Washington Insider --Wednesday

More Spending Fights

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

Grassley: USMCA Deal Needed This Week For Year-End Ratification

If a deal on the U.S.-Mexico-Canada Agreement (USMCA) is not reached by the end of this week, “I do not see how the USMCA can be ratified in the year we are in,” Sen. Chuck Grassley, R-Iowa, said on AgriTalk radio and on the Senate floor.

“By all accounts, the deal is close,” Grassley said. “I urge House Democrats to act quickly and be reasonable so that we can finally deliver certainty on this issue to the American people.”

Grassley said he has recently been in touch with both House lawmakers and members of the Trump administration.

He said once the agreement is in place between House Democrats and the administration, the process of getting the legislative language to Congress and consideration of the pact in both the House and Senate could happen in a relatively short timeframe.

House Extends Schedule By A Week

House Majority Leader Steny Hoyer, D-Md., announced Monday that the House will be in session the week of December 16. Previously the chamber was to be in session only portions of the first two weeks of December.

First votes of the week are expected to occur early in the day on Tuesday, December 17, with last votes of the week expected on Friday, December 20, Hoyer said in a message to House members. "Exact timing of last votes for the week will be announced at a later date.”

The move is not a surprise given that there is now a December 20 deadline for lawmakers to take action to keep the government funded and this also opens the door for action on the U.S.-Mexico-Canada Agreement (USMCA) to see action in the House.

Hoyer mentioned several weeks ago the chamber could be in session longer than the original departure date of Dec. 12.

Washington Insider: More Spending Fights

While there are more and more trade policy issues emerging almost every day and the president appears to be actively downplaying expectations for a deal with China in the near future, concerns about next year’s spending bills are re-emerging and attracting more attention.

To no one’s surprise, progress on funding the government for the year just beginning seems to be once again bogged down on the issue of funding for the border wall. For example, Bloomberg is reporting this week that lawmakers and the president may need a deal on border wall funding before any of the 12 fiscal 2020 spending bills can become law.

This is widely seen as a “tall task” as the Dec. 20 deadline to fund the government approaches.

President Donald Trump’s request for $8.6 billion in border wall funding remains the key sticking point in negotiations, lawmakers told Bloomberg — although appropriators have made progress recently, as the House and Senate Appropriations chairs agreed to top-line spending figures for the 12 bills.

And appropriators have started work on bicameral versions of the bills, but it is seen as unlikely that the President will sign anything into law before there’s an agreement on the border wall, Senate Appropriations Military Construction-VA Subcommittee Chairman John Boozman, R-Ark., said Monday. “The wall funding has to be resolved before I think anything much gets moved,” Boozman said.

A pairing of the two largest spending measures, covering Defense and Labor-HHS-Education appropriations, is possible “but I think they get held hostage” until border wall funding is settled, Boozman said.

The President requested $5 billion for border fencing in the Homeland Security spending bill and $3.6 billion in the Military Construction-VA bill. Lawmakers will also need to come to an agreement on limitations to the president’s ability to reprogram additional funds.

Because of the difficulty of those debates, those bills will likely be among the last completed, Boozman said. It’s one of the relatively few hot-button issues that subcommittee leaders won’t negotiate, instead kicking it up to either full committee leaders or members of congressional leadership to sort out with the administration, he added. He expressed hopes those discussions start this week.

Senate Appropriations Chair Richard Shelby, R-Ala., also raised the prospect of a Defense and Labor-HHS-Education package, but said there needs to be “some understanding” on the border wall.

“I think we’d have to have some kind of agreement or Trump wouldn’t sign it,” Shelby said.

Senate Appropriations Homeland Security Subcommittee Ranking Member Jon Tester, D-Mont., said the border wall talks probably should be completed before lawmakers send a spending package to the president’s desk, but he’s not sure if it’s an absolute necessity. Sen. Brian Schatz, D-Hawaii, ranking member of the Military Construction-VA Subcommittee, said that depends on the president.

Senate Appropriations Vice Chairman Patrick Leahy, D-Vermont, said he’d like to finish all the bills by December 20 but criticized the White House for being inconsistent about what they want, a complaint he’s repeated for months as spending talks have dragged on at a slow pace.

White House Legislative Affairs Director Eric Ueland was in the Capitol Monday to meet with lawmakers on topics that included appropriations, he said.

While Democrats oppose any funding for the border wall, they are pursuing their top priorities in the appropriations bills. Senate Minority Leader Chuck Schumer, D-N.Y., said his caucus’s top priorities include “significant resources to combat the opioid and gun violence epidemics, significant investment in infrastructure, significant investment in child care,” Violence Against Women Act funding, and “funding to secure next year’s presidential elections.” Senate Democrats also “strongly oppose the president stealing money from our military families to pay for this border wall,” Schumer said on the Senate floor yesterday.

While there are other pressures, many of these seem to be resolved within committees. For example, the Senate Appropriations Committee approved a Commerce, Justice, Science bill that included $70.8 billion in discretionary spending, the same amount as proposed by the Senate Democrats for those programs. However, the House Democrats proposed $73.9 billion.

In response, Sen. Jeanne Shaheen, D-N.H., said that while program funds “are low and while the bicameral allocations agreement provides less for them than many Democrats wanted, “she’s happy we have an agreement. Obviously I would like to have more money in it. I think it gives us a place to continue to go forward. We are in discussions now over what is going to have to come off, given the change in the number.”

So, we will see. There have been whispers for some time about negative impacts of the ongoing and threatened trade fights on economic activity, and at least some of these appear to be resurfacing once again this week—and they are increasing pressure on the Fed to “do something” to bolster growth,” and to make sure that government operations can continue without interruption. These increasingly appear to be broadening, high stakes fights that producers should watch closely as they emerge, Washington Insider believes.

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