Washington Insider -- Wednesday

The Push for Rescissions Appears to Fade

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

China's Xi Calls for More Opening Of China's Market

Foreign companies would gain more access to the Chinese financial and manufacturing sectors based on statements made by Chinese President Xi Jinping at the Boao Forum, a government-backed gathering of business and political leaders.

Accelerating access to the Chinese insurance sector, expand the permitted business activities for foreign financial institutions and reduce tariffs on imported automobiles were among the changes Xi said were in the pipeline. "In a world aspiring for peace and development, the Cold War and zero-sum mentality look even more out of place.” Xi stated. "Putting oneself on a pedestal or trying to immunize oneself from adverse developments will get nowhere." Markets welcomed the comments as they did not up the rhetoric between the U.S. and China.

Department Of Justice Clears Bayer/Monsanto Deal: WSJ

Bayer's proposed purchase of Monsanto will get the green light from the U.S. Department of Justice as the companies agreed to sell off additional assets, with the Wall Street Journal reporting that would include Bayer divesting itself of additional seed and seed-treatment assets and that it would make concessions on its digital agriculture business.

The report said that BASF would acquire those assets. "As we’ve said from the beginning, this opportunity is about combining highly complementary businesses and bringing new innovative solutions to our customers," Bayer said in a statement. "We remain confident in our ability to obtain all necessary regulatory approvals and look forward to continuing to work diligently with regulators to support that process. We anticipate closing in second quarter 2018."

Washington Insider: The Push for Rescissions Appears to Fade

The Washington Post is reporting this week that the effort in Congress to pull back some approved spending that was talked about last week “might already be dead.” The Post says early opposition from two key Republican senators who said Monday that they were unlikely to support the move could mean that it is dead.

Aides to President Trump are working with House Majority Leader Kevin McCarthy, R-Calif., to craft a “rescission” bill that would take advantage of special legislative procedures to roll back tens of billions of dollars in federal appropriations.

While the omnibus spending bill that passed last month was the product of a compromise between Republicans and Democrats, largely due to Senate rules requiring a three-fifths majority vote, the Trump administration could send up a package of cuts that could pass on a simple majority vote under procedures set out in the 1974 statute governing the federal budget process.

However, it is not at all clear that a rescission bill could get a simple majority in the Senate, The Post says. Republicans hold only a slight 51-49 majority and Democrats say they are inclined to oppose cuts to the deal they already negotiated and passed.

Two Republican “cardinals” — powerful lawmakers who chair Senate Appropriations subcommittees — said Monday that they were perplexed by the talk of a rescission bill just weeks after the passage of the omnibus.

“I’d obviously have to look at what’s in it, but I do not understand reopening a hard negotiation on a budget package that has just been completed,” Sen. Susan Collins, R-Maine, who chairs the subcommittee on transportation, housing and urban development, and related agencies said. “To me, the administration would be better advised to focus on this coming fiscal year. We’re just starting up the hearings in the Appropriations Committee, and that would be a far better approach.”

Asked Monday if appropriators were throwing cold water on the notion of pursuing rescissions, Sen. Lisa Murkowski, R-Alaska, said, “Well, this one is.”

“Just off the top, my initial response is no,” said Murkowski, who chairs the subcommittee on interior, environment and related agencies. “You know, we worked hard. It’s not a perfect package. Nothing is. But as individual appropriators, I know we all worked hard on our accounts and tried to get the priorities that we could.”

Opposition from Collins and Murkowski — as well as the indefinite absence of Sen. John McCain, R-Ariz., would mean that Republicans would be unable to muscle through a rescission bill on their own. GOP leaders would need to peel off several Democrats, and while some red-state Democrats seeking reelection this year might be inclined to vote with Trump, they would also come under considerable pressure to stick with the deal that they already voted for.

The package under consideration by the White House, according to Republican aides familiar with the discussions, could range from $30 billion to as much as $60 billion — representing anywhere from 2 to 4 percent of the $1.3 trillion spent in the omnibus.

Not all Republican appropriators are opposed to the notion of rolling back spending. Sen. John Kennedy, R-La., who opposed the omnibus last month, said he was all for it: “The bill, to me, was an embarrassment.”

But even senior GOP senators greeted the notion of a rescission bill warily Monday.

Sen. Richard Shelby, R-Ala., who is the most senior Republican on the Appropriations Committee and is expected to be confirmed as its chairman, said he has not had any discussions with the White House about the bill.

“I would like to see the particulars,” he said. “It might be something serious. It might be something debatable. It might go nowhere. But I don’t know. I haven’t seen anything.”

Shelby said that pursuing rescissions could make it difficult to come to the necessary bipartisan compromise needed to craft spending legislation for fiscal 2019, which starts on Oct. 1: “If we cut a deal with somebody, we want to honor it, okay?”

In one example of what could ensue if Republicans were to push through the rescissions bill using the special procedures, Democrats could withhold cooperation on future legislation unless Republicans agree to reverse the move. But GOP leaders, especially in the House, are looking to provide an outlet for conservative anger over the spending bill — a sentiment that has been fueled by Trump himself, who declared “I will never sign another bill like this again” on March 23 after delivering a last-minute veto threat before ultimately signing the bill.

So, this may or may not be a hard call, and will have powerful implications either way. It is a particularly important proposal and a debate that should be watched closely by producers as it proceeds, Washington Insider believes.

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