg Radio and streaming on your tablet and on bloomberg. Com. That does it for this edition of bottom line. Im Mark Crumpton in new york. Pixel joining us. Thanks for joining us. Past the hour. Im julie hyman. Lets check on where stocks are trading right now. We do have a decline across the board. Down over0 is 1 . A bright spot today. Retail sales rose in february. In. 3 rise follows a drop january. Managing asked the director of Strategic Research group for his reaction to that retail sales report. That home shock is declined because that is the one strong sector consistently throughout this winter of 20 storms. Is that a positive sign . It is a positive sign when shoppers could not get to the Shopping Centers and malls. On the Sporting Good sign, a lot more people are going out skiing and snowboarding. And buying winter clothes. Reported spectacular sales. Buye have talked about best and jcpenney and sears. Im wondering if this now they beis for not hurting. It might be helping a bit because we seem to be seeing a resilient consumer. Is this correct . Its mixed. The resilient consumer if you have goods that Consumers Want to buy and can afford, they are doing well. Midtier, its. Brendan hoffman decided to not new its contract. Renew its contract. Hopefully jcpenney will turn around. Struggling is significantly. Frank blake and his team at home depot, best numbers in 14 years last year. What was interesting that saw a stock, it spiked because one analyst said, we see the beginning of a turnaround. Do you agree with parts of that . Too early to tell. Pennies is selling way too much private labels. Coles is coming back. It will be a big price for the season. Whoever has the best brands at the best rices. Hopefully jcpenney will be ok. Its too early to tell. The only piece we dont have is retailers for january. What are companies telling you about their stocks . Did they clear everything out in . Hristmas o echo the stocks were not cleared out in christmas or january or february. Thefirst winter storm in last 19 weeks, people will not be buying the cold weather apparel. Spring is starting late. We are still going to have colder Winter Weather and flooding in some parts of the country. That will hurt shoppers. The inventory build aside. We will continue to remain high. Not necessarily a sunny outlook for retail. We will be on the markets again in 30 minutes. Street smart is next. Rex hello, everyone. We have the dow and a big selloff mode there a triple digit loss from down 217. Markets shrugging off some of the retail data, more concerned about china. Cooling more than estimated and that has the markets concerned. Combine that with a lower growth target, it really hasoc