Washington Insider -- Tuesday

Congress Struggles Ahead of Coming Recess

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

US, China Label Deputy-Level Talks ‘Positive’ & ‘Constructive’

U.S. and Chinese deputy-level talks Thursday and Friday in Washington were labeled “positive” and “constructive” by both the U.S. and China in separate statements issued following the talks.

The sessions were “aimed at improving the trade relationship between the two countries,” the Office of the U.S. Trade Representative (USTR) said in a statement. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October.”

The China Daily reported the talks “discussed the trade issues in a constructive way. Moreover, the two countries also talked the specific arrangements for the 13th round of China-U.S. high-level economic and trade consultations in Washington DC in October. The two sides agreed to maintain communication on relevant issues.” President Donald Trump declared Friday that the U.S. would not accept an interim agreement on trade as the U.S. is “looking for a complete deal.”

Speaking to reporters at a news conference Friday with Australian Prime Minister Scott Morrison, Trump said China’s offer to boost purchases of U.S. agriculture exports alone is not enough to compel his administration to sign a deal. Intellectual-property theft, he added, remains an issue that must be resolved.

As for the farm visits that were canceled, Han Jun, vice-minister at the Ministry of Agriculture and Rural Affairs, said the canceled visit was due to a change in the itinerary of the team. "There was a good outcome from the negotiations in the agriculture area too. The two sides had thorough and candid communications," Han said, according to a report by state-backed Yicai news outlet.


Biofuel Announcement Now on Hold as Trump Seeks Still More Info

As last week closed, it appeared that issues relative to US biofuel policy had been settled and an announcement from the Trump administration was expected to come. That assessment came from sources in the wake of the meeting September 19 between President Donald Trump and senators representing refining interests.

However, as this week opens, sources now indicate that Trump is seeking more perspective and options in the matter, reportedly bringing National Economic Council chief Larry Kudlow into the mix.

Expectations were that the Trump administration was poised to announce that they would use a three-year average to reallocate Renewable Fuel Standard (RFS) obligations that were covered by small refinery exemptions (SREs), starting with the 2020 compliance year. Coming out of the Thursday meeting, it appeared that refiner interests were likely to get a cap on prices for Renewable Identification Numbers (RINs), the credits refiners can buy to show compliance with the RFS.

However, now that the matter has apparently been thrown open once again, the expectation for an announcement has turned to uncertain relative to the timing of any announcement from the Trump White House.

Washington Insider: Congress Struggles Ahead of Coming Recess

The Hill and other media are reporting this week that the Congress is working under pressure to pass a continuing resolution to fund the government through Nov. 21 before it leaves town. The House already passed its stop-gap bill and Senate Majority Leader Mitch McConnell, R-Ky., has started the process of bringing it to the Senate floor, but it hasn’t been scheduled yet for a vote.

McConnell acknowledged earlier that a short-term bill would be needed to avoid an end-of-September shutdown and that a temporary continuing resolution for the outstanding parts of the government will be needed before that time. However, he hasn’t yet weighed in on the House-passed CR, which was unveiled last Wednesday. In addition to funding the government, the bill would require USDA to provide state-by-state data on the effects of the president’s trade war.

It also extends several health programs, the National Flood Insurance Program and authorizations for the Export-Import Bank.

The decision to punt the government funding fight to later in the year comes amid other significant battles that loom over the fiscal 2020 bills. While the House passed 10 out of its 12 funding bills, many of them include “poison pills” inserted by Democrats meaning they won’t get taken up as is by the GOP-controlled Senate.

The Senate, meanwhile, hasn’t passed any of its fiscal 2020 bills. Senate Democrats blocked an attempt by McConnell last week to bring the first funding package to the floor, which was expected to include funding for the Pentagon; the departments of Health and Human Services, Labor, and Education; the Energy Department and water development; and the State Department and foreign operations.

Democrats opposed bringing up the bill because of frustration about the top-line spending numbers for all 12 bills. Those estimates were approved by the Appropriations Committee in a party-line vote but opposed by Democrats who believed that they included extra border money in the Department of Homeland Security bill to replace that diverted by the administration for the border wall.

Democrats also opposed the Senate’s defense funding bill after Republicans objected to language that would prevent Trump from shifting military spending toward the wall without congressional sign off.

“The appropriations process demands that Republicans and Democrats work together. If one party decides to go it alone, it can wreck the spirit of bipartisanship necessary to responsibly fund the government. Unfortunately, Republicans elected to depart from a bipartisan path early in the appropriations process this year,” said Senate Minority Leader Charles Schumer, D-N.Y.

The Senate Appropriations Committee is scheduled to vote on four bills this week: interior and environment; commerce, justice and science; the legislative branch; and the Department of Homeland Security.

The DHS bill is expected to spark a brawl in the committee because Republicans included money for the U.S.-Mexico border wall and because it covers lightning rod issues like Immigration and Customs Enforcement and detention beds.

Senate Democrats could force a vote as soon as this week on a resolution to nix Trump’s emergency declaration on the wall. Congress previously voted to end the emergency declaration in February, but the House was unable to override the president’s veto. Under the National Emergencies Act, Democrats can force a vote on the resolution every six months. A bipartisan group of senators reintroduced the resolution on Sept. 11.

Democrats are fuming after the Pentagon announced earlier this month it would be moving forward with its plan to redirect $3.6 billion in military funding toward the wall under the emergency declaration.

Schumer said that Democrats would force a vote within the month, which would have to be this week before Congress leaves town. “The president’s national emergency declaration was, and is, an outrageous power grab by a president who refuses to respect the constitutional separation of powers,” Schumer said from the Senate floor at the time.

House Majority Leader Steny Hoyer, D-Md., announced Friday that the House will take up two bills led by Democrats and aimed at improving "how the Department of Homeland Security oversees border issues in a humane and responsible manner, including the care of children."

Both bills are expected to face an uphill battle in the Republican-controlled upper chamber.

So, we will see. It appears that there is little support for a government shutdown just now, but the number of inflammatory issues is very large — and reluctance to push bi-partisan agreement appears to be fully woven into the partisan politicking ahead of the 2020 election. Producers should watch each of these fights very closely as they intensify over the coming days, Washington Insider believes.

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