Washington Insider -- Tuesday

Continuing Budget Fight

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

New Bill Would Check President's Tariff Authority

Congress would have checks on the president's authority to impose Section 232 national security tariffs under legislation offered by a bipartisan group of House and Senate lawmakers.

The Bicameral Congressional Trade Authority Act of 2019 would require the president to submit any proposal to impose Section 232 duties to Congress for approval. The bill was introduced in the House by Representatives Ron Kind, D-Wis., Mike Gallagher, R-Wis., Darin LaHood, R-Ill., and Jimmy Panetta, D-Cal., and in the Senate by Sens. Pat Toomey, R-Pa., and Mark Warner, D-Va.

More than 20 business and ag groups signed a letter in support of the legislation, including the U.S. Chamber of Commerce, National Taxpayers Union, National Retail Federation and Farmers for Free Trade.

The proposal targets Section 232 authority used by President Donald Trump to impose tariffs on steel and aluminum imports on national security grounds.

Under the new legislation, Congress would be given 60 days to review any Section 232 tariff actions proposed by the president. Such proposals could receive expedited consideration by both chambers of Congress using a joint resolution of approval. The new requirements would not only apply to future Section 232 tariffs, but also those imposed during the past four years -- which would include the controversial metals duties.

Besides additional congressional oversight, the bill would require any national security justifications for Section 232 tariffs to be determined by a Department of Defense review, rather than by the Department of Commerce as is currently the case.

Trump Says Pompeo 'Staying Put' as Top US Diplomat

President Donald Trump said over the weekend that while Secretary of State Mike Pompeo may have spoken to Mitch McConnell, R-Ky., about running for Senate, "I think he loves being Secretary of State." The remarks were in answer to questions to Trump about whether Pompeo is considering a run for a Senate seat in Kansas.

"He is doing a fantastic job," Trump said. "And I asked him the question the other day, he says he is absolutely not leaving. I do not think he would do that. And he does not want to be a lame duck. And he is doing a fantastic job as our secretary of state. Great energy and great -- a great, smart gentleman."

On Wednesday, Pompeo speaks at a breakfast in Kansas, increasing speculation he is considering a run for the Senate seat being vacated by Pat Roberts, R., Kan.

Continuing Budget Fight

There are many, many important issues on the table in Washington these days and one of the most important is the FY2020 budget proposal. Bloomberg says that while lawmakers don't know when they'll get President Donald Trump's fiscal 2020 budget proposal "they do know two things about it: It will call for steep cuts to non-defense spending and will mostly be met with a collective shrug on Capitol Hill."

The budget proposal technically was due yesterday, but White House officials have already said it will be late. Lawmakers aren't sure how late, but they're not particularly concerned, considering the request is usually more of a political document than a realistic proposal.

"The budget proposal from the White House seldom comes in on time and it seldom matters very much when it gets here," Sen. Roy Blunt, R-Mo., chairman of the Senate Appropriations Labor-HHS-Education Subcommittee, said recently. "What we do need is a number to start working with."

Senate Appropriations Chairman Richard Shelby, R-Ala., and State and Foreign Operations Appropriations Subcommittee Chairman Lindsey Graham, R-S.C., said they don't know what to expect in the administration's budget proposal.

The proposal will call for "reductions of at least 5 percent across the board in non-defense accounts," White House economic adviser Larry Kudlow said on Fox News last week.

The White House has not said whether that means a 5 percent cut compared to fiscal 2019 levels -- some of which remain in flux -- or compared to some other baseline.

But lawmakers are already discussing a different approach to top-line spending levels. House Budget Chairman John Yarmuth, D-Ky., said last week he expects an agreement to allow a spending increase for both defense and non-defense levels compared to fiscal 2019. Yarmuth and Senate Budget Chairman Mike Enzi, R-Wyo., have met to discuss an increase to spending caps under the Budget Control Act, Yarmuth said.

A roughly equal increase for defense and non-defense would mirror an agreement struck in March 2018 to raise caps for fiscal 2018 and 2019. "We're looking probably at a deal that resembles the deal for the last half of fiscal '18 and '19," Yarmuth told Bloomberg last week.

Without any action to alter the spending caps, defense spending would be cut by 11 percent from fiscal 2019 to 2020 and non-defense spending would be cut by 9 percent, Bloomberg noted. President Trump is expected to request $750 billion in defense funding in fiscal 2020, compared to $716 billion in fiscal 2019.

While there is little detail about the president's State of the Union address tonight, it is expected to take a traditional tone and focus on a theme of "choosing greatness," White House officials are saying. The president is expected to discuss immigration, the White House official said.

On that issue, Sen. Shelby said Sunday on CNN that "while Trump has the power to declare an emergency, it would likely have to be decided by the courts."

A CBS News poll released last weekend found two-thirds of Americans oppose a declaration of national emergency in order to build a wall on the border with Mexico. Most survey respondents -- 73 percent -- said they want president Trump to continue negotiating while keeping the government open.

Trump's anticipated suggestion for 5 percent spending cuts has at least one fan on the Senate Appropriations Committee, Bloomberg said. Sen. John Kennedy, R-La., who was recently selected to lead the Financial Services Subcommittee, said he plans to follow through on the proposed cuts. He criticized members who call themselves fiscal conservatives for not backing up their rhetoric.

Speaker Nancy Pelosi, D-Calif., has said the 17 Republicans and Democrats on the House-Senate conference committee must wrap up their work by Friday to allow a vote on any plan to resolve the government funding stalemate ahead of the Feb. 15 deadline. While staff members talked over the weekend, real progress isn't expected until after party meetings early this week.

When the talks began last week, Democrats offered no new money for border barriers and Republicans were still seeking $5.7 billion for a wall. Democrats suggested an openness to border fencing, but not the wall Trump made a centerpiece of his presidential campaign.

Trump repeated on Friday that he thinks members of the committee are wasting their time, saying he will build a border wall regardless of what they do.

Clearly, the 2020 presidential campaign is already beginning and can be expected to intensify as time passes. In the meantime, producers should watch these fights over budgets, trade policy and other concerns closely as they emerge, Washington Insider believes.

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