Washington Insider -- Wednesday

Dueling Budget Strategies on Capitol Hill

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

Ag Panel Leaders Talk Farm Bill, GMO Labeling

Chairmen of the House and Senate Ag Committees talked about major farm and food policy matters during a Bloomberg Government event in Washington.

Senate Ag Chairman Pat Roberts, R-Kan., revealed he will be meeting today and tomorrow with top panel Democrat Debbie Stabenow of Michigan, to try to "settle our differences" on labeling food made from genetically modified organisms. "We have to get it fixed," though most major companies are prepared to abide by the Vermont law that takes effect July 1 if a solution is not reached, Roberts noted.

House Agriculture Chairman Mike Conaway, R-Texas, said he is "frustrated" with Stabenow's lack of movement, and that he is sticking with the House position on the topic until she puts something on paper he can negotiate with. Even with a Senate compromise, Conaway said that he stands by his voluntary-only labeling law, passed in the House in 2015. "The House has a bill, and we'd be perfectly fine if the Senate passed it as is and sent it to the president," Conaway said.

Regarding the next farm bill, Conaway said, "What does it do to the cost of food" will determine which issues he addresses in the next omnibus farm bill.

Roberts said the current farm bill is still being implemented and "a lot of hearings" will be held next year in preparation for crafting the next one.

EPA Memo: Refiner Costs for Biofuel/RFS Requirements Are Minimal

A cost-to-sales test by the Environmental Protection Agency (EPA) indicated that all obligated parties, including the "14 small refiners, would be affected at less than 1% of their sales" to comply with proposed 2017 Renewable Fuel Standard (RFS) targets, Dallas Burkholder and Tia Sutton of EPA's transportation & air quality office said in a memo dated May 2016.

Further, the EPA memo noted:

EPA said that refiners are recovering costs through higher sale prices of petroleum products

American Petroleum Institute, among oil trade groups, called for repeal or reduction of Renewable Fuel Standard, citing compliance costs

EPA analyzed costs of Renewable Identification Numbers (RINs), prices for gasoline, ethanol made from both corn and sugar cane, soybean-oil based biodiesel and petroleum, the memo said.

Washington Insider: Dueling Budget Strategies on Capitol Hill

The national press is keeping a sharp eye on the congressional majority's strategy for next year's budget, it says, and notes that Senate Majority Leader Mitch McConnell, R-Ky., is "betting control of the upper chamber on the argument that Republicans know how to govern." McConnell continues to claims that order has now been restored in the Senate, so he can bash Democrats' dysfunction during the reign of former Majority Leader Harry Reid, D-Nev."

However, things are different in the House. One of Speaker Paul Ryan's, R-Wis., top priorities is to give rank-and-file members more input into the legislative process and avoid the fate that cost former Speaker John Boehner his job last year when he tangled with a group of dissident conservatives.

Passing spending bills under regular order in the Senate will have less appeal with voters if they "only pile up into a year-end wreck" that requires summit talks with President Obama and House leaders to sort out, a development some Republicans see increasingly likely, The Hill says.

That leaves the House leadership with a close call. The Speaker has said all the right things and given his membership an opportunity to vote on fairly open rules, but if they're not going to respond by passing these bills he's going to have to tighten up the rules. "It's a tough decision to make, but it's a decision that can be made," Jim Dyer, who served 13 years as the Republican staff director and clerk of the House Appropriations Committee, told The Hill.

McConnell, who is seeking to protect his fragile majority in November, has made his call, the Hill Says. He wants to run the government and avoid any talk of a shutdown even if that means holding red meat back from conservatives.

Ryan wants to get things done but has not yet gone so far as to put his colleagues on a tighter leash to make bills easier to pass. Unlike McConnell, Ryan has a large majority that is unlikely to flip this fall. But controversial bills in the House, especially funding bills, usually need Democratic votes to pass.

McConnell and Senate Appropriations Committee Chairman Thad Cochran, R-Miss., have been careful to keep poison-pill riders off their spending bills and eight have passed the committees unanimously, pushing the Senate well ahead of the House in getting its spending work done for the first time in decades.

Ryan has not imposed similar discipline on his House colleagues, giving them free rein to work their will, but with mixed results. While he made good on his promise for a more open process, House spending bills have hit a wall, The Hill says.

Under the Speaker's open process, Democrats attached to the energy and water projects spending bill an amendment barring federal contractors from discriminating on the basis of sexual orientation or gender identity. It caused scores of Republicans to peel off from the underlying bill, which failed in a lopsided 112-305 roll call, raising questions about whether Ryan's team will be able to muscle through any more bills or if the appropriations process is dead for the year.

Meanwhile, McConnell was emphasizing the importance of bipartisanship in moving legislation in an OpEd in the Wall Street Journal. He even argued that moving bills to make ideological statements might excite activists but usually leads to a dead end.

Ryan says he hasn't made any decision yet about whether the House will stay the course with its freewheeling process. House Republicans will need to have a "family discussion" to decide whether any changes are needed, Ryan told The Hill after the pre-Memorial Day debacle.

Ryan's leadership problem seems formidable, observers say. "We have too little trust. Our problem in our conference is not lack of leadership, it's lack of followership," said Rep. Tom Cole, R-Okla., a member of the Appropriations Committee.

"You have to ask yourself whether it's worth derailing a $37 billion bill about which three-quarters of which is to our nuclear stockpile, to upgrade and test our own nuclear arsenal, we're going to throw that out on the culture wars issue?" Cole asked his colleagues.

This is a high-stakes battle, experts say, with significant blocs disagreeing with the leadership on almost every issue. Everyone involved seems to understand what's involved, but it remains to be seen whether the budget process will move forward, or unravel as the season progresses, a continuing confrontation producers should watch carefully as it unfolds, Washington Insider believes.

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