Washington Insider -- Friday

Congressional Outlook: More Pressure and Uncertainty

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

Senate Ag Panel Clears Pesticide Registration Bill

Approval of the Pesticide Registration Enhancement Act (PREA) of 2017 (HR 1029) was secured by the Senate Agriculture Committee today by a unanimous voice vote.

The version approved by the Senate ag panel would shorten the end date for the reauthorization from 2023 to 2020 via a manager's amendment offered by Senate Ag Committee Chairman Pat Roberts, R-Kan. The bill still has to go through the full Senate before it will be returned back to the House for another vote.

"This historically noncontroversial, bipartisan legislation is vitally important to both the U.S. Environmental Protection Agency, as well as farmers and farmworkers," said Roberts and Ranking Member Debbie Stabenow, D-Mich., in a statement after the vote. "Not only does this legislation provide certainty to the pesticide industry, but it also provides new products to farmers for crop protection and to consumers to protect public health."

PREA would renew the Environmental Protection Agency's (EPA) authority to collect fees from pesticide makers to register the products and to approve their use around humans and in the environment. It would increase by almost 12% the amount of money the agency can raise to maintain existing registrations and set aside up to $1 million for farmworker safety training. The legislation passed the House March 20. The latest version of the law expires September 30.

The bill also would set aside up to $1 million for farmworker safety training. Besides the roughly 12% fee increase for existing registrations, the bill would instate two scheduled 5% fee increases — one in 2019 and the second in 2021 for product-registration service fees. The measure also would provide a $500,000 set-aside to combat bedbugs and crawling and flying insects, and require the EPA to track changes to product labels that are triggered by a safety review.

International Dairy Groups Also Protesting Canada Policy

Dairy industry organizations from the U.S., New Zealand, Australia, the European Union, Mexico and Argentina are urging their top trade officials to "pursue all avenues available" to challenge a new Canadian pricing policy they say breaches commitments on export subsidies.

"Canada's increasingly protectionist policies are diverting trade with attendant global price-depressing impacts, and are in conflict with the principles of free markets and fair and transparent trade," the groups wrote in a letter sent Tuesday.

The Canadian dairy industry created a new pricing program that allowed Canadian cheese makers and dairy processors to buy at the lowest world price milk protein products created as a byproduct of manufacturing of butter and other milkfat. There has been an excess supply of those milk protein products because of increased demand for butter and other milkfats.

The new policy priced out most U.S. exports of ultra-filtered milk, one of the few dairy products U.S. producers could ship duty free to Canada without being subject to the country's strict supply management program. Dairy producers in some countries have noted that Canada's excess milk protein is now showing up on the world market, threatening to suppress prices.

Washington Insider: Outlook, More Pressure and Uncertainty

The press is raising the political heat index now, focusing on the growing time pressure on the Congress to deal with the unusual amount of fine-grained political work—and the dwindling time available. This kind of pressure is always dangerous, observers note because it increases the already large temptation to turn to gimmicks and smoke and mirrors to give the impression of accomplishment.

For example, The Hill pointed to the recent action decision to hold off on efforts to vote on Obamacare until after the July 4 recess and suggested that “this adds yet another piece of legislation to what was already a jam-packed list and a tight floor schedule.”

The Senate will likely leave town for the weeklong break on Thursday after spending two days on a nomination vote as they negotiate behind closed doors on healthcare—which could have a domino effect, The Hill says. When lawmakers return to Washington on July 10, they are scheduled to be in session for only three weeks before they depart again until early September when they will immediately need to find ways to fund the government to avoid a shutdown.

Some Republican lawmakers are calling on GOP leaders to cancel the August recess, pressure that is expected to escalate if President Trump’s agenda stalls next month, The Hill says.

Still ahead are major policy bills including the annual National Defense Authorization Act, which lawmakers want to pass in July so they can use the August recess to conference their version with the House. The bill is usually overwhelmingly bipartisan but eats up precious floor time. For example, last year’s bill — which attracted hundreds of amendments — was debated for more than a week.

The result could be what some are calling a “potential legislative train wreck,” The Hill says. Senate Majority Leader Mitch McConnell, R-Ky., and Speaker Paul Ryan, R-Wis., outlined an ambitious 200-day agenda at a retreat earlier this year that included repealing and replacing Obamacare in April, passing a supplemental defense bill and overhauling the tax code this summer.

Now, there are signs of concern that the delay in healthcare is threatening the prospects of tax reform.

Four leading business groups want to move forward on the budget resolution that is necessary to pave the way for tax reform even as GOP leadership focuses on trying to wrangle the votes for repealing and replacing Obamacare. Republicans intend to use “reconciliation” to pass tax reform, a move that allows them to clear a bill with 51 votes--but they have to pass the FY 2018 budget resolution to allow such a measure to be brought to the Senate floor.

They know they can’t pass the budget bill before they’ve closed the door on healthcare or they will wipe out the vehicle for Obamacare replacement, which was set up by the FY2017 budget resolution, The Hill says.

There are also signs of a fight brewing over raising the debt ceiling, which lawmakers need to do for the first time since 2014. And, while Congress could kick that issue to the fall, top Republicans like Cornyn and Treasury Secretary Steven Mnuchin are urging Congress to deal with the limit before the August recess. However, the administration hasn’t “settled on a final way to address that issue,” The Hill said.

Lawmakers had also wanted to tackle funding of the Children’s Health Insurance Program in July, according to a House GOP timeline that was leaked earlier this year. That could push that fight closer to the Sept. 30 deadline, but would also imply running up against a possible government shutdown and deadlines for reauthorizing the Federal Aviation Administration and the National Flood Insurance Program.

There could also be late-minute fights added to the July schedule, including the nomination of Christopher Wray to be FBI director as well as the fight over how to move forward on a Russia and Iran sanctions bill that passed the Senate in a 98-2 vote earlier this month.

The push to cancel or delay the August recess is being led by the conservative House Freedom Caucus, Sen. David Perdue, R-Ga., and several others. The effort, which has come up in previous years, has gained traction among conservative media but has not been embraced by Republican leaders.

“One thing is totally clear: There isn’t time to deal with the issues that demand immediate attention. The only appropriate response is to cancel, or heavily truncate, the annual August recess that turns the United States Capitol into a ghost town,” Perdue wrote in a Daily Signal op-ed this week. He added that “change is never easy, but Americans are expecting our full and best effort. Failure is not an option.”

So, it will be important to note how the Congressional leadership deals with this coming time crunch, and the new policies that emerge from the many fights underway—fights that have the real possibility of affecting agriculture significantly, Washington Insider believes.

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