Washington Insider - Thursday

Outlook Continued Polarization in Congress

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

Republican Senators Urge Trump to Keep, Modernize NAFTA

Noting that the North American Free Trade Agreement (NAFTA) supports 14 million jobs, including thousands in each of the 50 U.S. states, the trade pact needs to be updated, according to a letter from 36 Republican senators. "Despite all of its benefits, however, we can do better and there are opportunities to improve the agreement," the lawmakers said. "Modernizing NAFTA to increase market access, expand energy exports to maximize domestic energy production and including provisions on intellectual property and e-commerce will make this agreement even more beneficial to the United States."

Noting the recently approved tax reform plan is helping to move the U.S. economy higher, the senators said the "next step to advance the economy requires that we keep NAFTA in place, but modernize it to better reflect our 21st century economy." The letter cites a host of facts and figures on the trade pact's benefits, including that U.S. agricultural exports to Mexico and Canada have quadrupled to $38.1 billion in 2016 from $8.9 billion in 1993.

USDA Nixes Proposal for Line Speed Increase

USDA's Food Safety and Inspection Service (FSIS) has rejected a National Chicken Council (NCC) petition seeking to implement a waiver system for maximum line speeds in poultry processing plants. NCC was seeking a system to exempt "young chicken establishments from the regulation that prescribes 140 birds per minute as the maximum line speed under the New Poultry Inspection System (NPIS)," according to FSIS.

In a statement, NCC President Mike Brown said the group is disappointed about the denial, but "encouraged that there will be a viable path forward in the near future for those plants operating under NPIS to petition the agency for increased line speeds, if they maintain a record of process control.

Washington Insider: Outlook Continued Polarization in Congress

Well, the Washington Post has never been a Trump fan, so it is not surprising that its after-action report on the State of the Union address is focusing on some of the “realities” regarding President Trump’s pledge Tuesday night to “extend an open hand” to both parties in pursuit of an ambitious policy agenda. Now, the Post says, the effort has “rammed quickly” into the reality of a largely gridlocked Congress — and a deeply polarized Washington.”

In addition, the Post concludes that Trump’s call for a massive infrastructure bill to fund new bridges, roads and other projects nationwide likely will be “shelved, at least for now,” as lawmakers prepared to return to disputes over spending that have gripped the Capitol for weeks.

Democrats, most of whom sat stone-faced in the House chamber during the address, blasted the president for not calling out Russia for its interference in the 2016 presidential campaign and predicted that his scripted appeal for unity could not make up for a year’s worth of divisive behavior.

And some conservatives expressed alarm that Trump offered to put more than 1 million young undocumented immigrants on a path to citizenship. At the same time, Democrats vowed to oppose Trump’s push to curb some forms of legal immigration.

“I enjoyed the fact that the president was measured and scripted, but everything we’re talking about here stays the same,” said Rep. Charlie Dent, R-Pa., a centrist Republican who is retiring after this year.

Sen. Ted Cruz, R-Texas, a former Trump campaign rival who has become a fierce ally, emerged from the speech and immediately noted the partisan breach and the disconnect between Trump’s words and the dynamics on Capitol Hill, the Post said.

Sen. Jeff Merkley, D-Ore., said “The president talked about unity in his speech at the beginning, but by the end all he did was drive the wedges further in.”

The Post concluded that Party leaders remain preoccupied by the approaching Feb. 8 deadline for authorizing government spending. Democrats, other than those running for reelection in conservative states, are wary of Trump’s outreach. And many Republicans, frustrated that Trump’s unpopularity is clouding out the potential political benefits of a healthy economy, are starting to bunker down ahead of the midterm election season.

“The fights and the disagreements have nothing to do with who is at 1600 Pennsylvania Avenue,” said Rep. Mark Meadows, R-N.C., chairman of the conservative House Freedom Caucus. “There are fundamental gaps in the Senate and the House that are keeping us from consensus.”

Congressional Republicans will head Wednesday to the Greenbrier resort in West Virginia for a party retreat, where Trump is scheduled to visit, and spending and immigration issues are expected to be discussed.

Trump’s emphasis Tuesday on improving infrastructure, pledging to build “gleaming new roads, bridges, highways, railways and waterways all across our land,” drew some bipartisan praise, the Post said. Still, even his plans for infrastructure — with legislation that would “leverage” state, local and private money to generate $1.5 trillion — prompted questions and scrutiny.

“One-point-five trillion [dollars] matched by apparently $1.5 trillion at the state — where does that come from, how does that work? A lot of details that need to be worked out,” said Sen. Cory Gardner, R-Colo., the chairman of the Senate Republican campaign arm.

Most Republicans, as they mingled at the Capitol on Tuesday after Trump’s speech, talked up infrastructure as public-private partnerships driven by tax credits for corporations. Democrats, however, talked about infrastructure as federal spending that should be driven by Congress, not by companies.

“It’s totally different,” Sen. Richard Durbin, D-Ill., the No. 2 Democrat, said of the Democrats’ understanding of infrastructure. Referring to Trump’s comments on funding, Durbin added: “To me, it’s a throwaway line, it avoids coming up with serious funding.”

Sen. Claire McCaskill, D-Mo., who is running for reelection in a state Trump won, added, “There are a bunch of us that want to work on infrastructure, but it can’t be overly reliant on tolls from blue areas of the country and leave red areas of the country behind.”

Republicans in swing districts said they are looking for “incremental” action in the coming months, if anything. Many say they are focused on selling the Republican tax law that was passed last year.

Factoring into the toxic atmosphere are the retirements of Republicans who in the past have shepherded legislative deals. Rep. Rodney Frelinghuysen, R-N.J., chairman of the House Appropriations Committee, announced Monday that he will not seek reelection, making him the eighth House committee chairman to do so in recent months.

The Democratic Party’s aversion to the President, along with Republican infighting, leaves the president with few options for grand bargains.

So, we will see. If the Post is right about the outlook for the infrastructure initiative, it will raise another concern for producers, along with the administration’s lack of support for trade—both issues to watch closely as this year’s policy fights intensify, Washington Insider believes.

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