Washington Insider -- Tuesday
The Fight for the Next Bailout
Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.
Both Canada And Mexico Say They Have Met Requirements On USMCATop trade officials from Canada and Mexico have now said their countries have made the necessary changes in their regulations and laws needed for implementation of the U.S.-Mexico-Canada Agreement (USMCA).
"This is an important step towards implementing this essential trade agreement," Deputy Prime Minister Chrystia Freeland said in a statement released Friday. "The Canadian government will continue to work with the United States and Mexican governments to determine an 'entry into force' date that is mutually beneficial."
From Mexico, chief negotiator Jesus Seade said on Twitter that with the changes completed by Mexico, “we will have a modern instrument that will strengthen the competitiveness of the region and energize the trilateral relationship."
As for timing, Freeland’s statement only mentioned that it would come into effect “later this year.”
U.S. Trade Representative Robert Lighthizer said Friday at the White House that the U.S. is “on track with USMCA,” but did not provide any other comments relative to whether the U.S. has completed its work to pave the way to implement the deal.
Provided the U.S. also completes its changes required for USMCA, the earliest the agreement could take effect is now July 1.
Ag and the SBA effort
Much attention has been focused on whether agriculture operations can qualify as small businesses under the $349 billion in loans/guarantees in the third round of COVID-19 aid.
The American Farm Bureau Federation on Friday revised its analysis of the Small Business Administration's (SBAs) Paycheck Protection Program Loans.
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“Based on our analysis of the IFR [interim final rule], we are pleased to confirm that the IFR removes the industry-specific revenue thresholds. Agriculture enterprises that employ 500 or less people whose principal place of residence is in the United States are eligible, regardless of revenue levels.”
The group also sent a six-page letter to USDA Secretary Sonny Perdue detailing recommendations for spending the $23.5 billion that was included in the Phase 3 economic stimulus package, including aid to the ethanol sector ($14 billion in Commodity Credit Corporation (CCC) borrowing authority and $9.5 billion for USDA to provide help to producers of livestock (including dairy) and fresh fruit and vegetable growers and specialty-crop farmers).
Washington Insider: The Fight for the Next Bailout
The near congressional unanimity on the recent $2.2 trillion coronavirus rescue bill “has given way to partisan finger-pointing that has the potential to poison the debate,” Bloomberg reports.
While the crisis has worsened since President Donald Trump signed the coronavirus aid law on March 27, there is little consensus on next steps as leaders extend the economic shutdown.
Bloomberg notes that the president and Senate Minority Leader Chuck Schumer, D-N.Y., exchanged biting letters last weekend accusing each other of fumbling the initial response and that Senate Majority Leader Mitch McConnell, R-Ky., blamed Democrats for distracting the nation from an emerging threat. Speaker Nancy Pelosi, D-Calif., said the administration’s slow response has cost lives.
The rancor continued to grow in spite of the fact that the number of Covid-19 cases in the U.S. has pushed past 368,000 and nearly 11,000 deaths with “government data began showing the pandemic’s rapid and widespread impact on the U.S. economy.” Meanwhile, the current rescue plan got off to a rocky start as small businesses struggled to submit documents and lenders ran into trouble with the government’s portal for loans.
The increasingly alarming numbers prompted Speaker Pelosi to scale back her earlier ambitions for the next stimulus. She thinks Congress should “update” the current legislation to provide more money for small businesses and individuals and, over the weekend, said she wants the legislation to get a vote this month.
At the same time, there is no consensus on what that package should look like. McConnell told the Associated Press that there will be a fourth virus-related bill but said he and Pelosi have “a little different point of view” about its timing and what should be included.
Lawmakers in both parties are already proposing an assessment of the U.S. response to the outbreak, which exposed shortages of equipment and “faltering efforts of the federal government to get and distribute medical supplies where needed.” But the form that should take is the subject of continued partisan bickering.
On Saturday, the president dismissed concerns over the rollout of a $349 billion program to assist small businesses rocked by the virus, saying loan distributions were “way ahead of schedule” even as banks struggled to respond to the flood of requests. “It’s been flawless so far,” he told reporters. “I don’t even hear of any glitch.”
His rosy assessment came even as some small businesses worried that funds for the Paycheck Protection Program, a key element of the stimulus, might run out before loans are even approved.
The president told the press on Sunday that he likes the concept of additional stimulus checks for individuals once the first round has been delivered. However, press reports began to circulate then that as the government confronts the worst economic disaster since the financial crisis in 2008, it could be hamstrung by vacancies among its political appointments. Of 20 Senate-confirmed positions reporting to the treasury secretary, seven aren’t filled, and four are occupied by acting officials. The domestic finance unit, which should be handling the brunt of the work tied to the pandemic, is notably empty, Bloomberg said.
In addition, the president said over the weekend that he will nominate a White House lawyer to a newly created post of inspector general to oversee spending of the coronavirus stimulus and that he had chosen Brian Miller for the job, despite the president’s earlier questions about the authority of the position.
Miller is now a special assistant to the president and a senior associate counsel in the White House Counsel’s office. Before that, he was an independent corporate monitor and an “expert witness.” He has worked at the Justice Department and was an assistant U.S. attorney in Virginia, the statement added.
Meanwhile, Pelosi and Schumer urged the Treasury Department to move more quickly to help airlines to save industry jobs and refrain from imposing “unreasonable conditions” that might spur carriers to decline payroll assistance, a concern that has been raised by regional airline trade groups and flight-attendant unions. In a letter yesterday to Treasury Secretary Steven Mnuchin, Pelosi, Schumer and other Democrats stressed that provisions of the $2.2 trillion stimulus passed by Congress were aimed specifically at bolstering aviation jobs.
Trump and Vice President Mike Pence insisted that they see signs the U.S. outbreak is beginning to level off or stabilize, citing a day-to-day reduction in deaths in New York. “We are beginning to see the glimmers of progress,” Pence said at a White House news conference. “The experts will tell me not to jump to any conclusions, and I’m not, but like your president I’m an optimistic person and I’m hopeful.” Pence said the government is starting to see “cases, and most importantly losses and hospitalizations, begin to stabilize.”
So, we will see. The impacts of the virus are continuing to spread along with economic uncertainty. Government interventions appear to be helping but the toxic politicization across Washington obscures the outlook for future efforts, trends that should be watched closely by producers as this battle against the pandemic proceeds, Washington Insider believes.
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