Washington Insider -- Monday

President Signs Stopgap Spending Measure

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

Farmers To Automatically Get Bump Up In Prevent Plant Payment

Farmers with crop insurance who claimed prevent plant for 2019 will automatically get a “top-up” payment via the disaster aid package approved this year by Congress. Payments will be made by Approved Insurance Providers (AIPs).

The announcement from USDA clears up a question of whether the payments would be made via crop insurance or would come from the Farm Service Agency (FSA). Producers with Yield Protection and Revenue Protection with Harvest Price Exclusion will receive a 10% top-up payment while those with Revenue Protection policies will get a 15% payment.

Initial payments will be made in mid-October with additional payments the middle of each month after that as more prevent plant claims are processed. There were crop insurance indemnity claims on an estimated 19.6 million acres this year.

The top-up payments are separate from disaster payments via the Wildfires and Hurricanes Indemnity Program Plus (WHIP+).


Pelosi, McConnell Comment On USMCA Situation

The top leaders of the House and Senate both made remarks Thursday relative to the U.S.-Mexico-Canada Agreement (USMCA).

“Let me just say … we are moving ahead on the U.S.-Mexico-Canada-Agreement (USMCA),” House Speaker Nancy Pelosi, D-Calif., told reporters as she concluded a news conference. “Again, we are hoping to be on a continued path to yes,” Pelosi added. Other House Democrats said the newly launched impeachment inquiry will not affect their work with the Trump administration to negotiate changes to the deal in four core areas: labor, environment, access to medicines and enforcement.

Senate Majority Leader Mitch McConnell, R-Ky., told Democrats that “the time for excuses is over.” In a speech on the Senate floor, McConnell said Democrats’ continued objections amount to little more than “heel-dragging,” and suggested a chief reason for the pact’s delay is the House’s impeachment inquiry and related investigations.

“Canada, Mexico and millions of Americans are waiting for Speaker Pelosi to remember that serving the public interest requires more than just picking fights with the president,” McConnell said. “It actually entails addressing the people’s business.”

Meanwhile, the House Democrats USMCA working group will meet with U.S. Trade Representative Robert Lighthizer today. The group will reportedly tell Lighthizer its responses to proposals USTR sent over earlier this month.

Washington Insider: President Signs Stopgap Spending Measure

The Hill and other media are reporting this week that the president on Friday signed a stopgap funding measure to keep the government running until Nov. 21, an eight-week extension into the new fiscal year that begins this week. The measure was agreed in an effort to avoid another government shutdown this fall.

The legislation, which passed in the House last week and the Senate on Thursday, keeps 2019 funding levels in place while Democrats and Republicans look to hammer out a broader spending deal.

Controversy over the president’s proposed border wall has stalled most new spending bills, The Hill noted. While the House passed 10 of the 12 annual measures early in the summer, the Senate, where bipartisan support is required to pass legislation, has not been able to complete a single appropriations bill for the 2020 fiscal year.

In recent weeks, the Senate Appropriations Committee succeeded in marking up 10 bills, but several more bills, such as defense and homeland security, received only Republican support.

Democrats have continued to oppose the provision of an additional $5 billion for the wall at the U.S.-Mexico border, and insist that other bills should block the administration from using emergency powers to reprogram funds. So far, the administration has reprogrammed upwards of $6 billion from defense, military construction funds and a Treasury asset fund for the proposed wall.

In an effort to resolve the current standoff, the president was scheduled to meet with Senate Appropriations Committee Chairman Richard Shelby, R-Ala., about a way forward for the legislation. However, Shelby warned on Thursday that without a bipartisan deal on border issues, Congress might be forced to rely on stopgap measures—that is, continuing resolutions – for the entire 2020 fiscal year.

That would prevent agencies from embarking on new projects and deny them an already agreed-upon, multi-billion dollar boost in spending levels.

The stopgap measure signed last week also extended major health programs, flood insurance, authorization for the Export-Import Bank and disaster funds.

In the meantime, Bloomberg is reporting that China’s foreign minister hit back at President Donald Trump’s trade policies at the UN on Friday, warning that protectionism could plunge the world into a recession just as negotiators from both countries prepare to meet in Washington next month.

Foreign Minister Wang Yi, speaking from the General Assembly rostrum days after President Trump used the same setting to criticize China’s trade practices, said that “tariffs and provocations of trade disputes” are upsetting the global industrial and supply chain and risk undermining the “global economic and trade order.”

“China will not ever be cowed by threats, or subdued by pressure,” Wang said. “Erecting walls will not resolve global challenges, and blaming others for one’s own problems does not work.”

President Trump devoted much of his General Assembly speech on Tuesday to China’s trade practices, accusing Beijing of failing to adopt promised reforms and embracing an economic model dependent on massive market barriers, heavy state subsidies, forced technology transfers and the theft of intellectual property.

He defended his imposition of tariffs, saying he wouldn’t accept a “bad deal.”

As the trade conflict unfolded, China targeted American farmers – an important political constituency for the administration – in retaliation for U.S. tariffs by cutting purchases of soybeans and other commodities. The administration “has responded with a bailout for farmers that, so far, totals about $28 billion,” Bloomberg said.

“Regarding economic and trade frictions and differences, China is committed to resolve them in a calm, rational and cooperative manner, and is willing to demonstrate utmost patience and goodwill,” Wang said. “Should the other side act in bad faith, or show no respect for equal status or rules in negotiations, we will have to make necessary responses to safeguard our legitimate rights and interests.”

Trade talks are to resume in Washington early in October and China’s Vice Premier Liu He is expected to lead his country’s delegation.

So, we will see. The difficulty in completing work on the next U.S. budget along with Chinese saber rattling are both regarded as significant economic danger signs for the coming months, along with the growing political tensions in Washington. These are among the many ongoing and expected debates that producers should watch closely as they emerge, Washington Insider believes.

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