Washington Insider -- Friday

Virus Relief Bill

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

State Department Taking Action to Speed H2 Visa Situation

The U.S. Department of State and the Department of Homeland Security have decided to authorize temporary waivers for in-person interviews for eligible H-2 visa applicants. This applies to both H-2A and H-2B visas.

“Temporarily waiving in-person interviews for H-2 visa applicants streamlines the application process and helps provide steady labor for the agriculture sector during this time of uncertainty,” USDA Secretary Sonny Perdue said in a statement. “H-2 labor is vital to the economy and food security of America – our farmers and producers depend on these workers to continue to feed and clothe the world.”

It is not clear if the State Department action applies to only returning visa holders or if the process will help seed the new visa applicants.

More Actions Urged on Dairy

USDA should use its Section 32 authority to purchase additional dairy products in a bid to support the struggling dairy industry and meet rising food assistance needs as the nation grapples with the COVID-19 pandemic, Vermont’s congressional delegation urged in a March 24 letter to USDA Secretary Sonny Perdue.

The coronavirus crisis is hitting the U.S. dairy industry hard and the National Milk Producers Federation (NMPF) is looking to USDA to help stabilize prices and provide aid to struggling farmers along with Vermont’s congressional delegation.

USDA should “immediately exercise its Section 32 authority to purchase additional dairy products for distribution through The Emergency Food Assistance Program (TEFAP),” the lawmakers urged. The economic effects of the COVID-19 pandemic are expected to increase strain on the charitable food system, and the purchases will “will help ensure those in need receive critical nutrition during this challenging period,” they said.

A key issue the dairy industry is concerned about relates the level of school closures that have taken place, reducing milk demand and that may well be demand that will be lost for the sector.

Washington Insider: Virus Relief Bill

The Senate unanimously (96-0) passed the coronavirus relief bill this week and it was sent to the House where it is expected to pass today, the Washington Post says. At least some of its many details are emerging, Bloomberg reports.

As almost everyone knows the plan would include about $2 trillion in aid, including $500 billion in loans and cash assistance for individuals, companies, states and cities. Also emerging are some of the strings that were attached to avoid problems with earlier bailout packages.

For example, companies receiving government loans would be subject to a ban on stock buybacks “through the term of the loan plus one additional year.” They also would be required to limit executive bonuses and take steps to protect workers – and Treasury would be required to disclose the terms of loans or other aid. A new Treasury inspector general would oversee the program.

The bill is largely a win for the retail, hotel and restaurant industries that had initially viewed lawmakers as favoring the airline industry, Bloomberg said. “We see it as an important win,” said Austen Jensen of the Retail Industry Leaders Association said. “Yes, airlines are in a tough spot, but the retail industry is equally in a difficult position.”

Struggling U.S. airlines would be eligible to receive federal loans and direct cash assistance amounting to about $25 billion of each. The cash assistance for payrolls is expected to eliminate the risk of near-term bankruptcies, JPMorgan analyst Jamie Baker said in a report Wednesday.

Other transportation winners include rail and transit operators. Amtrak would get $1.02 billion to cover virus-related revenue losses and support state-funded routes. State and local transit agencies would get $25 billion for operating and capital expenses.

The bill also carves out more than $350 billion in aid for small businesses, mainly guaranteed loans through the Small Business Administration and banks. The loans could be forgiven provided the businesses meet certain requirements including limiting reductions in pay and layoffs, though with more flexibility for employers than the original Senate bill.

The package also would provide direct payments to lower- and middle-income Americans of $1,200 for each adult, as well as $500 for each child.

Democrats were able to insert a change from a previous version to allow low-income taxpayers the full $1,200 payment. The initial plan would have given smaller checks, or in some cases, no money at all, to very-low income people, Bloomberg said.

Unemployment insurance payments are to be bolstered and recipients would be eligible to receive those funds for an average of four months, up from three in the prior GOP plan. It also would extend eligibility to the self-employed and workers in the gig economy such as drivers for Uber Technologies Inc.

The legislation calls for $117 billion for hospitals and veterans’ health care, as well as $16 billion for personal protective equipment, ventilators and other medical supplies for federal and state response efforts. It also includes $11 billion for vaccines, therapeutics, diagnostics and other medical needs, and at least $250 million to improve the capacity of health-care facilities to respond to medical events, according to a summary by the Senate Appropriations Committee.

The bill also would require insurers to cover tests for Covid-19 and require labs to post cash prices on public websites. Vaccines or other preventive services would be covered without cost-sharing.

Also, many U.S. homeowners and businesses hit hard by coronavirus could get relief from making their monthly mortgage payments. Borrowers with loans insured by government agencies such as the Federal Housing Administration and the Department of Veterans Affairs would be eligible for “forbearance.” Consumers whose mortgages are backed by Fannie Mae and Freddie Mac would also be eligible to skip payments.

U.S. regulators have already mandated relief for borrowers facing financial hardships due to coronavirus, in addition to suspending foreclosures and evictions through the end of April and in some cases longer. Under the Senate bill, borrowers would be eligible for 60 days of forbearance if they can demonstrate virus-related financial stress. The relief can be extended for 30 days up to four times.

Commercial borrowers with federally backed loans could potentially skip payments for at least 30 days with a possible extension of up to 60 additional days.

The stimulus package includes up to $23.5 billion in farm aid and would provide $9.5 billion in emergency funds for agriculture, including livestock producers and growers of specialty crops such as fruits and vegetables. And it would authorize $14 billion in new borrowing authority for the USDA’s Commodity Credit Corp. Agriculture groups including the American Farm Bureau Federation, the United Fresh Produce Association and livestock groups had sought aid in the stimulus package.

A coronavirus relief fund with $150 billion would be created for states, cities and other local governments. Additional funds will be set aside for territories, tribal governments and other entities.

Democrats sought to add funding for clean energy but in the end funds for both clean and conventional energy were scuttled. However, the issue could arise later as Congress takes up additional coronavirus-related legislation in coming weeks.

So, we will see. The legislation being considered is criticized by many for being too large and by others for being too small—even as the need for assistance was dramatized by the increase in unemployment from 3.5% to 5.5% this week and numbers of virus cases continued to grow. Clearly, this is a crisis that producers should watch closely as it intensifies, Washington Insider believes.

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