Washington Insider-- Wednesday

Review of Main Potential Policy Changes Under Biden

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

CFAP 2 Payments Near $12.5 Billion

Payments under the Coronavirus Food Assistance Program 2 (CFAP 2) totaled $12.47 billion as of December 13, including $6.02 billion in acreage-based payments, $3.3 billion for livestock, $1.98 billion in sales commodities, $1.13 billion for dairy, and $45.0 million for eggs/broilers.

USDA said that 838,689 applications were approved. Payments for nine commodities total $100 million or more include corn ($3.29 billion), cattle ($2.69 billion), sales commodities ($1.91 billion) soybeans ($1.26 billion), milk ($1.13 billion), wheat ($681.5 million), hogs/pigs ($522.2 million), upland cotton ($290.3 million) and alfalfa ($135.0 million).

Payments in nine states total $500 million or more are led by Iowa ($1.12 billion), California ($894.8 million), Nebraska ($823.2 million), Minnesota ($795.0 million), Illinois ($777.9 million), Texas ($645.5 million), Kansas ($637.1 million), South Dakota ($542.4 million), and Wisconsin ($504.5 million).

Under the CFAP 1 effort, payments totaled $10.53 billion with 652,179 applications approved.

USDA Chief Economist Johansson To Depart, Replaced By Former World Board Chief Meyer

USDA Chief Economist Rob Johansson will leave his post at USDA at the end of January to become Associate Director of Economics and Policy Analysis for the American Sugar Alliance, USDA Secretary Sonny Perdue announced Monday.

And, former World Board chairman Seth Meyer, currently the associate director for the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri, will become the new USDA Chief Economist. The move had been rumored previously first reported by Pro Farmer.

Johansson will work alongside American Sugar Alliance's Director of Economics and Policy Analysis, Jack Roney, to provide domestic and international sugar market analysis and evaluate the farm and trade policies that affect U.S. sugar producers. Roney, who has worked with the industry for more than 30 years, plans to retire in August 2021, at which time Johansson will assume the Director role.


Washington Insider: Review of Main Potential Policy Changes Under Biden

Perhaps the main political game in Washington these days is to guess what the new administration's main policy changes will be. First of all, following Monday's Electoral College vote, the press is widely reporting that the president-elect's top advisers are convinced that he will enter the White House with a “clear mandate” for change.

“Joe Biden won decisively,” campaign manager Jen O'Malley Dillon, who'll join the Biden White House as deputy chief of staff, said. “If you look across any metric that we could put together, it is hard to see anything but a historic victory for the president-elect.”

Campaign chief strategist Mike Donilon pointed to a post-election poll from Gallup that put Biden's approval rating at 55%. “There's a very strong story that is running through this country, which is the country wants to come together. And the president-elect is determined to lead the country to do that,” said Donilon, who'll be a senior White House adviser.

Bloomberg, and others, are attempting to assess expectations for expected policy shifts by the new administration and are reporting, that because so many of President Donald Trump's initiatives were accomplished by executive order, a number can be changed quickly. Fighting the pandemic and stimulating the economy are big, immediate challenges.

However, President-elect Biden's bolder ideas face uphill battles in a closely divided U.S. Senate, so most analysts are offering a “partial tally of his goals,” at this time.

Perhaps the broadest of these is the way “America powers itself,” These changes are seen as a “costly, heavy lift” to get through Congress, even as they are seen as a good way to stimulate the economy.

Clearly, the new administration's climate agenda is seen as driving its approach to numerous energy issues, many of which face risk of rejection or longer approval times.

Perhaps first, the new administration is expected to rejoin the Paris Agreement on global warming through which almost 200 countries have pledged limits on emissions of carbon dioxide and other greenhouse gases. It also likely would put in place efforts to make the U.S. electricity system carbon-free by 2035, meaning if there are any emissions, they will be captured. That will require much more solar and wind power and a revamp of the electrical grid since coal and natural gas still produce more than 60% of U.S. electricity.

Another major change would affect immigration, which Biden sees as “an irrefutable source of our strength.” He can tweak some of those policies on his own, but his more ambitious plans would require the approval of Congress, which hasn't passed a major immigration law since 1986.

The new administration is expected to stop spending on a U.S.-Mexico border wall and direct funds instead toward higher-tech border enforcement. In addition, it likely would raise to 125,000 the number of refugees allowed into the U.S. in 2021, up from the current cap of 18,000 in 2020. In addition, it would be expected to increase the number of employment-based visas beyond the current annual cap of 140,000.

And, it likely would restore protections blocking deportation of 660,000 undocumented immigrants brought to the U.S. as children, a group known as Dreamers — and it would be expected to create a pathway to citizenship for the estimated 11 million undocumented immigrants living in the U.S.

On the matter of taxes, the new administration says it will attempt to raise taxes on several fronts to finance its domestic agenda but that only people earning $400,000 or more would pay a higher amount. Bloomberg notes that the best chance of implementing the tax-hike plan would be if Democrats win in the 2022 congressional midterm elections.

Biden sees the U.S. “once again at the head of the global policy debate, leading the world to address the most urgent global challenges.” In addition, the president-elect has vowed to recommit the U.S. to multinational institutions, including the North Atlantic Treaty Organization, and it would revoke the current plan to quit the World Health Organization.

However, don't expect a swift reversal of Trump's “America First” policy on trade, Bloomberg says. “There is no going back to business there,” it noted. However, it expects to re-evaluate Trump's tariffs on Chinese goods and to work with U.S. allies, with the goal of exerting “collective leverage” to force China to change its economic practices.

Biden has promised union members he'd be the “strongest labor president you've ever had.” And, on some key social issues, while serving as vice president, he got out ahead of President Barack Obama in publicly supporting same-sex marriage. He promised to extend existing civil rights laws to ban discrimination in employment, housing and other areas against LGBTQ Americans—and, he would give the 21 million Americans who work for the federal government and state governments the right to unionize, which currently exists only in some states.

There is much more being considered, including the plan to more than double the federal minimum wage in stages to $15 by 2026, up from $7.25, where it was set in 2009 — and, the almost casual promise to spend $50 billion in the first year to repair roads, highways and bridges.

However, there almost always is a “learning period” for new administrations during which the newcomers find that many more of the changes they have promised fit into the “slow and difficult” category than are “quick and easy.” This is a sorting process producers should watch very closely as the debate and implementation process evolves, Washington Insider believes.

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