Washington Insider -- Tuesday

By DTN's Washington Insider

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Cotton, Dairy Provisions Left Out of Omnibus Spending Plan

Cotton and dairy farm bill changes did not make it into the Fiscal 2017 budget deal. Instead, included in a list of congressional directives accompanying the spending deal is a request that the USDA Secretary within 60 days issue a report on administrative options for providing financial relief to cotton growers, and also offer immediate assistance to dairy producers.

Negotiations over how to change a margin insurance program for dairy producers extended into the weekend, but there were differences among Democrats from dairy states. Also, farm-state lawmakers were hoping for language that would designate cottonseed as an “other oilseed” so it could qualify for the commodity safety net programs, but especially the Price Loss Coverage (PLC) program.

Reason for the cotton and dairy language omission, sources say, is a disagreement with dairy-state lawmaker Sen. Patrick Leahy. D-Vt. Rep. Collin Peterson, D-Minn., had worked out a dairy plan with House Ag Chairman Mike Conaway, R-Texas, which was paid for, but Leahy did not go along. Peterson supported the cotton program changes pushed by Conaway and others. Sources say this does not bode well for the new farm bill debate ahead.

National Cotton Council (NCC) Chairman Ronnie Lee said the NCC “is extremely disappointed that the Fiscal Year 2017 omnibus appropriations bill does not include the cottonseed policy developed by the U.S. cotton industry in consultation with Congress.”

Another rider that appears to be missing is one that would block USDA from enforcing rules under its Grain Inspection, Packers and Stockyards Administration, which are designed to protect chicken growers in their contracts with processors. The department has already has put off enforcing an interim final rule until October while it takes more comments, while two other regulations are in the initial stages of rulemaking.

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Importing Lemons From Northwest Argentina

USDA will not extend the stay on the final regulation on imports of commercial fresh lemans from northwest Argentina beyond the current date of May 26, 2017, according to USDA's Animal and Plant Health Inspection Service (APHIS).

USDA will now work with Argentina’s National Food Safety and Quality Service (SENASA) to finalize the operational work plan described in the final regulation. For 2017 and 2018, Argentine lemons would be imported only into the northeastern United States.

USDA noted "numerous requirements must first be met before the lemons can enter the United States" and no imports would be allowed "until all requirements are met."

This comes as lemon producers were about to embark on two days in Washington trying to convince lawmakers and others keep the prevention on the imports in place. Lawmakers inserted a provision into the Fiscal 2017 spending plan that would bar USDA from implementing the rule until Argentina demonstrates it can meet the same standards as other countries sending fruits into the U.S.

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Washington Insider: Bipartisan Spending Deal Reported

U.S. House and Senate negotiators reached a bipartisan deal on a $1.1 trillion spending bill that will keep the government open through September 30. Because the bill required Democratic votes for passage, it now reflects a lot of their priorities, Bloomberg reports.

The measure still requires a couple of steps. However, final votes are expected soon, and President Donald Trump is expected to sign it into law.

Bloomberg says that GOP leaders looking forward to focusing on health care and tax overhaul issues bowed to Democratic demands to eliminate numerous policy restrictions aimed at curbing regulations “leaving the administration with few victories.” This included the White House push for funding to begin building the border wall, as well as $18 billion in cuts to domestic agencies.

In addition, the deal includes money for Planned Parenthood, despite Republican demands to defund the group, Bloomberg says.

The President will be able to point to a $15 billion boost for the Pentagon, although $2.5 billion of that money is contingent on the administration delivering a new plan to fight the Islamic State. It also falls well short of the $30 billion he had originally requested.

The bill includes $1.5 billion for border security, but those funds can’t be used for the border wall or additional Immigration and Customs Enforcement agents, Bloomberg says. In addition, it contains no new restrictions on money going to so-called sanctuary cities.

While Republicans failed to get many of their proposed provisions in the bill they are taking the position that “spending riders have become a less important tool for the party because the Trump administration is already intent on rolling back regulations they dislike and can take many actions on its own.”

“It is a solid bill that reflects our common values and that will help move our nation forward, and I urge its quick approval by the Congress and the White House,” House Appropriations Chairman Rodney Frelinghuysen, R-N.J., said in a statement early Monday.

He pointed out that provisions were included to extend miners’ health benefits and boost health research and opioid addiction treatment and prevention. And, Environmental Protection Agency, which President Trump has sought to shrink dramatically, would receive a 1% reduction of $81 million in funding and no staff cuts.

Bloomberg says the omnibus also includes authority for the secretary of Homeland Security to temporarily increase the cap in H-2B visas for temporary labor through the end of September -- a provision sought by senators in both parties. It does not, however, change the quorum for the Export-Import Bank needed to approve deals over $10 million, so a major backlog will continue until administration nominees are confirmed.

Notably, agencies the administration sought to eliminate, like the National Endowment for the Arts and the National Endowment for the Humanities and the Appalachian Regional Commission, would get modest increases in funding, along with a 2% increase for national parks — as well as nearly $40 million in new funding to address deferred maintenance and construction needs, Bloomberg says.

The deal would provide a permanent $1.3 billion extension of health-care benefits for coal miners, to be offset by a boost in customs fees. The provision was backed by coal-state lawmakers in both chambers.

In the House, passing a spending bill for the remainder of Fiscal 2017 was always seen to be a challenge since a solid bloc of fiscal conservatives regularly oppose big spending bills. Sixteen House Republicans on Friday voted against the one-week extension of current spending that kept government open.

The spending bill package would finish the job of appropriating agency spending seven months after the fiscal year began, a drawn-out fight that could have been avoided in December had the incoming administration not instructed Congress to hold off on passing a bipartisan spending measure in order to give it a chance to weigh in. Bloomberg says.

A stronger chance for a government shutdown could come in October. The President has sought $54 billion in defense increases paired with $54 billion in domestic cuts. Congress and the president also will need to agree on a debt ceiling increase in the fall and White House budget director Mick Mulvaney has said he wants to use the debt ceiling to impose new spending restraints.

So, the almost perpetual fight over spending continues, in spite of a brief bipartisan moment. Looking forward, while the Congress and administration have had kind words for beleaguered cotton and dairy sectors in recent days, growing budget hawk scrutiny certainly could pose new challenges for any new farm bill proposals, as well as tax and trade policies that affect the sector and which should be watched closely, Washington Insider believes.

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