Washington Insider-- Tuesday

New Infrastructure Fight

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

Groups Urge Congress to Address Expiring Tax Extenders

The American Farm Bureau Federation (AFBF) and over 60 other business, energy and ag groups are urging Congress to extend a slew of tax provisions known as “tax extenders.”

The provisions include tax credits aimed at biofuel producers, like the biofuel production tax credit, and others for craft breweries and wineries, AFBF noted.

“Allowing these tax extenders to lapse at the end of 2020 would undermine their effectiveness, threaten thousands of jobs in the US economy and cause needless uncertainty for taxpayers at a time when many are coping with severe economic hardship,” the groups said in a letter to congressional leaders.

Taipei Protestors Decry Easing Of US Pork Import Restrictions

Thousands of gathered in Taiwan's capital Taipei on Sunday (November 22) to protest the government's decision to ease restrictions on US pork imports, the Central News Agency (CAN) reported.

About 20,000 people joined the annual Autumn Struggle labor demonstration in Taipei, the report cited the opposition Kuomintang (KMT) party as saying. A slew of labor-rights groups organized the protest, with support from KMT and the Taiwan People's Party, to put a focus on the US pork import issue.

KMT chairman Johnny Chiang invited President Tsai Ing-wen to a debate about the imports, CNA reported. KMT is seeking a referendum aimed at overturning the government's decision to allow imports of US pork produced using the growth promoter ractopamine.

Washington Insider: New Infrastructure Fight

Bloomberg is reporting this week that although union leaders and transportation advocates have looked to President-elect Joe Biden for possible action next year on a major infrastructure package, the prolonged election fight has weakened hopes for an early bipartisan breakthrough that could support a significant infusion of funding for bridges, highways and airports.

President Donald Trump had pushed hard earlier in his tenure to advance an infrastructure deal, something that had eluded Washington policy makers for years. However, those effort fell short as he and congressional leaders parted ways over how to pay for it.

Recently, advocates have been looking hard at the new administration's $2 trillion Build Back Better proposal for the U.S. economy that includes investment in schools, water systems, municipal transit and universal broadband. To move those proposals through Congress, though, would require extensive cooperation with Republicans, especially Majority Leader McConnell, R-Ky., who since May has spurned a comparably sized pandemic relief package pushed by Speaker Pelosi, D-Calif.

Now, with a one-year extension of highway funding to set to expire next year, union leaders and transportation advocates still see reason for hope. They note that President-elect Biden highlighted infrastructure in an economic summit Nov. 16 with business and union leaders via teleconference.

“We can also modernize infrastructure, roads, bridges, ports. 1.5 million new affordable housing units,” he said. In addition, he noted that most Americans favor additional investment in public works and pointed to a February 2020 poll conducted by The Pew Charitable Trusts that found 68% of US residents support increased federal infrastructure spending. The poll was conducted before the coronavirus pandemic damaged the US economy, however.

“Infrastructure is an issue where President-elect Joe Biden and Senator Mitch McConnell can find some common ground,” said Larry Willis, president of the AFL-CIO's Transportation Trades Department. “They should be able to do that.”

US Representative Peter DeFazio, an Oregon Democrat who chairs the US House Transportation and Infrastructure Committee, expressed optimism that Biden will push hard to keep his campaign commitment to rebuild the nation's infrastructure, even if McConnell is initially recalcitrant.

“The President-elect has made it clear he is ready to work with Congress to deliver results for all Americans with bold investments in infrastructure that help everyone, from large metro areas dealing with unreliable transit and soon to be jam-packed highways, to rural communities that suffer from bridges in poor condition and deteriorating roads,” DeFazio said.

Washington has been “mostly spinning its wheels on infrastructure spending under President Trump,” Bloomberg says. Early in his term, Trump proposed a $1 trillion replacement—funded mostly by private investment—but more recently that plan has been stuck in neutral.

A five-year, $305 billion transportation funding law was set to expire in 2020 but was extended until next year. The House passed a five-year, $494 billion surface transportation bill in July but the measure has not been approved by the Senate.

Now Biden promises on his transition website that his administration will “mobilize American ingenuity to build a modern infrastructure and an equitable, clean energy future.” If it comes to pass, it would be a far cry from repeated declarations of “infrastructure week” by the Trump White House that were quickly subsumed by unrelated events.

“We have to get past the point where infrastructure week is a running joke,” Willis said. “It's one of the backbones of our economy and it employs thousands of our members with good paying jobs.”

The U.S. Department of Transportation's Highway Trust Fund's balance has fallen 56.5% so far this year, according to the Federal Highway Administration. The highway fund, which is used to distribute money to states, is supported by the 18.4-cents-per-gallon federal gasoline tax.

“It's one of the few areas Republicans and Democrats should still be able to come together and agree on,” Jim Tymon, chief operating officer and director of policy and management for the American Association of State Highway and Transportation Officials, said during a post-election transportation policy forum.

Congress has turned to other areas of the federal budget in recent years to close the infrastructure funding gap, most recently transferring $70 billion to help cover five years' worth of transportation spending that will now run out in 2021.

John Porcari, a former US Deputy Secretary of Transportation in the Obama administration who advised the Biden campaign, said that he thinks there are “real prospects for a bipartisan, broad infrastructure package” in the early days of Biden's administration.

But the window for a bipartisan infrastructure compromise “is probably pretty short,” said Adrian Hemond, a Democratic strategist with the bipartisan Grassroots Midwest consulting firm in Michigan. “The first six months of the Biden administration are the best chance to get any legislation of consequence done,” he said. “There's an incentive for every incumbent facing a potentially competitive election in 2022 to have an accomplishment or two that they can run on back home.”

So, we will see. The need for investment in infrastructure is clear, and is largely bi-partisan. How it is handled early in the next administration is widely regarded as a bellwether for possible cooperative effort in the coming months and should be watched closely by producers as these issues emerge, Washington Insider believes.

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