Washington Insider -- Friday

Budget Talks Continue, Progress Slow

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

Sen. Boxer: RFS Ethanol Volumes Won't Be Reduced

Any legislative attempts to alter the Environmental Protection Agency's program to boost renewable fuel use will be blocked, vowed the Senate Environment and Public Works Committee's top Democrat.

Sen. Barbara Boxer, D-Calif., said during a Renewable Fuel Standard oversight hearing that she would block any bill that attempts to alter the RFS program because it would undercut the nation's efforts to reduce greenhouse gas emissions. "As I have said before, legislative changes to the RFS are not needed, and I will do everything in my power to stop any legislation to modify or undermine this landmark law," Boxer said.

Boxer chided the EPA for not doing more to advance biofuels in its recent RFS rulemaking. In November, the EPA issued a final rule for the year that kept multi-year mandates for commercial use of biofuels below the level set by Congress, but put the final numbers higher than the agency had proposed in May.

"We think the rule does what is supposed to -- increase the use of these fuels," Janet McCabe, EPA's acting assistant administrator for Office of Air and Radiation, said at the hearing.

According to Boxer, the EPA's mandates won't unleash the full potential of the biofuel industry, which claimed it could produce more fuel should the EPA institute higher standards.

Opponents of the program surfaced as expected during the hearing. "At the heart of today's discussion is the fact that it is time for Congress to revisit the RFS," said Environment and Public Works Chairman James Inhofe, R-Okla. Inhofe then added: "In fact, Congress must revisit the RFS by 2022 when the tables in the Clean Air Act end or U.S. fuel policy will be left in the hands of the EPA. I think we can all agree no one wants that to happen."

Inhofe alleged EPA mismanagement for failing to set the standard mandates in a timely manner. He also criticized the standard for its cost to consumers. "EPA's mismanagement is compounded by concerns that the compliance market is not working properly," Inhofe said. He added, "Oklahoma is full of gas stations advertising gasoline without ethanol, because that's what consumers want. Yet regardless of consumer demand, EPA is pushing increased ethanol blends -- like 15% and higher -- to levels that can corrode engines and void vehicle warranties."


GOP Lawmakers Ask OMB to Weigh In on WOTUS Social Media Situation

Lawmakers have asked the Office of Management and Budget to review findings that the Environmental Protection Agency's illegally used a social media campaign to promote its Waters of the U.S. rule.

Reps. Bill Shuster, R-Pa., and Bob Gibbs, R-Ohio asked OMB's Shaun Donovan if the finding of violation by the Government Accountability Office has been reported by EPA to President Barack Obama and Congress, as required by the Anti-Deficiency Act under which the violation occurred. The legislators want to know much money EPA spent on the social media campaign.

Rep. Shuster is chairman of the House Transportation and Infrastructure Committee, while Rep. Gibbs is chairman of the House Transportation and Infrastructure Subcommittee on Water Resources and the Environment. The second has oversight over the EPA Office of Water and the U.S. Army Corps of Engineers, which worked together to create the WOTUS rule. The letter is seeking a response from OMB within 30 days.

In a session with EPA Administrator Gina McCarthy before the House Ag Committee recently, several lawmakers asked the EPA chief about the matter. McCarthy acknowledged the GAO finding, but indicated it only related to the fact that when someone "re-tweeted" the item, there was no indication that it originated from EPA.

Several lawmakers on both sides of the political aisle were troubled by the finding, with Rep. David Scott, D-Ga., simply telling McCarthy, "You broke the law. Come clean." Repeatedly during that hearing, McCarthy simply told lawmakers she would "get back" to them on the WOTUS questions and several others.

As DTN has reported previously, The WOTUS rule remains one of the most controversial rules proposed by EPA and it is currently snarled in court actions. The matter has been stayed in court so the rule is not being implemented. Odds are high the matter will be dealt with in the courts as there has not been enough support in the Senate for legislation to alter or put the WOTUS rule on hold.


Washington Insider: Budget Talks Continue, Progress Slow

The nearly perpetual fight over the annual budget has taken second billing to the battle over the Scalia replacement on the Supreme Court, but much remains the same, according to media reports. To almost no one's surprise, the talks continue to drag and House Speaker Paul Ryan, R, Wis., said they "will require another week or two." Still, the Speaker thinks House Republicans will be able to produce a fiscal 2017 budget resolution, although he admits the window for agreement is continuing to narrow, Bloomberg BNA said.

After a party meeting Feb. 24, Ryan said Republicans claimed to be "still ahead of schedule compared to prior years" but that they likely will miss their earlier target of having the budget marked up and adopted in the House by March 3.

He continues to characterize the talks as he has before, as "the same kind of conversations with our members as we have every year." And, he is still noting that "we expect to continue those conversations in the next week or two to get a unified budget."

In spite of Ryan's optimism, Bloomberg BNA suggests that time is beginning to become a factor for Republican leaders who had hoped to use an early budget adoption as a springboard to an ambitious attempt to get all 12 appropriations bills enacted by Sept. 30. This would allow House appropriators to get started on those bills by early to mid-April. The Senate already has back-up language in place that would allow it to simply "deem" that a budget had been passed as early as April 15.

In the House, anti-spending sentiment among Freedom Caucus members, which has a bloc of members on the Budget Committee, remains strong. Budget Chairman Tom Price, R, Ga., offered a plan he hoped would placate the group's concerns by allowing for near-term savings in the mandatory spending programs that make up about two-thirds of annual outlays.

The House budget could include "reconciliation" instructions to support later legislation that would define specific cuts but that would depend on the Senate taking up a later bill, which could be vetoed by the president.

Another option would be to include mandatory spending savings within the appropriations bills, but that approach risks alienating appropriators, including Democrats who often provide the margin necessary for passage in the House.

Freedom Caucus member Rep. Mick Mulvaney R, S.C., said the group met Feb. 23 to discuss its options but little had changed since lawmakers left Washington Feb. 12. "Generally, the one thing we rallied to is that we are not voting for that top-line number, if that is what the budget is all about," he said. "If the budget becomes a discussion or something tangible on entitlement reform, then that's something we'd be willing to consider. But if the budget is an up-or-down vote on the higher spending level, then that is something we would not support," he said

Mulvaney also said the Senate debate over whether to consider a successor for U.S. Supreme Court Justice Antonin Scalia probably means the Senate will not get to appropriations bills that come from the House. "If the Senate is not going to take up the approps process anyway, why would we take their top-line number?" he asked.

House Democrats, who did not produce a budget in 2010, sought to increase political pressure on Republicans by calling for hearings on the President's budget after the House and Senate Budget Committees refused to have Shaun Donovan, director of the Office of Management and Budget, testify. "Perhaps, if they were to allow the administration's insights to be heard even in a single hearing, it might be easier to find common ground," House Democratic Whip Steny Hoyer D, Md., said in a statement.

So, the outlook for meaningful debates on important policy issues appears to be worsening in this election year, in spite of the number of important issues that face the Congress -- and, the number of those disputes with the potential to close the government appears to be growing, as well. Speaker Ryan appears determined to find a way forward to calmer waters, and he may be able to do that. Still, the potential for disruption appears unusually high with few developments on the horizon with the potential to improve that outlook. Clearly, the budget process deserves close attention from producers as it proceeds, Washington Insider believes.

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