Washington Insider -- Wednesday

White House Considering Obscure Approach to Spending Cuts

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

Push For Quick Finish for NAFTA 2.0 Talks

U.S. trade negotiators are pushing to finish NAFTA 2.0 talks with Canada and Mexico as quickly as possible, a White House spokeswoman said Monday. The White House declined to comment on a Bloomberg report that President Donald Trump wants a deal in principle by the Summit of Americas meeting in two weeks. "Negotiations are continuing on a daily basis with the goal of a successful and rapid conclusion, and the NAFTA countries will announce plans as warranted," the spokeswoman said. "As Ambassador [Robert] Lighthizer said in March, time is running very short to complete a new NAFTA agreement."

The Bloomberg article said the Trump administration hoped to announce a deal in principle by the Summit of the Americas meeting in Peru that begins April 13. Bloomberg sourced the information to "three people familiar" with the NAFTA talks.

All this is ongoing as China overnight ratcheted up likelihood of a trade war with the U.S., announcing higher tariffs on soybeans and 105 other commodities, worth some $50 billion.

See full story on those actions in the DTN Top Stories news segment.

China Provides More Subsidies to Soybean Farmers to Trim Corn Supply

Soybean farmers in northeastern China will receive more subsidies than corn producers in Liaoning, Jilin, Heilongjiang and Inner Mongolia provinces, according to the Ministry of Agriculture and Rural Affairs. The effort is the latest by China to trim its massive corn supplies that have built up. Farmers will also get subsidies for rotating their plantings and leaving some acreage fallow, with those subsidies applying to around two million hectares of land this year.

Farmers that purchase ag machinery and equipment along with those treating animal waste, using organic fertilizers when growing fruits and vegetables and recycling land films will also get government subsidies, according to the agency. No amounts were indicated in the reports recapping the information from the Ag Ministry.

Washington Insider: White House Considering Obscure Approach to Spending Cuts

The Washington Post is reporting this week that the White House is eyeing what it calls a “long-shot plan” to slash spending from the $1.3 trillion budget bill signed by President Trump late last month.

The Post said that the office of House Majority Leader Kevin McCarthy R, Calif., confirmed Monday that it is working with the administration on the approach, which would evidently rely on an obscure 1974 law that allows presidents to try to cancel spending authority already approved by Congress.

The spokesman, Matt Sparks, said planning was in the early stages and there were no details.

White House legislative director Marc Short said Monday, “The administration is certainly looking at a rescission package, and the president takes seriously his promise to be fiscally responsible.”

The Post said that it expected that any such process would involve a White House request for the “rescission” to Capitol Hill after Congress returns from its spring recess next week. However, Congress would need to approve the request, making it a long shot given all-but-certain Democratic opposition.

The White House plan would follow widespread conservative criticism of the omnibus budget bill, which increased spending by tens of billions of dollars for the military and domestic agencies while not including much money for Trump’s border wall, the Post said.

House Freedom Caucus Chairman Mark Meadows (R-N.C.), an outspoken critic of the ballooning domestic spending in the omnibus, praised McCarthy for his cooperation with the White House on efforts to pare spending. Meadows said he was “very supportive and extremely pleased with the leadership’s willingness to engage on the issue. Leader McCarthy heard from constituents and worked quickly to address the issue in a meaningful way.”

Trump threatened earlier to veto the $1.3 trillion spending bill before he signed it. He eventually signed the bill, apparently over concerns about shutting down the government. He also demanded a line-item veto, which, critics were eager to remind him, has been ruled unconstitutional by the Supreme Court.

“Rescission authority” is a related mechanism to the “line item veto.” It allows presidents to submit to Congress requests to cancel spending already approved. Under the Impoundment Control Act of 1974, Congress has 45 workdays to approve the rescission request, according to the Congressional Research Service. If Congress does not act, the money is made available.

Despite support from conservatives for a White House attempt to reduce domestic spending it deems unnecessary, the Post thinks any such plan would have great difficulty getting through the Senate, where the GOP holds a slim 51-to-49 majority--and even some Republicans might be reluctant to go along.

In fact, many observers heaved a big sigh of relief earlier when the President decided to sign the spending bill. They believed he had avoided another bitter, and potentially long, fight over how to keep the government open and which budget priorities were most important.

To pick up that fight once again the administration would renew budget hostilities at a time when it faces growing trade and economic uncertainties. It is, as the Post says, a “long shot” prospect now—but one producers should watch closely as the debate continues, Washington Insider believes.

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