Washington Insider-- Wednesday

Political Tension Over Antivirus Efforts Continues to Grow

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

CFAP Payouts Top $9.4 Billion

USDA has now either paid out or has payments in review for disbursement totaling $9.445 billion as of August 31 under the Coronavirus Food Assistance Program (CFAP), an increase of more than $220 million from the prior week.

That includes $4.695 billion for livestock, $2.475 billion for non-specialty crops, $1.715 billion for dairy, $528 million for specialty crops, and $29.7 million for aqua nursery flora. The by-commodity breakdown includes $4.066 billion for cattle, $1.714 billion for milk, $1.667 billion for corn, $582.8 million for hogs, $477.9 million for soybeans, and $242.7 million for upland cotton.

States with $500 million or more in payments are Iowa ($934.7 million), Nebraska ($678.8 million), Minnesota ($583.2 million) Texas ($561.1 million), California ($540.7 million), and Wisconsin ($509.6 million).

USDA's Perdue Assures State Ag Leaders Another CFAP Round is Coming

USDA worked quickly to get payments pushed out via the Coronavirus Food Assistance Program (CFAP), and USDA Secretary Sonny Perdue told the National Association of State Departments of Agriculture (NASDA) that a coming second round of aid could help address shortcomings the department had to grapple with as it initially pushed to get aid out the door.

Since CFAP only covered losses incurred through April 15, there has been criticism from those in agriculture how say that there were sizable losses that happened after that date.

“We have listened and will be coming with a CFAP 2 program,” Perdue said, which will address that issue.

Expectations are the CFAP 2 effort should be announced soon and signup is expected to start shortly after the effort gets announced.


Washington Insider: Political Tension Over Antivirus Efforts Continues to Grow

Amid the tensions involving House investigations panel threats to subpoena documents from the U.S. Postal Service, House Majority Leader Steny Hoyer, D-Md., said he expects Congress to rely on a continuing resolution to fund the government after the current fiscal year concludes at the end of September.

The Postal Service has become the center of political clash between Democrats and President Trump. Nevertheless, Hoyer thinks “it is likely that we will pass a continuing resolution to keep government open past the end of this fiscal year. The House will do its job to avert a shutdown that would only further damage our economy,” Hoyer said, according to a Bloomberg report.

In the meantime, state and local governments are ramping up their lobbying efforts to prod Congress to approve billions in additional coronavirus aid to help them grapple with dismal budget projections and the limits on existing relief funding. The effort comes as congressional and White House negotiators are stalemated on another pandemic relief package, and with state and local funding a sticking point between the parties.

“State and local governments don't have the luxury of sort of letting the chips fall where they may,” said Leslie Pollner, a senior policy adviser at Holland & Knight whose clients include Phoenix, Seattle and the City and County of San Francisco. “They literally are on the phone every day — either they are or we are — trying to try to push on this.”

Sixty-one state and local governments have retained lobbying firms since the beginning of March, as the pandemic began battering their budgets, Bloomberg said. A group of seven different associations representing state and local governments, including the National Governors Association, the National Association of Counties and the National League of Cities, banded together to leverage their contacts on Capitol Hill and K Street.

The National Governors Association hired the Duberstein Group in April, its first lobbying firm since 2017. Its team of advocates includes a former senior GOP Senate aide, David Schiappa, and a former White House official from the Trump administration, Ben Howard.

Even with “rainy day” savings, states and localities have been hard hit by declining revenues, including from reduced tax and fee payments caused by the pandemic and from increased coronavirus-related spending on items such as testing and personal protective equipment.

Furloughs, layoffs and budget cuts could delay or cut services, infrastructure and capital projects, the groups say. They argue the impacts could be seen at public schools, hospitals, libraries, transit agencies, and police and fire departments. “It really could have a domino effect,” said Paul Guequierre, the communications director for the National Association of Counties. “We're feeling the impact now and we expect to feel the impact for quite some time.”

States project a shortfall of more than $550 billion through fiscal year 2022, according to the Center for Budget and Policy Priorities. The National Association of Counties says it expects a $202 billion impact to county budgets through fiscal year 2021, including the $30 billion counties likely will spend on the COVID-19 response. Cities are anticipating $360 billion in lost revenue between 2020 and 2022, according to the National League of Cities.

During the second quarter of this year, as the coronavirus pandemic spread, 659 governments and associations shelled out $15.1 million to lobby the federal government. Territories, states, localities and the associations that represent them spent $14.2 million on their lobbying efforts for the same period in 2019, Bloomberg says.

The National Governors Association has asked Congress for $500 billion in aid for states and territories, the same amount requested by the National League of Cities for county and municipal governments to use over the next two years.

In May, Sens. Bill Cassidy, R-La., and Bob Menendez, D-N.J., introduced legislation that would create a $500 billion stabilization fund for state and local governments. The following week, House Democrats passed a $3 trillion relief package that would have provided almost $1 trillion to state and local governments.

Neither measure has gained any traction in the Senate, Bloomberg says. Senate Majority Leader Mitch McConnell, R-Ky., didn't include such aid in his latest “skinny” pandemic package.

The first round of coronavirus relief that Congress passed in March contained $150 billion for state governments and $3 billion for the District of Columbia and U.S. territories. State and local government officials, however, say the guidelines for how the money can be used keeps changing and they worry about either spending it all at once or the potential that it could be clawed back.

The federal stimulus funds were only directed to states and cities with populations of 500,000 or more people, and “the principal focus has to be on how to rectify that,” said former Rep. Ed Royce, R-Calif., who left Capitol Hill last year and now works as a policy director at Brownstein Hyatt Farber Schreck. Royce, who is among the lobbyists at the firm hired by the National League of Cities in May, said he's talking to many of his former Republican colleagues.

Getting municipal governments back on their feet is “going to require considerable resources,” he said, “but the thumb was on the scale last time to such an extent that there wasn't support for local communities.”

So, we will see. There have been modest reports of renewed negotiations on further relief efforts, but tensions certainly remain high. Certainly, producers should watch these support efforts closely as they emerge, Washington Insider believes.

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