Washington Insider -- Thursday

Next Anti-coronavirus Step

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

USDA Makes Clear Farmers Are Eligible For COVID SBA Loans

USDA has released information stating that farmers do indeed qualify for the efforts in the third COVID-19 aid package relative to small business loans operated by the Small Business Administration (SBA), potentially increasing further the audience able to access the program.

The third COVID-19 stimulus plan contained $349 billion for the Paycheck Protection Program (PPP). The PPP is a guaranteed loan program administered by SBA, according to USDA, noting that the “purpose of the program is to support small businesses and help support their payroll during the coronavirus situation.”

USDA said that farmers are indeed eligible for the PPP loans. “Agricultural producers, farmers, and ranchers with 500 or fewer employees whose principal place of residence is in the United States are eligible,” USDA said. They noted that farmers are eligible if the farm has 500 or less employees, or it fits within the revenue-based sized standard, which is on average annual receipts of $1 million.

USDA also noted a farm can qualify if “it meets SBA’s ‘alternative size standard.’” That standard currently states that “a maximum net worth of the business not more than $15 million, AND the average net income Federal income taxes of the business for the two full fiscal years before the date of the application be not more than $5 million.”

Court Rejects Refiners’ Request for En Banc Hearing

The 10th Circuit Court of Appeals has rejected the request by Wynnewood Refining Company and HollyFrontier Cheyenne Refining to rehear the case in which a three-judge panel ruled that three small refinery exemptions (SREs) granted for the 2016 compliance year were invalid.

The court did not indicate why it rejected the request. The court said in its initial ruling that the law indicated the SREs were only available as extensions to companies that had received them in 2010.

The matter could now be appealed to the Supreme Court but it is not known if the refineries will opt to pursue that. The Trump administration waffled on whether to appeal (request an en banc hearing by the full court) and did not opt to take that step. That lowered expectations that the refiners would be successful in their challenge of the decision.

This shifts attention to EPA as they stated March 27, “EPA intends to develop an appropriate implementation and enforcement response to the 10th Circuit's decision in RFA v. EPA once appeals have been resolved and the court's mandate has been issued.” Expectations are that if EPA applies the decision nationwide, it would mean few refiners would qualify for SREs – reports indicate that only two or three would qualify.

Currently, there are 25 SREs pending for the 2019 compliance year.

Washington Insider: Next Anti-coronavirus Step

The political intrigues across Washington are deepening, POLITICO says, as Republicans move quickly to attempt to jam Democrats into accepting an extension of small business programs without addressing other Democratic priorities. A spokesman for Senate Minority Leader Schumer, D-N.Y., said there’s been no negotiations thus far with Schumer and Small Business Committee ranking member Sen. Ben Cardin, D-Md., on next steps.

Treasury Secretary Steven Mnuchin said he's spoken to all four House and Senate party leaders about sending $250 billion to the program. And Senate Majority Leader McConnell, R-Ky., said he intends to pass new relief as soon as Thursday without a roll call vote.

House Democratic leaders initially expressed private opposition to the idea. They have been resistant to piecemeal extensions and want additional money for state and local governments and an expansion of unemployment benefits for several more months.

But Speaker Nancy Pelosi, D-Calif., seemed open to the idea of an extension on Tuesday as she told CNN that it was clear the small business program needs more funds immediately. But the speaker, said there would have to be "considerations" to ensure that women and minority-owned businesses had equal access to the funds.

And, Democrats complained they were blindsided by tweets from Sen. Marco Rubio, R-Fla., about fast action and McConnell's statements. A spokesman for Schumer said the Democratic leader had not spoken to McConnell before the announcement, and that Rubio had not spoken to Cardin.

"I was a little taken aback that Sen. McConnell made this announcement without talking to Sen. Schumer or anyone else on the Democratic side of the aisle," said Sen. Doug Jones, D-Ala., on Tuesday afternoon. "Just to announce that you’re going to do something is not the right approach. But I think everybody would support trying to do something for small business."

With the Senate’s pro forma session scheduled for Thursday and the House scheduled for a Friday session, the Senate has an advantage simply on timing.

Still, House Democrats said they felt jammed by McConnell’s Senate majority on the $2 trillion phase three bill proposed for passage this month and may look darkly on an attempt to one-up them again. It’s also possible that a single House member could object to passing the extension via voice vote and demand lawmakers fly back to Washington to vote in person, something congressional leaders desperately want to avoid.

Similarly, a single senator could fight the plans. But one leading conservative, Sen. Mike Lee, R., Utah, would not fight a clean extension of the small business program, according to a person familiar with his thinking. Another conservative senator that sometimes objects to speedy passage of new spending, Rand Paul, R-Ky., did not have an immediate comment.

And without quick action, Rubio warned that fear would hammer small businesses that are applying for the oversubscribed program.

“We have days, NOT weeks to address this,” Rubio said.

Pelosi made clear Tuesday that she considers Mnuchin's request an "interim package" and still plans to pursue another massive legislative package that would expand unemployment benefits, include another round of direct cash payments and increased funding for state and local governments.

The small business program is popular and may actually be able to be extended without a roll call vote. That would defer debate on other ideas and allow the administration to hash out the unfolding crisis and the congressional response as the week unfolds. House Democrats will receive a coronavirus briefing from Vice President Mike Pence and other top officials on Wednesday, a rare moment of bipartisanship between the House majority and an administration it is often battling.

Pence spokeswoman Katie Miller tweeted that the vice president would also do calls with House Republicans, Senate Democrats and Senate Republicans on Thursday. A major topic of the briefing is expected to be efforts by federal officials to deliver needed personal protective equipment to states whose hospitals need it.

On Tuesday, senior administration officials said they are working with the private sector to ship “millions and millions” of masks. They also said they expected the United States would be able to deliver 100,000 new ventilators in the next 100 days and that testing has increased in the past four weeks from 2,500 tests a day to 125,000 tests a day.

U.S. officials have been coordinating a fleet of cargo planes to bring face masks, gowns, gloves and ventilators from overseas to help replenish rapidly depleting U.S. supplies. But the overall effort has been beset by bureaucratic roadblocks, miscommunication and charges of political favoritism by state leaders, POLITICO said.

Pelosi wants to begin working on a new more comprehensive bill immediately and is still talking as if the House could come back into session later this month to vote on it, although lawmakers are increasingly saying they think that’s untenable given the continued spread of the virus across the country.

The California Democrat has also met resistance from some top Republicans, who want to wait, as multiple federal and state agencies are already struggling to implement the policies Congress just passed.

So, we will see. It seems that election year fever is leading to “almost” bi-partisan efforts to counter the virus, although there almost certainly will be serious challenges from many directions as these policies unfold, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com