Washington Insider - Thursday

Entitlement Reform Next Year

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

US Takes Actions Under GSP, But Program Ends December 31

President Donald Trump on Friday restored Argentina's eligibility under the Generalized System of Preferences (GSP) trade program, which was suspended in 2012, the office of the U.S. Trade Representative (USTR) said. Argentina was being reinstated "following resolution of certain arbitral disputes with U.S. companies, new commitments by the Argentine government to improve market access for U.S. agricultural products and improved protection and enforcement" of intellectual property rights, it said. USTR also said it would suspend some of Ukraine's GSP benefits in four months unless the country improves its protection of property rights.

GSP provides duty-free treatment for goods from poor and developing countries. But unless Congress acts soon, Argentina won't be happy about the trade development for long. GSP will officially expire on December 31 as the U.S. Congress failed to renew the trade benefits before exiting for the holidays. The new session of Congress will have to consider renewing GSP when they return – the week of January 3 for the Senate and week of January 8 for the House.

USDA Announces Systems Approach On US Soybeans to China

A systems approach will be deployed for U.S. soybean shipments to China to reflect new procedures for those shipments with more than 1% foreign material, according to USDA's Animal and Plant Health Inspection Service (APHIS).

The new procedure, which applies to both bulk and container shipments of raw, unprocessed soybeans to China, goes into effect January 1, 2018, APHIS said, "and is necessary to maintain the uninterrupted flow of U.S. soybeans to the United States’ largest export market."

In September, Chinese officials notified APHIS of foreign material exceeding Chinese standards as well as weed seeds of quarantine concern in U.S. soybean shipments to that country, APHIS said in a statement. "We worked closely with our partners in China’s General Administration of Quality Supervision, Inspection and Quarantine on a practical solution that addresses their concerns and provides for the uninterrupted flow of U.S. soybeans for our soybean producers and exporters,” said Osama El-Lissy, Deputy Administrator for APHIS’ Plant Protection and Quarantine program.

Washington Insider: Entitlement Reform Next Year

One of the key challenges in today’s Washington is to guess the next major battle—and, clearly there are many issues to choose among. However, Politico has a candidate and its “entitlement reform.” Politico says this has long been a dream of Speaker Paul Ryan and the fight may arise from the fact that his plan to revamp the federal safety net faces stiff resistance from his own party in the Senate. Politico calls that “harsh reality.”

The news outlet says that the Wisconsin Republican has detailed an ambitious effort to dramatically reshape Medicare, Medicaid and welfare programs that have long been targeted as ripe for reforms. “But bring it up with key Senate Republicans and House GOP moderates and they blanch, seeing a legislative battle that may not be winnable and that may not be worth it in an election year where control of Congress is up for grabs.”

Senate Majority Leader Mitch McConnell, R-Ky., has all but ruled out the idea, saying publicly that he doesn’t expect to see welfare and entitlement changes on the agenda next year, “particularly if it's done in a party-line manner.”

“The sensitivity of entitlements is such that you almost have to have a bipartisan agreement in order to achieve a result," McConnell told reporters at a news conference last week.

“We’re going to have a narrow majority next year,” said Sen. Cory Gardner, R-Colo., chairman of the National Republican Senatorial Committee, about an entitlements fight. “We’re going to have our hands full with nominations and an infrastructure bill and a bipartisan agenda.”

Still, those sentiments are running headfirst into the hopes of House conservatives, not to mention those of the Speaker, whose years-long pitch to privatize Medicare has endeared him to the right.

In order to win votes for a budget in late October that paved the way for the tax overhaul, Ryan promised leaders of the conservative Republican Study Committee to vote sometime next year, on deficit reduction legislation. Republicans have since then discussed enacting work requirements for food stamps and other programs for the poor, as well as Medicare changes to curb spending.

“We have to address entitlements, otherwise we can’t really get a handle on our future debt,” Ryan said on CBS “This Morning” last week. He also specifically singled out programs for low-income people: “We, right now, are trapping people in poverty. And it’s basically trapping people on welfare programs, which prevents them from hitting their potential and getting them in the workforce.”

But even some of Ryan’s rank-and-file are wary of tackling entitlements. Hillary Clinton carried about two dozen GOP-held swing districts in 2016. And with evidence of a Democratic wave already building, centrist Republicans fear cuts to programs that support the most vulnerable could cost them their seats.

Longtime centrist leader Rep. Charlie Dent, R-Pa., who’s retiring at the end of 2018, said a House vote on entitlement reform would put vulnerable swing-state lawmakers in an even shakier position in the midterm elections. And all for nothing, since it will never pass the Senate, he added.

When asked about entitlement reform, several other House GOP moderates responded that they’d prefer to tackle infrastructure, as did Collins in the Senate.

And yet Ryan might still press ahead. The votes are likely there in the House to pass cuts or changes to food stamps, disability insurance, and even Medicare and Social Security. Ryan could also draw on a powerful ally in the White House. While Trump has steered clear of suggesting Congress curb Medicare, he’s spoken in recent weeks about reforming welfare programs.

And there are GOP senators who are excited about taking up an overhaul of entitlement or welfare programs. One is Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, which oversees much of the federal safety net.

“I’d love it,” added Sen. Jeff Flake, R-Ariz., “That’s a heavy lift, particularly after the tax bill … but we know we’ve got to rein in these programs in order to make them sustainable.”

Republicans could also choose to use their reconciliation powers for other purposes.

Another option would be yet another push to dismantle Obamacare. While McConnell has thrown cold water on the idea, Sen. Lindsey Graham, R-S.C., said he wants to take another crack at Obamacare and will not vote for a budget that doesn’t include reconciliation instructions for health care.

Still, even Graham acknowledged that “getting the Senate to make any substantial changes to Medicare in a partisan fashion is gonna be a bridge too far.”

So, we will see. More and more, it looks like the Farm Bill debate will land in the middle of another enormous fight over the nation’s broad social programs, an unwelcome development for many ag program advocates, Washington Insider believes.

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