Washington Insider - Tuesday

Congress Split on Spending Policies

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

US-South Korea Initial Talks On Potential Trade Deal Updates

U.S. and South Korean officials focused on their main areas of interest in the initial talks held January 5, with the U.S. emphasizing trade in automobiles and what it considers various barriers to exports, U.S. negotiators said. South Korea said the two sides discussed "sensitive issues," including investor state dispute settlement and trade remedies, according to a South Korean media report.

“We have much work to do to reach an agreement that serves the economic interests of the American people,” U.S. Trade Representative (USTR) Robert Lighthizer said in a statement after the meeting. Over a series of meetings in the coming months, American negotiators hope to further open Korean markets to American cars and to smooth irritants in the trading relationship.

Trump Talks NAFTA, Farm Bill to Farm Bureau, But Few Details

President Donald Trump sounded presidential as he addressed members of the largest U.S. farm organization, touching on NAFTA, a new farm bill, regulation and more.

While he addressed NAFTA and a new farm bill, Trump offered little to those present on the touchy subject. Trump has continually said that the trade agreement is one of the worst for the U.S. and that he may well pull the U.S. out of the trade deal.

Saying his administration is seeking to level the playing field for U.S. farmers and exporters, Trump said the administration is "reviewing all of our trade agreements to make sure they are fair and reciprocal." On NAFTA specifically, he said, "I am working very hard to get a better deal for our country and for our farmers and for our manufacturers. It’s under negotiation as we speak." While getting applause, it was not as robust as some other moments in the speech.

"When Mexico is making all of that money, when Canada is making all of that money, it’s not the easiest negotiation," Trump pledged. "But we’re going to make it fair for you people again."

Washington Insider: Congress Split on Spending Policies

Bloomberg is reporting this week that “as the House joins the Senate begin the second session of the 115th Congress, Republicans and Democrats again find themselves far apart on a government spending bill only days ahead of a potential shutdown.”

The deadline on everyone’s mind is Jan. 19--and after Republican leaders met with President Donald Trump and cabinet officials over the weekend at Camp David there was no indication either side had budged on some of the policy disputes that are tied up in the debate over funding.

So, the main effort now will be the search for bipartisan deals, with the House and Senate needing the following week to vote on whatever bill emerges from the negotiations.

A key test will be whether Democrats and Republicans can agree to add other items to the new stopgap, Bloomberg says. This includes a two-year agreement to raise budget caps, changes to immigration laws, funding for natural disasters, and health-care law revisions. Unlike the tax cuts enacted by the GOP in December, Republicans will need votes from Democrats, and significant differences remain in each area, particularly immigration.

“If the Democrats want to shut down the government because they can’t get amnesty for illegal immigrants, then they’re going to have to defend those actions to the American people,” Sen. Tom Cotton, R-Ark., said yesterday on ABC’s “This Week” program—an indication of how contentious the coming discussions will be.

If both parties can agree this week on raising budget limits, Congress may be able to pass a short-term spending bill, a continuing resolution, said Muftiah McCartin, a former spending panel staff member for House Democrats and now at Covington & Burling LLP. “If they don’t get a deal, will the Democrats allow another CR to go forward? I’d kind of be surprised,” McCartin said.

Also, K Street strategists said the current-year appropriations may not be complete until well into February. “It could take weeks to write, score, and pass the bills,” said former House Appropriations Committee staff director Jim Dyer. “I don’t think you have this all done by the 19th. This has become too complicated,” Dyer, who’s preparing to join the government affairs practice at Baker Donelson law firm, said in an interview. “Now they have a massive laundry list of things they want to attach to the package.”

Even if negotiators were able to agree this month on new topline numbers for military and domestic spending, weeks of talks could be necessary to work out how $1.2 trillion or more in discretionary spending would be doled out to the Pentagon, disaster aid, and other government programs.

Meanwhile, K Street strategists said the current-year appropriations may not be complete until

So, we will see. Experts say the design of bi-partisan legislation is much more difficult than simply holding together a parties’ position was for tax reform legislation—and there may be remaining scores to settle from that fight that make the use of a threatened government shutdown a more attractive option. Still, everybody says they don’t want a shutdown, so the game seems to be to find a position close to a shutdown, but one that avoids taking ownership of such a policy. And, it will be yet another test of political leadership to manage that process to achieve a positive outcome—a process that should be watched closely as it evolves, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com