Are federal cuts threatening food safety?
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We'll update markets and the Middle East. I'm David Brancaccio in Los Angeles. In early trading here, stock indexes are mixed, but the movements are tentative given the U.S. bombing of Iran's nuclear facilities this weekend. The Dow is up now 78 points, two-tenths percent. The S&P is up three-tenths percent. Now the Nasdaq is up by a tenth percent.

Crude oil up just slightly, three-tenths of a percent using the New York price now, $73.50 a barrel. Iran's state-run Press TV reported that...

Parliament had approved a plan to close the Strait of Hormuz. U.S. Secretary of State Marco Rubio has called on Iran's ally China to try to prevent this. I spoke to Fernando Valle this morning. He's managing director of energy for the investment firm Hedgeye Risk Management. Welcome. Good morning. I have it on my screen here. But when you look at the price of crude oil traded in New York this morning, what does that price tell you?

There's no real belief around the market that the Strait of Hormuz is going to be closed. Otherwise, oil would be significantly higher.

There's a fear that at least the shipments are going to take longer. They could be more costly to insure. But there's no real belief that the Strait of Hormuz itself is going to be closed. What accounts for that? I mean, we're consulting experts who say it is a possibility that the Iranians could do that. They don't necessarily have to, but they might have the capability to do so. So why are the oil traders so chill on that point?

I think the reason is it's A, very difficult to close, but B, it would be very costly to Iran itself. Most of its exports are going through the Strait of Hormuz itself, and it's not going to be closed on just one side. You'd expect that rivals and opponents of Iran, us, Israel, others, would be very contentious to Iran closing the Strait of Hormuz. And you would

Meaning that the 1.3 to 1.4 million barrels a day of oil that go through Karg Island in Iran cannot get it out of the Strait. And that's essentially the lifeblood of the Iranian economy. And on top of that, China, which has been one of its bigger supporters, gets over 5.5 to 6 million barrels a day of crude through the Strait of Hormuz.

Fernando Valle, he's Managing Director of Energy at Hedgeye Risk Management. Always good to catch up. My pleasure. Thanks for having me.

The U.S. Senate has a lot of work to do this week on the big tax and spending bill, which is facing some setbacks despite a self-imposed deadline of the 4th of July. Marketplace's Nancy Marshall-Genzer has that. The Senate parliamentarian has ruled that some parts of the huge tax and spending bill violate the rules for reconciliation, which allows legislation to pass with a simple majority vote. Reconciliation only applies

applies to measures that affect the federal budget. Senate Democrats say the parliamentarian ruled that some provisions in the bill don't meet that test, like a requirement that anyone suing to block Trump administration policies must post a large bond first to cover the government's expenses if it loses. A provision requiring states to shoulder some of the costs of SNAP also failed the test, as did another part that would have cut off funding for the Consumer Financial Protection Bureau.

I'm Nancy Marshall-Genzer for Marketplace.

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Now to federal budget cuts and public health. For instance, last week there was a listeria outbreak linked to ready-to-eat pasta meals sold at Walmart and Kroger. Three people died and many more were hospitalized. Now there were foodborne illness outbreaks before Doge government efficiency cuts, but experts worry about further weakening of America's food safety system. Marketplace's Kimberly Adams reports.

The biggest effect so far, says Barbara Kowalczyk at the Institute for Food Safety and Nutrition Security at George Washington University, has been on the information side of things, especially at the Food and Drug Administration. It's important that you communicate well with both the industry as well as with consumers and other public health agencies such as CDC.

Some of the major doge cuts targeted administrative and communications staff at food safety agencies, just the folks you might need to track down and disseminate information about an outbreak. Sandra Eskin is with the advocacy group Stop Foodborne Illness.

The whole infrastructure of food safety oversight, surveillance, what's happening, outbreak when there's a problem responding, and then trying to put in place policies to improve food safety has demonstrated

has definitely been impacted. But all the experts I spoke to say you can't say at this point that the Trump administration's job cuts or funding changes have actually harmed food safety. Many fired or laid off staff at food safety agencies have been reinstated either by administration officials' choice or because of court orders. Sarah Sorcher is with the Center for Science in the Public Interest.

While the workers who carry out the scientific and legal work have largely now been brought back to FDA, which should mean that programs like food testing, quality control can be resumed, etc., many workers have simply opted to retire or take work elsewhere. She says that means the FDA is still about 20 percent understaffed across the board. Plus, food safety funding and staffing at the federal level has been an issue for years.

including major cuts to funding for state food safety programs under the Biden administration. And those cuts, says Stephen Mondernach at the Association of Food and Drug Officials, did far more harm than Doge. When you look at produce, 93 percent of the inspections are completed by state folks. When you look at milk,

Great A-mil and shellfish, 100% of the work is done by state folks. Mondernach and other experts say no one outbreak can really give you a sense of how the food safety network is holding up. Better technology means we're catching outbreaks sooner. But, says Don Schaffner, a food microbiologist at Rutgers,

In general, you know, if we invest less in food safety, I think eventually we'll have less safe food. And that's the case regardless of who's in the White House. In Washington, I'm Kimberly Adams for Marketplace.

And Novo Nordisk, maker of a top weight loss drug Wagovi, is cutting off online telehealth retailer Hims and Hers after just over a month of partnership. The pharma company accuses Hims and Hers of continuing to sell versions that it says are against the law. The knockoffs, compounded versions they're called, were

were restricted after Wigovi was no longer deemed in short supply. LifeMD and others will still sell Wigovi. All of this has had a slimming effect on hims and hers stock, down 27 percent now. In Los Angeles, I'm David Brancaccio, Marketplace Morning Report from APM American Public Media.

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