Washington Insider - Friday

Giving Up On a Good Idea

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

Perdue to Bloomberg: Trump Seeing NAFTA Benefits For Agriculture

Trade remains a hot-button issue for Washington and agriculture, and USDA Secretary Sonny Perdue said he thinks President Donald Trump has come around to see that NAFTA has been a positive for U.S. agriculture. Trump “probably left the campaign trail literally believing that NAFTA had not been good for any sector of the economy,” Perdue told Bloomberg in an interview. "I think that he has now come to realize that agriculture has been benefited by a NAFTA agreement." Perdue indicated he talks at least weekly with U.S. Trade Representative Robert Lighthizer and other White House staff.

Noting there has been some "movement" from Mexico in the talks, Perdue reiterated that Canada has been "more reticent" but will come around, too. On trade issues in NAFTA relative to Canada, Perdue said, “They’re coming to the point where they know they’re going to need to address some of these issues that are on the table.” But Perdue's comments may not offer much assurance to NAFTA backers when Trump tweets "NAFTA is a bad joke!" Further, he reiterated in an interview with Reuters that terminating NAFTA may be the only way to get the "best" deal on the 24-year-old trade pact.

Trump Administration Wants Trade Deal with China: USTR Nominee

Getting a trade deal with China is the goal the Trump administration is hoping to achieve by using trade remedy tools in U.S. trade law on China, CJ Mahoney, the nominee to be deputy USTR for Western Hemisphere, services, investment, labor, environment, Africa and China, told the Senate Finance Committee. "Ultimately, we need to bring China to the table to negotiate a political solution to some of these issues," Mahoney told lawmakers. "But it's going to take a change in the negotiating dynamic in order for us to achieve the kind of progress that we need."

Past efforts to use dialogue to engage China on trade have failed, Mahoney said repeated during the session, saying it was now time for a "new approach." The Trump administration has ramped up its pressure on China in recent weeks and figures to take a tougher stand.

Washington Insider: Giving Up On a Good Idea

Just a few years ago it seemed that Congress had responded to charges of corruption and was shamed into giving up the practice of allowing members to “earmark” funding for local projects. Still, things change, Bloomberg reported this week. House Speaker Paul Ryan, R-Wis., is being lobbied intensely to allow Congress to resume earmarking beginning with the annual spending bills and this year’s infrastructure development plan.

In fact, a somewhat new argument is being dusted off--senior Republicans and Democrats say the earmark moratorium wrongly ceded lawmakers’ control of as much as $15 billion in spending to the executive branch and undercut their ability to address needs in their districts.

Lawmakers are pushing Ryan to initiate a change in House rules to get rid of the ban and some said they intend to force a vote on the matter if the leader doesn’t act soon.

“We will have a vote if we don’t get something out of [the] Rules Committee,” Rep. Don Young, R-Alaska, dean of the House, said recently at a Rules Committee hearing. “It will be addressed one way or the other.”

House Minority Whip Steny Hoyer, D-Md., said the move would be controversial but offered Democrats’ support. “I think it ought to be done as soon as possible,” He said.

Young said Congress “neutered” itself with the decision to abandon earmarks and now should ignore warnings from the Club for Growth, and other groups, that the move could cost the GOP its majority this fall. He and current Transportation and Infrastructure Chairman Bill Shuster, R-Pa., also refuted charges that the projects will run up the deficit. “We have steadily given away more authority and it hasn’t saved money,” Shuster said at the hearing. “We’ve only shifted responsibility.”

While Young and Shuster said they want to direct spending for all infrastructure projects, Rep. Tom Rooney, R-Fla., said his plan focuses on funds the Army Corps of Engineers controls. Rep. John Culberson, R-Texas, an Appropriations “cardinal,” also called for lawmakers to direct money for flood control projects.

The move toward earmarks could become important as, in addition to the Washington focus on spending and immigration, work on infrastructure continues. The Senate Commerce, Science, and Transportation Committee says it will hold a hearing to begin crafting infrastructure legislation shortly after the President proposes an infrastructure package, committee Chairman John Thune, R-S.D., told reporters. “We think we’ll have a hearing as soon as we have a proposal from the administration,” said Thune, who also chairs the Senate Republican Conference. Thune still expects Trump’s proposal to come “at or around the State of the Union” on Jan. 30.

In addition, the U.S. Chamber of Commerce held an infrastructure summit this week, and said the group will offer a number of actionable infrastructure proposals. Among the proposals is a call to increase the federal gas tax by 25 cents a gallon over the next five years to help pay for rebuilding U.S. roads and bridges.

Well, it will be important to see how the fights over immigration and federal spending are worked out and the remaining wreckage cleaned up before looking forward to the next major issues, but infrastructure rebuilding was an administration priority promise and certainly will attract broad attention. This almost certainly will be a contentious fight over priorities, funding sources and timing, but is extremely important to agriculture and should be watched closely as it emerges, Washington Insider believes.

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