Washington Insider - Thursday

New Focus on Welfare Reform

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

Sen. Cruz Scores Thursday Meeting With Trump, Cabinet Officials on RFS

A meeting with President Donald Trump, several cabinet members and Sen. Ted Cruz, R-Texas. Thursday on biofuels will not involve Sen. Chuck Grassley, R-Iowa. But Grassley says he is not worried so long as Trump "keeps doing what he told the voters of Iowa, as well as me and Senator [Joni] Ernst, which is supporting ethanol," Grassley told reporters Tuesday. He said such meetings are not unusual and noted the session is probably not as key as it could have been now that the Environmental Protection Agency (EPA) has announced its Renewable Fuel Standard (RFS) levels.

As for the hold that Cruz placed on the nomination of Iowa Agriculture Secretary Bill Northey to be a key USDA undersecretary, Grassley said he did not think Trump would agree to weaken the RFS in exchange for Cruz to drop that hold. "Mr. Northey wouldn't want to be confirmed if the president was going to compromise his views on ethanol — if that was the trade-off," Grassley said. Regarding not being invited to the session, Grassley simply said, "I doubt they'd want me around." Meanwhile, some reports indicate an oil industry representative will attend the meeting, but that has not been confirmed by the White House. Besides Trump and Cruz, the meeting will also include EPA Administrator Scott Pruitt, USDA Secretary Sonny Perdue, White House advisers, Energy Secretary Rick Perry and National Economic Council Director Gary Cohn.

Sen. Ernst Pushes Staying In NAFTA at White House Visit with Trump

Sen. Joni Ernst, R-Iowa, followed up on expectations she would raise the importance of NAFTA as she and other lawmakers met with President Donald Trump and U.S. Trade Representative Robert Lighthizer at the White House on Tuesday. "Trade plays a critical role in Iowa's economy, and I reiterated to the administration the importance of ensuring Iowans remain competitive in the global market - provided our trading partners are operating on a level playing field," Ernst said in a statement after the meeting.

"I will continue working to ensure that any changes made to NAFTA do not hurt our crop and livestock producers." Ernst was among six Republicans who lunched with Trump and other administration officials at the White House where they talked trade, taxes and other issues.

Washington Insider: New Focus on Welfare Reform

There is suddenly a lot more talk in the urban media this week about “welfare reform”—before the two tax reform bills have even been discussed by the conference committee. For example, House Speaker Paul Ryan, R-Wisc., said the House would turn to broader welfare issues next year and several other developments signaled that these programs would soon be in the majority’s sights.

On Tuesday, POLITICO said that USDA announced a “vague” plan to give states greater flexibility over how they administer food stamps, potentially opening the door to stricter work requirements or drug testing on recipients.

The move followed an announcement by Wisconsin Gov. Scott Walker, who said he would move ahead with drug testing on able-bodied adults applying for food stamps, something the Obama administration had successfully blocked in the past.

The administration is also expected to announce that it would allow states to impose work requirements for Medicaid recipients — moves that anti-poverty advocates see as an assault on the safety net for vulnerable Americans.

Republicans have long sought to cut back programs like the Supplemental Nutrition Assistance Program, mainly known as food stamps, with its more than $70 billion in spending that now helps roughly 1 in 8 Americans.

The nutrition assistance program was created in the late 1930s as “food stamps” used to help people buy food for themselves and their families, “but it was not intended to be a permanent lifestyle,” said Agriculture Secretary Sonny Perdue.

“As a former governor, I know first-hand how important it is for states to be given flexibility to achieve the desired goal of self-sufficiency for people. We want to provide the nutrition people need, but we also want to help them transition from government programs, back to work, and into lives of independence.”

USDA said "Specifics on such flexibilities will be communicated to state agencies in the coming weeks."

The number of people on SNAP increased sharply during the recent recession and peaked at more than 47 million in 2013. It has since come down to 44 million as the economy has improved. The average benefit per person is about $125 per month. POLITICO said.

Also on Tuesday, Walker announced he had submitted a plan to the Wisconsin legislature that would require able-bodied adults receiving public benefits, such as food stamps, to be drug tested. Those who fail the test would need to comply with treatment requirements or lose their benefits, according to The Milwaukee Journal Sentinel. The program will take at least a year to go into effect. State lawmakers have 120 days to object to the proposal.

Walker’s administration estimated about 220 food stamp recipients statewide would test positive in the first year of the program, according to the Journal Sentinel. Supporters argued that the proposal will help those with substance abuse issues get the necessary treatment. Critics said similar testing programs in other states were expensive and turned up few positive test results.

The Supplemental Nutrition Assistance Program has been a key part of recent farm bills and is widely seen as important to build support in urban areas for expensive commodity programs. So, it is no surprise that Minnesota Democrat and ranking minority member of the House ag committee, Collin Peterson, is a strong supporter of both the commodity safety nets and the nutrition programs.

He said recently that he’s also thinking “big picture” about the types of changes that will either pave the way for final passage of a new bill in 2018 or kill it, and he is outspoken about the importance of the nutrition programs as a threat to the future bill.

He recently said that it was clear to him that farmers need to remember the lessons of the past farm bill, which included the first-time-ever farm bill defeat on the House floor in 2013. The vote failed after Florida GOP Rep. Steve Southerland offered an amendment, which would have allowed states to increase work requirements for citizens to receive Supplemental Nutrition Assistance Program benefits

Peterson maintains that the reason “that farm bill took so long to get done” is because of that amendment. If you bring in the work requirements, Peterson says, “there won’t be a farm bill. I guarantee it,” He emphasizes that he is not against provisions that are currently written in law to require able-bodied adults to work after three months of benefits if they can, but would oppose others.

“We’ll see," Peterson says, but notes that “the prospect of new welfare battles makes him nervous.”

Well, it seems certain that new welfare battles have at least the potential to affect the farm bill. There has been talk for about a decade now that the budget hawks were focusing in on farm and nutrition programs. Right now, this seems increasingly likely—a debate producers need to watch very closely as it proceeds, Washington Insider believes.

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