Washington Insider - Wednesday

Congress Braces for Chaotic January

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

CBO Reports on Potential Impacts to Shifts in Crop Insurance

Four options to reduce the cost of the federal crop insurance program are the focus of a new report from the Congressional Budget Office (CBO). It says restrictions on how losses are quantified and reductions in premium subsidies for crop insurance would result in cost savings of up to $19 billion over the next 10 years.

Savings could arise from cuts to payments and premium subsidies. Options include restricting how losses are quantified, reducing premium subsidies for crop insurance, and cutting reimbursements to private insurance companies for administrative and operating costs, CBO noted.

ITC Files Final Determinations on Argentine, Indonesia Biodiesel

Final determinations that the U.S. biodiesel industry is "materially injured" by imports of biodiesel from Argentina and Indonesia were issued by the U.S. International Trade Commission (ITC) December 21. The agency said they reached the determination as those imports were found by the U.S. Commerce Department to be subsidized.

The move could potentially lead to World Trade Organization (WTO) challenges from either Argentina or Indonesia as both countries have suggested that is one possibility relative to the U.S. duties.

Argentina exported about $1.2 billion worth of the energy product to the United States last year and Indonesia exported about $268 million.

The Environmental Protection Agency (EPA) also noted the import duties as a factor in why they opted to keep the biomass-based biodiesel requirements under the Renewable Fuel Standard (RFS) steady in 2019 with 2018 levels at 2.1 billion gallons.

Further, EPA Administration Scott Pruitt has argued that the U.S. should not be importing biodiesel to meet the mandates spelled out in U.S. law.

Washington Insider: Congress Braces for Chaotic January

While there’s a significant feeling of satisfaction across the ranks of Republican lawmakers this holiday season, those same lawmakers are “bracing for a chaotic January” as they prepare to plunge into several fights in the first weeks of 2018, The Hill is reporting this week.

The expected legislative storm reflects the fact that Congress headed home for the year without resolving spending battles or getting an agreement on several important, contentious issues such as immigration and foreign surveillance, The Hill says.

It all means Congress must reach another deal to prevent a government shutdown by Jan. 19. Lawmakers also likely have to solve the issue of whether to protect young immigrants losing the protection of an Obama-era program shielding them from deportation.

Sen. John Cornyn, R-Texas, the No. 2 Senate Republican, compared the upcoming schedule to “Groundhog Day.” “We get up and do the same thing over and over and over again. It's maddening,” he said.

In review, The Hill listed several key “fights to watch” when Congress returns.

The first is the budget shutdown deadline. It notes that lawmakers are under pressure to get a deal to increase the budget caps and prevent automatic across-the-board spending cuts, known as sequestration. Leadership, as well as the White House, have been negotiating behind closed doors for weeks trying to lock down a two-year budget agreement that would cover the rest of the 2018 fiscal year, as well as fiscal 2019.

But, thus far, a deal has remained elusive, with both sides battling over how much to increase both defense and nondefense spending.

Once a budget deal is enacted, appropriators can start work on a package known as an “omnibus” that would fund the entire federal government through next September.

Lawmakers will also have to work to avert a shutdown by Jan. 19. It will be the third shutdown fight since the start of December, with lawmakers likely to pass another short-term bill to buy appropriators time to craft the omnibus.

The Senate punted a House-passed disaster aid bill after leadership couldn’t get an agreement to speed up debate of the legislation in December.

The $81 billion package provides aid for communities affected by recent hurricanes in Texas, Florida, Puerto Rico and the U.S. Virgin Islands, as well as wildfires in California.

The Senate is expected to take the legislation up once senators return to Washington, with Cornyn and fellow Texas Sen. Ted Cruz wanting more funding for their state’s Hurricane Harvey.

But any push to help Texas would likely set off a demand from other delegations for help responding to wildfires in California, as well as additional funding for hurricane relief in Puerto Rico. Rep. Luis Gutiérrez, D-Ill., who has traveled several times to the island to view the devastation from Hurricane Maria, said that Puerto Rico needs an estimated $94 billion to rebuild.

The Senate also is eyeing a vote on an agreement linking a fix for the Deferred Action for Childhood Arrivals program and border security. Senate Majority Leader Mitch McConnell, R-Ky., has promised to bring a potential bill up for a vote in January if senators can finish legislation by then.

But divisions remain on key issues, including if those covered by DACA should get citizenship, how many individuals would be covered and what security provisions would be part of a package.

“Everybody’s going to have to hold their nose a bit and take a little bit of a loss in order to solve the problem. That’s the balance that we have to get to. Are we there yet? No. But I think we will get there,” Rep. Mario Diaz-Balart, R-Fla. told The Hill.

House conservatives have resisted a legislative fix on DACA.

Speaker Paul Ryan, R-Wis., promised conservatives upon taking his post in 2015 that he would not bring up any immigration bill that lacked support from a majority of Republicans, meaning any DACA-border security deal is sure to face a tough path in the House.

In addition, a pair of GOP senators likely will try to push two ObamaCare stabilization proposals after failing to get them included in the end-of-year funding measure.

GOP Sens. Susan Collins of Maine and Lamar Alexande of Tennessee agreed to punt the two bills — one providing two years of cost-sharing reduction payments and a second funding “reinsurance” programs — after House conservatives and Senate Democrats signaled they wouldn’t support including them in the continuing resolution.

“We will offer it after the first of the year when the Senate will consider the omnibus spending bill, the Children’s Health Insurance Program reauthorization, funding for Community Health Centers, and other legislation,” they said in a joint statement.

Lawmakers will also have to find a way to ensure the CHIP program remains funded after March. The program’s authorization expired in September, and a bipartisan deal on a long-term funding plan has remained elusive.

House Republicans remain opposed to measures to help stabilize insurance markets set up by a law they hate. Any effort to ensure passage of the legislation would likely have to be in a package already expected to get significant support from Democrats.

“I think the administration made a commitment to Susan Collins. How we can help with that commitment becomes the fundamental question. And right now, there’s a lot of work that needs to be done,” Meadows said.

So, there are a number of remaining conflicts to struggle over, as well as a few hold-over fights from the tax bill as well as new concerns like the Farm Bill and trade issues, in case you thought things might be too quiet in the new year. That seems quite unlikely, Washington Insider believes.

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