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.

114th Congress to be Sworn in Today

The House meets today at noon for the formal swearing-in of members who are about to undertake a grueling 34-week session of mostly three- and four-day weeks. According to the calendar released by House Majority Leader Kevin McCarthy, R-Calif., votes will be held four days a week in many cases, with some shorter weeks to accommodate policy retreats and holidays.

By all accounts, House Republicans, who now have a larger majority, appear eager to compile a better legislative record than the previous Congress, although that will not take much to accomplish. The chamber is scheduled to be in session for six consecutive weeks until the first "District Work Week" beginning on Presidents' Day, Monday, Feb. 16. (By contrast, the longest consecutive D.C. work streak accomplished by the previous Congress was four weeks in July 2014.)

According to McCarthy's office: "This calendar ensures that 'the People's House' always remains in-touch with those back home. Our schedule will continue to provide Members considerable time for constituent services in their districts each month."

The expectation is that with their new 247-188 majority, House Republicans will approve more bills of a controversial nature, knowing that their proposals will receive a more sympathetic reception in a Senate that is now split 54-44-2 in favor of Republicans.

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Congressional Democrats Urge Republicans to Reject 'Dynamic Scoring'

Congressional Democrats are calling on Republican leaders to reject calls by some members to appoint a new Congressional Budget Office director who will adopt the controversial "dynamic scoring" method of determining the costs associated with legislative actions.

In a letter to GOP leaders, a group of Senate Democrats say that dynamic scoring, which allows CBO to estimate the economic effects of bills signed into law, would unnecessarily politicize the office. Now that Republicans can replace current CBO Director Doug Elmendorf with a person of their choosing, there is concern about "the possible appointment of a new CBO director who would use 'dynamic scoring' to hide the true costs of tax cuts or make critical government lending programs for students, veterans, small businesses, and others appear more costly than they actually are," the Democrats' letter says.

"Appointing a new CBO director on the basis of ideology would fundamentally compromise the integrity of an institution that has served as a trusted scorekeeper," said the letter, whose signers include several members of the tax-writing Finance Committee: Sens. Chuck Schumer, D-N.Y., Debbie Stabenow, D-Mich., and Mark Warner, D-Va.

Republican leaders can be counted upon to give the views of their Democratic colleagues careful consideration before moving to bring in a new CBO director whose views more closely align with their own.

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Washington Insider: Beef Import Competition

U.S. beef prices rose to a record high last year following severe droughts and high feed prices that forced many producers to cut their herds to the lowest level since 1951, USDA says. Now, increasingly attractive prices are leading U.S. producers to invest once again, but also are attracting notice from international competitors.

This includes Argentina. USDA recently examined sanitation practices there and says that nation has the ability to detect and eradicate foot-and-mouth disease — a highly contagious threat to cattle, hogs and sheep. As a result, USDA is proposing that chilled or frozen beef from northern Argentina be allowed into the United States.

USDA's Animal and Plant Health Inspection Service visited and reviewed Argentina's control and eradication efforts in five recent years and last fall requested public comment on the proposal. In response, a number of U.S. livestock producers and some agriculture groups said they are not satisfied. They note especially the Argentine delay in reporting a 2001 foot-and-mouth outbreak and a World Organization for Animal Health report that criticized Argentina's handling of a 2006 outbreak of the disease. Many commenters want the proposal withdrawn, and others would await a Government Accountability Office report on the USDA review.

Foot-and-mouth disease is especially contagious and is found in surrounding regions in Latin America and could accidentally move to the United States via imports, producer groups argue. The last outbreak of foot-and-mouth disease in the United States was reported in 1929.

The American Farm Bureau Federation gave qualified support to USDA's proposal but urges that precautions be taken. It estimates that an outbreak could potentially cost U.S. agriculture as much as $128 billion in destroyed herds and lost animal feed sales for corn and soybean farmers. It would limit imports of Argentine beef to meat plants with food safety standards equivalent to those in the United States and require U.S. re-inspections before meat enters the United States.

In the efforts to make beef sales in the United States, Argentine producers used an argument that U.S. producers frequently make when other countries cite health concerns about imports: that trade sanitary-phytosanitary decisions be based on science. Argentine producers noted that their meats are exported to 50 international markets, including the European Union, that they have addressed past shortcomings and that the USDA proposal is based on science and international trade health and sanitary standards.

U.S. beef prices are attracting interest from another potential exporter, Ireland. This is occurring as USDA has decided to lift a ban on imports from that country more than 15 years after mad cow disease spurred restrictions on beef supplies from Europe.

Ireland's Agriculture Ministry claims that it is the first European Union country to regain access to the United States, the world's largest beef importer. Ireland is the EU's sixth-biggest beef producer and ranks third for exports according to Eurostat data.

"This U.S. market is a huge prize, given the size of the market and the demand we know exists there for premium grass-fed beef," the ministry said. "We now have first-mover advantage as a result of being the first EU member state to gain entry."

The United States imported about 2.4 billion pounds of beef and veal in the first 10 months of 2014, approximately 25 percent more than the same period the year before, USDA says. Australia was the biggest supplier, followed by New Zealand and Canada.

The United States is a traditional beef importer, in spite of its large domestic production and its worldwide export markets. It has been especially careful to protect against highly contagious animal diseases and has aggressively promoted sales in nations that were quick to ban U.S. products after the 2003 mad cow outbreak.

Thus, it is once again important for the United States to emphasize its reliance on careful sanitation measures –– fully backed by science –– while at the same time opening its markets to safe and competitive imports, Washington Insider believes.

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(GH/CZ)

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