Washington Insider - Monday

Work on Avoiding Government Shutdowns

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

FSIS Official Counters Brazil Talk of Reopening US market to Brazil Beef

A Brazilian meat executive caused a stir Nov. 28 when he told Reuters that his company Minerva, SA is getting ready to resume exports of fresh beef to the U.S. as early as the first quarter of 2018.

USDA officials, however, have dismissed the idea as “inaccurate” and stated again that they have never given a time frame for when the ban would be lifted. USDA suspended imports on June 22, when a government audit discovered food safety deficiencies in the wake of Brazil’s inspection scandal.

In an interview Friday (Dec. 1), Carmen Rottenberg, USDA’s Food Safety and Inspection Service’s acting deputy undersecretary, told IEG Policy that USDA is still waiting for Brazilian authorities to provide information on how they’ve resolved concerns that caused the ban to be imposed in the first place.

“Nothing has changed,” Rottenberg said. “The ball is really in Brazil’s court to provide us with information that we’ve requested. We have had back and forth with Brazil and they’ve provided us with some information and we’ve asked for additional information. But the notion that we’ve given them some sort of a timeline, is completely inaccurate.”

According to Rottenberg, at this time it is not possible to estimate when the ban may be lifted, because even when Brazil provides the additional information, the agency will likely still have to conduct a verification audit.

“There is a process here and we are following that process and basing our decision on science,” Rottenberg added.

Rottenberg’s comments come in a response to a Nov. 28 report by Reuters, in which the CEO of Minerva SA, Fernando Galletti, indicated that the company expects to resume fresh beef imports to the United States in the first quarter of 2018.

“This is the expectation we are hearing from the Agriculture Ministry,” Galletti said, according to Reuters.

This is not the first time that Brazilian officials have given overly optimistic estimates about when the suspension would be lifted.

Report signals Trump to meet with petroleum interests on biofuels

President Donald Trump has agreed to meet and discuss U.S. biofuels policy with the U.S. refining industry and lawmakers related to those interests, according to a report by Reuters.

The newswire quoted two sources familiar with the situation who asked not to be named. One source indicated Trump has been "briefed" on the situation and agreed to the meeting, with a session potentially to be the week of December 11 once a window of opportunity can be found.

However, Politico is reporting the meeting will be with Sen. Ted Cruz, R-Texas, and will not include any petroleum/refining industry officials. Cruz has put a hold on the nomination of Bill Northey to be an undersecretary at USDA, saying his hold will last until he gets a meeting with the White House on biofuel policy.

While this has set off considerable speculation that it could lead to reform of US biofuel policy, most contacts believe that is not likely to be the case.

Washington Insider: Work on Avoiding Government Shutdowns

The Senate passed a tax reform bill over the weekend, and Bloomberg is reporting that on Saturday, House Republicans already announced a plan to pass a two-week extension of federal government funding without Democratic votes to avoid a shutdown on Dec. 8.

The legislation would push the next deadline to the Friday before Christmas, “giving House and Senate lawmakers time to knit together their respective tax-cutting bills into a single piece of legislation to present to President Donald Trump.”

Representative Rodney Frelinghuysen, R-N.J., chairman of the House Appropriations Committee, told the press that this step is “necessary to ensure the programs and services that all Americans rely on are maintained and available to all.”

Representative Richard Hudson, R-N.C., said earlier that that the leadership team planned to press rank-and-file members to vote for the funding extension without any extraneous provisions that could cause delays. A handful of conservatives, including Republican Reps. Scott Perry of Pennsylvania and Jim Jordan of Ohio, had said earlier that they wouldn’t vote for it.

The short-term spending bill would still need support from some Democrats in the Senate, where 60 votes will be required to advance the measure and Republicans have only 52 members. But being able to get it through the House by relying just on the Republican majority removes some Democratic leverage to press to include other issues.

The Dec. 8 deadline was set in September when the President agreed with Democratic leaders to fund the government and suspend the debt limit for three months. Bloomberg says that Republicans are betting that putting all their energy into a legislative win on tax cuts will convince enough of their own members to push the spending negotiation off.

Following the Senate vote on Saturday, a conference committee will begin meeting in days to reconcile the two versions of the tax plan into a final bill that must be passed by both chambers before heading to the President for his signature.

The strategy for the funding measure grew in part from the complicated coalition that Republican leaders have to build for their tax overhaul, Bloomberg said.

As part of the negotiation to convince moderate Republican senators like Susan Collins of Maine to support the tax bill, Majority Leader Mitch McConnell, R-Ky., promised that a bipartisan proposal to stabilize health-insurance markets would be attached to must-pass legislation -- like a spending bill to avoid a government shutdown -- before the end of the year. Collins made the demand because the Senate tax bill would end the Obamacare mandate that individuals have health coverage, which is forecast to make insurance premiums rise.

The leading health proposal, from Republican Lamar Alexander of Tennessee and Democrat Patty Murray of Washington, is unpopular in the House, and Speaker Paul Ryan, R-Wis., said as recently as November that he doesn’t support it. Attaching the bipartisan health-care bill to a stopgap spending bill would risk enraging conservatives.

By creating another government shutdown deadline on Dec. 22, Senate leadership can still try to fulfill its promises to moderates by attaching the Lamar-Alexander legislation to a must-pass bill before the end of the year -- and hope by then the tax overhaul is already on the president’s desk.

Another lingering contentious issue is the legal status of young immigrants brought to the US illegally as children. There’s support in both parties for legal protection that would allow so-called Dreamers to remain under certain conditions. The President earlier ended the Obama-era Deferred Action for Childhood Arrivals program and gave Congress until March to come up with a fix.

Democrats and some Republicans, including Sen. Jeff Flake, R-Ariz., and Florida Representative Carlos Curbelo, R-Fla., demand a solution before the end of the year.

Curbelo said he would vote for a short-term spending bill that lasts until Dec. 22, but “I would not support funding the government beyond Dec. 31 unless we have a solution for DACA,” he said on Friday.

Also, appropriators probably won’t have time to finish their package of actual spending bills before Dec. 22, because Republican and Democratic leaders still haven’t agreed on top-line spending levels.

That means the legislation to avert a government shutdown on Dec. 22 will probably have to be another stopgap measure lasting until at least sometime in January, Bloomberg said.

Still, even with remarkable Republican unity on the tax overhaul buying some goodwill, there are Republican House members who resent being forced to perform the most basic function of Congress -- funding the government -- via a series of short-term crisis-avoidance bills. Several Freedom Caucus member point to a “whole host of concerns” about the strategy to fund the government for just two weeks, “I don’t know if it’s a failure of leadership,” a caucus member told Bloomberg, “But it seems to me to be a failure of vision.”

So, while Saturday’s tax bill deal may end one battle, there are several more on many issues, including spending and trade, that can be expected to cause major angst, and which producer s should watch closely as they proceed, Washington Insider believes.

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