Washington Insider -- Friday

Administration Proposing Safety Net Reorganization

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

House Passes Farm Bill 213-211

After the vote total on the House version of the farm bill hung at a tie vote, the eventual tally for the bill moved it forward from the chamber 213-211. No Democrats supported the package and 20 Republicans voted no with four lawmakers (two Republicans and two Democrats) not voting.

A relieved House Ag Committee Chairman Mike Conaway, R-Texas, said after the victory that the focus now will shift to the Senate and a hoped-for conference that can be wrapped up before the 2014 Farm Bill expires September 30. "Now we're ready to anxiously await Pat's success next week in the Senate, if he can get his bill done," Conaway told reporters, referring to Senate Ag Committee Chairman Pat Roberts, R-Kan.

House Ag Committee Ranking Member Collin Peterson, D., Minn., did not talk with reporters, but said in a statement, "The only upside to its passage is that we're one step closer to conference, where it's my hope that cooler heads can and will prevail." Peterson parted ways with Conaway over work requirements and other provisions on the Supplemental Nutrition Assistance Program (SNAP). He commented that while the current Senate bill is not perfect, "it avoids the hardline partisan approach that House Republicans have taken here today."

Conaway said he expects Peterson to "weigh in on behalf of the production of agriculture in the way he has always done."

Senate consideration of their version of the farm bill is now expected to take place next week.


Commerce's Ross Believes Soybean Price Drop 'Exaggerated'

U.S. lawmakers this week have stepped up their criticism of steel and aluminum import duties put in place by the U.S., with a Senate Finance Committee session with Commerce Secretary Wilbur Ross bringing those views to the forefront.

The current tit-for-tat over steel and aluminum and other trade policies mean U.S. farmers "are bearing the brunt of retaliation for these actions," Senate Finance Chairman Orrin Hatch, R., Utah, told Commerce Secretary Wilbur Ross during the hearing.

Hatch said the Trump administration’s tariffs and trade policies are hurting US manufacturing and agriculture without showing a clear strategy for countering China. Ross said the huge spike in steel prices “is not a result of the tariff” but of “antisocial behavior by participants in the industry” — behavior triggered by the tariffs.

When Senator John Thune, R-S.D., warned that the resulting soybean price decline was costing South Dakota soybean farmers hundreds of millions of dollars, Ross responded by saying he heard the price drop “has been exaggerated.” He also blamed the price drop on market speculators.

Sen. Chuck Grassley, R-Iowa, said the price fall for soybeans equated to $61.25 per acre.

Washington Insider: Administration Proposing Safety Net Reorganization

The nutrition safety net expected to be included in the next farm bill has already been the focus of strong opposition in the House, but likely will be kept largely intact in the Senate version. Now, However, the administration is has released a sweeping plan for reorganizing the federal government to consolidate welfare programs — and to rename of the Department of Health and Human Services (HHS), Politico reported recently.

Politico also thinks that the biggest changes outlined by the White House are unlikely to be implemented quickly because moving multibillion-dollar programs and renaming federal departments generally requires congressional action. “But the plan, like the president’s annual budget, demonstrates the administration’s thinking on a range of domestic policy issues. It also offers a strong political selling point for the Trump White House as it tries to burnish an image of an administration dedicated to conservative principles and smaller government.”

“The administration already put a lot of stuff out in this year’s budget related to cuts, but that was the easy stuff,” the administration official said. “This [report] is the harder stuff.”

The new name for HHS would emphasize programs that provide assistance to low-income Americans. HHS, an enormous Cabinet-level agency that spends roughly $1 trillion annually already oversees the Temporary Assistance for Needy Families program, which provides cash assistance to low-income people, as well as Medicaid, the health coverage program for the poor that insures more than 70 million Americans.

White House officials have been working on their bid to reorganize the government for months but have kept an unusually tight lid on the plan. The effort stems from an executive order President Trump signed in March of last year directing OMB to come up with a plan to overhaul the government to make it more efficient. Only recently have some of the ideas begun to circulate outside OMB.

The plan appears to draw, at least in part, from recommendations made last year by The Heritage Foundation, the conservative think tank that has deeply influenced Trump’s agenda in his first year and a half in office.

Heritage recommended that all nutrition functions at USDA, including food stamps, nutrition education and school meal programs that serve some 30 million children each day — be transferred to HHS. It charged that “USDA has veered off of its mission by working extensively on issues unrelated to agriculture.

“By moving this welfare function to HHS, the USDA will be better able to work on agricultural issues impacting all Americans.” However, moving nutrition out of USDA, where it makes up roughly three-quarters of the department’s budget, would be regarded as a big blow to the profile of the department, Politico said.

Still, conservatives often favor moving food stamps over to HHS, in part because HHS has been out front on instituting first-ever work requirements in the Medicaid program. Already, HHS has approved work requirements for Medicaid enrollees in four states.

"Generally speaking, we're in favor of the idea," said Kristina Rasmussen, vice president of federal affairs at the Foundation for Government Accountability, a conservative group that's grown increasingly influential among GOP leaders seeking to spend less on welfare programs. "HHS has been doing some pretty exciting things on the work requirements front for able-bodied adults."

The New York Times said the Mulvaney proposals likely would be part of a rebranding effort. “They have been using the word welfare because it is pejorative,” said Elaine Waxman, a senior fellow in the Income and Benefits Policy Center at the Urban Institute, a nonpartisan Washington think tank told the Times. “The programs you can call welfare are actually very small in comparison to SNAP, which is an income support necessary to help families, workers and millions of kids.”

The Times called Mulvaney’s proposal, “in part, a back-to-the-future bureaucratic move.” From 1953 to 1979, the Department of Health, Education and Welfare housed most of the nation’s social welfare and economic support programs. It was abolished by Congress under President Jimmy Carter, and split into the Department of Health and Human Services and the Department of Education, in recognition that no single department could manage all of the old department’s functions.

So, we will see. It is no secret that budget hawks generally would like to push the nutrition programs out of the typical farm-bill support coalition — a development Collin Peterson, D-Minn., House Ag Committee minority leader, said earlier this year would defeat the bill. Currently, most observers think the reorganization the budget hawks are now considering remains a long shot, but one producers should watch closely as this debate proceeds, Washington Insider believes.

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