Washington Insider-- Thursday

Stimulus Fight Resumes

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

Groups See Potential Farmer Revenue Stream In Climate Efforts

Major farm and environmental groups announced the formation of the Food and Agriculture Climate Alliance, a coalition focused on pushing climate policy priorities.

The American Farm Bureau Federation, Environmental Defense Fund, National Council of Farmer Cooperatives, and National Farmers Union co-chair the alliance.

The group established more than 40 policy recommendations on soil health, livestock and dairy, forests and wood products, energy, research, and food loss and waste for Congress and the presidential administration. The plan unveiled by the group contains objectives and specific federal policy moves the groups view as critical to achieving those goals.

Explaining the catalyst for creating the alliance, AFBF President Zippy Duvall said the groups were able to break through “historical barriers” and did so with the recognition that “our collective voices are stronger than our individual voice” for advancing new climate policies.

The three guiding principles of the joint recommendations are to support voluntary, market- and incentive-based policies, advance science-based outcomes and promote resilience and help rural economies better adapt to climate change, the alliance said, with six key areas of focus: Soil health, livestock and dairy, forests and wood products, energy, research and food loss and waste.

The groups urge a “menu of voluntary federal policy options” to encourage carbon sequestration in the soil, including a new tax credit modelled after the existing “45Q” carbon sequestration credit and a new carbon bank backed by USDA's Commodity Credit Corporation (CCC).

The CCC carbon bank proposal echoes a proposal included in Joe Biden's campaign climate plan.

The key for farmer support for any such plan will be how a carbon market is established.

OMB Completes Review On USDA Plan For Child Nutrition Program Flexibilities

The Office of Management and Budget (OMB) has completed its review of a proposed rule from USDA that identifies flexibilities for milk, whole grains, and sodium requirements under Child Nutrition Programs.

The plan was forwarded to OMB October 28 and one meeting was scheduled on the rule—with the Center for Science in the Public Interest (CSPI) and NANA (National Alliance for Nutrition and Activity) coalition.

The proposed rule comes after a court in April sent the final rule released in 2019 back to USDA for “further proceedings.” CSPI was party to the suit on USDA's final rule, arguing the final rule did not reflect a logical outgrowth of the interim final rule originally issued by USDA.

The U.S. District Court in Maryland agreed, saying the final rule was not keeping with the “original scheme” of the notice and comments that were filed on the interim final rule, as that “spoke exclusively to terms of delaying compliance requirements, not abandoning the compliance requirements altogether.”

The final rule delayed the compliance date for some provisions and eliminated another along with changing requirements on whole grains so that only half of the grain-based foods needed to be whole-grain-rich.

It is not clear when the proposed rule will be released, but child nutrition advocates like CSPI and others will obviously monitor the situation closely to make sure USDA followed the court action.


Washington Insider: Stimulus Fight Resumes

Bloomberg is reporting this week that to nobody's surprise, Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., on Tuesday asked Senate Majority Leader Mitch McConnell, R-Ky., to resume talks on an additional stimulus package. However, McConnell is insisting on a “targeted package,” Bloomberg said.

“We write to request that you join us at the negotiating table this week so that we can work towards a bipartisan, bicameral COVID-19 relief agreement,” Pelosi and Schumer wrote. They said they were encouraged by McConnell's comments after Election Day calling for stimulus and saying “it's a possibility we will do more for state and local governments,” one of the key areas of disagreement.

McConnell's office, asked to respond to the call for talks, referred to the GOP leader's comments from earlier on Tuesday, when he reiterated his support for a bill of about $500 billion.

The Democratic call for talks with McConnell followed the decision by the White House and President Donald Trump to pull back from their involvement after months of negotiations failed to yield a deal. The administration had offered to back a $1.9 trillion package before the Nov. 3 election but the difference between the two sides continues to be wide as Democrats have been demanding $2.4 trillion.

“Millions of unemployed Americans and those facing eviction and hunger demand action from their leaders. The time to act is upon us like never before,” Pelosi and Schumer wrote.

Senate Republicans in July had put forward a $1 trillion stimulus bill that included direct stimulus checks, only to pare that back as the economy began to bounce back. They have been especially resistant to Democratic demands for more than $400 billion in aid to state and local governments with budget shortfalls due to lost revenue during the pandemic.

President-elect Joe Biden on Monday called on Congress to act on a stimulus bill this year, before he is inaugurated, but forecasters see that as unlikely. “I am open to a targeted bill roughly of the amount that we recommended, a half trillion dollars, which is not nothing,” McConnell said Tuesday. He also reiterated his call for liability protections from COVID-19 lawsuits, which Democrats have opposed.

Also, some virus-related relief could end up attached to the must-pass spending bill needed to keep the government open after Dec. 11. House Democrats and Senate Republicans are negotiating behind closed doors this week on an outline for the 12-part $1.4 trillion bill and are reporting that progress is being made.

Treasury Secretary Mnuchin had led talks with Democrats on new stimulus packages before the election. However, more recently the administration said it is stepping back and leaving those talks to McConnell. As a result, Biden emphasized with Pelosi and Schumer the “urgent need” for Congress to provide resources to deal with the pandemic, Bloomberg said.

At the same time, support for additional stimulus continues to come from Federal Reserve Chair Jerome Powell who earlier called a new fiscal stimulus package as “absolutely essential” to the U.S. economic recovery. He also argued that even if spending proved more than necessary, it “will not go to waste.”

And in a note regarding possible benefits of successful coronavirus vaccines, The Hill notes this week that while preliminary results from several highly effective vaccine candidates are boosting hopes of a quicker end to the pandemic and a faster recovery, and that “while the light at the end of the tunnel may seem brighter today than it was 10 days ago, economists fear the U.S. still has daunting obstacles in its path.”

The report notes that coronavirus cases and hospitalizations “are shattering state records across the country,” and as cases climb, unemployed workers and struggling businesses “may run out of ways to stay afloat between now and widespread distribution of a vaccine.”

This is especially true since several crucial government aid programs also are set to expire at the end of December, setting up a potential flood of foreclosures, evictions and bankruptcies. As a result, The Hill says economists are warning that if the White House and Congress are unable to bridge the gap between proposals, millions of Americans could suffer before the pandemic and economy turn around. The report cites Adam Ozimek who worries that, “If the government doesn't do more, then we could be looking at a lot more businesses going under, the recovery backtracking and heading in reverse, and a bigger economic hole to dig our way out of.” Ozimek is chief economist at Upwork.

So, we will see. The political situation is as toxic as ever even as the transition appears to be moving forward. The future roles of the government are expected to continue to be critical and should be watched closely as these debates intensify, Washington Insider believes.

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