Washington Insider-- Friday

DTN's Washington Insider

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

EPA's Regan Commits He Will Not Go Back To Obama-Era WOTUS Rule

The Biden administration is seeking to tackle the issue of Clean Water Act regulations by "learning from the lessons of the past," EPA administrator Michael Regan told members of the House Appropriations Interior-Environment Subcommittee.

Specifically on the issue of the Waters of the U.S. (WOTUS) rule from the Obama administration and the Trump administration rule, Regan said, "We don't have any intention of going back to the original Obama Waters of the U.S. verbatim, and we don't necessarily agree with everything that was in the Trump administration's version as well. We've learned lessons from both. We've seen complexities in both, and we've determined that both rules did not necessarily listen to the will of the people."

He said that he and USDA Secretary Tom Vilsack are "attached at the hip" on the issue and Regan said he has had discussions with agriculture company officials about WOTUS since he has been at EPA.

"I'm interested in moving forward, not in a ping-pong way, but a way that we can provide some certainty to the ag industry, where we don't overburden the small farmer but we also balance the protection of our wetlands and our sounds and estuaries," Regan said.

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Senators Again Push EPA To Restore The 'Integrity' Of The RFS

EPA is being called on to set the 2021 and 2022 Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard (RFS) to require "conventional renewable fuel volumes of at least 15 billion gallons per year, as required by statute, along with the court-ordered 500 million gallons illegally waived from 2016 standards and increase biodiesel, advanced, and cellulosic volumes."

The lawmakers told EPA Administrator Michael Regan that "restoring the integrity of the RFS and expanding market opportunities for renewable fuels should remain a core part of our plans to assist in the economic recovery of rural America and further reduce emissions from the transportation sector." The lawmakers also called on EPA to update their modeling on greenhouse gas (GHG) emissions reductions.

The lawmakers also took issue with those refiners indicating they cannot comply with the RFS for 2021, noting the extension of the compliance deadlines for 2019 and 2020 and pointing out that action is in addition to the prior administration granting small refinery exemptions (SREs) that "undercut renewable fuels."

They also sought to counter arguments that high prices for Renewable Identification Numbers (RINs) are threatening the viability of refiners, pointing out that there are many ways refiners can show compliance with the RFS. They called on EPA to "reject requests" to waive or reduce RVOs and continue the commitment to "support farmers and rural communities by upholding and restoring confidence in the RFS."

The letter was signed by 12 bipartisan Midwest Senators, including Chuck Grassley, R-Iowa, Amy Klobuchar, D-Minn., Debbie Stabenow, D-Mich., and others.

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Washington Insider: Investment Fights and How to Pay

Bloomberg is reporting this week that key Senate Republicans are already planning to participate in a revived system of earmarking congressional funds for local projects although their conference left in place a non-enforceable ban on the practice.

The conference kept its non-binding ban on earmarks in its Wednesday meeting on caucus rules, members said. Democrats have said they plan to bring back a limited version of earmarks, which hadn't been used in a decade. Now, it appears that at least some Senate Republicans are planning to join in the process, as well.

Senate Appropriations Vice Chairman Richard Shelby, R-Ala., said it'll be up to individual members to decide if they want to participate. He said he was confident that "the new system of earmarks won't get the bad reputation it had before it was banned in 2011."

"If you don't want an earmark don't ask for one," Shelby said of this week's decision. "Even if you ask for one, you might not get one, because the old earmark days, they're gone. They're going to have to be meritorious, they're going to have to be substantive in nature, and meaningful for us to really even consider it."

Sen. Shelley Moore Capito, R-W.Va., ranking member of the Senate Environment and Public Works Committee and of the Senate Appropriations Homeland Security Subcommittee said she'll consider possible earmarks. "I'm going to look seriously at earmarking," she told reporters. "If I can make my voice heard and be specific on it, and mindful of the transparency, I don't have a problem with it."

Sen. Susan Collins, R-Maine, ranking member of the Senate Appropriations Transportation-HUD Subcommittee, also told reporters she plans to submit earmark requests.

Members expected to vote on a proposal to remove the conference's ban on earmarks but didn't complete that vote on Wednesday, instead opting to leave the "symbolic ban" in place and let members decide for themselves how to legislate.

"I certainly hope that every member of the Republican conference complies with what the conference rules say," Sen. Ted Cruz, R-Texas, an earmark critic, told reporters. "Can a member choose to act differently? Sure."

In the meantime, Senate Republicans say they are working on an infrastructure counteroffer in an effort by conservatives to push the Biden administration to narrow the scope of its package and pay for it with user fees rather than a corporate tax hike.

Republicans have discussed a ballpark figure of $600 billion to $800 billion, rather than the $2.25 trillion proposal by Biden. They've also pushed back on Biden's call for an increase in the corporate tax rate from 21% to 28% as they push to have their bill paid for with user fees.

The anticipated announcement is closer to the beginning of negotiations than the end, Bloomberg opines. Capito, who has led the effort to assemble a Republican counteroffer, said it's "an opening bid" in discussions with the White House. "This is an honest bid and a negotiation," she told reporters on Wednesday. "And I just want them to know that we want to be at the table."

Capito will join Commerce, Science, and Transportation ranking member Roger Wicker, R-Miss., Energy and Natural Resources ranking member John Barrasso, R-Wyo., and Banking, Housing, and Urban Affairs ranking member Pat Toomey, R-Pa., to announce the plan at a coming press conference, likely before the end of this week.

Wicker called the new proposal "a very viable plan," in his remarks to reporters.

Plans to pay for the spending are continuing to be a major divide between Republicans and Democrats. President Biden has said the bill's costs must be offset and proposed a corporate tax hike for upper bracket taxpayers to achieve that. Republicans argue that is a nonstarter.

"We're not interested in raising taxes," Capito told reporters. "We think that people that use our infrastructure are a lot of the solution. There's a lot of private money out there."

Bloomberg also noted that advocacy groups from states across the U.S. are urging Congress to "evenly" fund transit and highways in the next surface transportation reauthorization bill. The effort, convened by the National Campaign for Transit Justice, is expected to kick off today with letters sent to federal lawmakers from at least 13 states.

In additional budget discussions, the White House told lawmakers the administration's goal is to send a full budget proposal for fiscal 2022 by Memorial Day, May 31, House Budget Chair John Yarmuth, D-Ky., told reporters Wednesday. That will help kick off a late start to the congressional budget process, he said.

Yarmuth noted that lawmakers are doing preliminary work on a budget resolution, but thinks it will be June by the time the budget portion of the process is finished "because of delays on the White House's end."

Members have discussed simply deeming a budget outline to allow appropriators to start their work, Yarmuth said. "Deeming" a resolution sets the top-line spending figures without going through the full process of adopting a budget resolution.

So, we will see. It is clear that solutions to the question of how to pay for new federal investments will continue to be a hard, nearly impossible sticking point. Whether or not the administration can rely sufficiently on targeted, high bracket taxpayers and avoid new taxes for the middle class will be increasingly important; an issue producers should watch closely as these investment debates intensify, Washington Insider believes.

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