Washington Insider -- Wednesday

By DTN's Washington Insider

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

Ethanol Policy Volatility

Markets and biofuel interests were jolted Tuesday morning by reports from Bloomberg that the head of the Renewable Fuels Association (RFA) said it had been informed by President Donald Trump's administration that it would order a change to the U.S. biofuels program, lifting the responsibility for fuel blending off refiners.

Some oil refiners, including Valero Energy Corp., had long pushed the change, noting the structure of the country's biofuels program hits them with burdensome costs.

"We received a call from an official with the Trump administration, informing us that a pending executive order would change the point of obligation from refiners to position holders at the terminal," Renewable Fuels Association Chief Executive Officer Bob Dinneen said. "Despite our continued opposition to the move, we were told the executive order was not negotiable," he said.

"I was told in no uncertain term that the point of obligation was going to be moved, and I said I wanted to see one of our top agenda items moved," RFA's Dinneen said in a phone interview with Bloomberg. That waiver would "greatly expand the market opportunities for ethanol, and I think it is a darned good thing for our industry."

However, Reuters reported the White House is denying an executive order is being readied. "There is no ethanol executive order in the works," White House spokeswoman Kelly Love said. But Reuters also quoted RFA's Dinneen as saying, "There is certainty something in the works, but they're not going to confirm it until they are ready to roll with it."

Washington Insider: Whiplash on Obamacare

Well, by now whatever the administration has decided to do with its numerous economic proposals will be in the process of being vetted and argued over. Still, just ahead of the State of the Union speech, Politico reported that the President Donald Trump is giving Washington "a case of whiplash" especially when it comes to his plan for Obamacare, saying one moment that he's going to kill it and replace it with something "great" and then publicly flirting with letting it implode the next.

Whether the White House can repeal and replace the law this spring, as Capitol Hill leaders say is the goal, largely depends on the president's ability to focus and outline the specifics of what he would like while convincing reluctant GOP members to back a plan. "So far, his rhetoric has been all over the place, offering differing timelines and ideas, depending on the venue and the person he's speaking with," Politico says.

"Nobody knew that health care could be so complicated," Trump said Monday morning, a comment that added to the GOP's nervousness, Politico says.

Huddling with insurance CEOs, Trump talked up how fantastic his Obamacare replacement would be without giving details. Separately, Monday, he said it would be very difficult to do something good.

Costs will come down, he predicted, and "I think the health care will go up very, very substantially," the president said. "I think people are gonna like it a lot."

Politico is more skeptical. "Republicans, meanwhile, don't know exactly what to believe," it says. And they have grown increasingly concerned that the law is becoming more popular among Americans while the White House is dithering away.

Trump has taken a particular interest in what to do about ObamaCare, calling House Speaker Paul Ryan, R-Wis., frequently asking New York allies what they would do, and listening to a range of opinions — as he often does on subjects. He calls Secretary Tom Price after talking to others and shares what he has heard, Politico says.

He has seemed not to understand the intricacies of policy, according to friends, associates and others who have spoken with him, while at other times asking sharp questions. These people say Trump is acutely attuned to the potential for political damage and wants to be careful, and make sure Democrats are blamed if there is any fallout. Trump, who decries polls as "fake news," also closely follows them and has noticed the law's popularity ticking up, Politico says.

In his speech, Trump laid out some principals any Obamacare replacement must carry. Trump said such a plan should not mandate people buy insurance, but it should still cover people with pre-existing conditions. People should be able to buy their own coverage with more tax credits and expanded Health Savings Accounts. Further, states should get more resources and flexibility to deal with Medicaid "to make sure no one is left out."

Trump also called for dealing with issues such as legal reforms that would lower the health care costs and the price of drugs. Further, the president called for allowing health insurance to be sold across state lines, which he said would lead to "creating a truly competitive national marketplace that will bring cost way down and provide far better care."

Ahead of the Trump speech, House leaders were hoping that Trump will come around to their plan and let them do the heavy lifting. But the Senate has expressed some hesitation at the plan, and whether the two can be meshed through reconciliation seems unclear.

Some members, like Rep. Peter King, R-N.Y., say they are leery of supporting the plan because they aren't sure what would replace it. And they are facing resistance from the right. Rep. Mark Meadows, R-N.C., who leads the Freedom Caucus, said he wouldn't vote for the House plan Monday. He is influential among conservatives and often sways a number of votes.

So far, Trump has criticized the law but has offered few significant, tangible options. A leaked House Republican plan that would gut major parts of Obamacare was a draft that does not reflect lawmakers' current thinking, GOP senators and governors said Monday after they met in Washington to discuss health issues.

"They were told that that does not reflect current thinking," said Sen. John Cornyn, R-Texas.

Republicans in Congress are witnessing growing pushback on their plans to dismantle core pieces of the law, including the federal funding boost it gave to states to expand their Medicaid programs. GOP governors also do not have consensus on how to proceed on Medicaid expansion, as well as broader changes that would cap federal spending on the program, but several leaders from states that took the law's expansion have been outspoken about the need to preserve it.

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