Washington Insider-- Tuesday

Administration Setting Stage for Infrastructure Bill

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

US Ag Exports Edge Down But Remained Strong In January

U.S. agricultural exports totaled $15.47 billion in January, down slightly from the monthly record of $15.91 billion registered in December. But it still marked a fourth straight month of U.S. ag exports topping $15 billion, something that has not been seen based on data going back to the 1970s.

Ag imports rose to $12.83 billion, a new record, and up from $11.65 billion in December. That left a trade surplus of $2.65 billion for January.

So far in Fiscal Year (FY) 2021, U.S. ag exports total $62.05 billion against imports of $47.46 billion for a surplus so far of $14.59 billion. USDA is currently forecasting FY 2021 ag exports at $157 billion and imports at a record $137.5 billion which would leave a trade surplus of $19.5 billion.

The situation with ag exports clearly reflects China's stepped-up purchases (and shipments) of U.S. ag goods and has translated into U.S. ag exports above $15 billion for four straight months.

But the rise in imports to a new record has come earlier than usual — typically the high-water marks for imports come during the March-May timeframe.

That suggests expectations are that the monthly trade data ahead will see the gap between export and import values continue to narrow.

USDA Reopens Comment Period On Regulation Of GMO Animals

USDA has now reopened the comment period on its notice of proposed rulemaking USDA published in December which stated USDA would be the agency responsible for regulating animals produced via genetic modification.

The comment period on USDA's notice ended February 28. But USDA today published a notice in the Federal Register that they have reopened the comment period and it will now close May 7 on the proposed rulemaking “establishing regulations for the movement of certain animals modified or developed by genetic engineering.”

The action by USDA took some by surprise as it marked the agency wresting control of the issue from FDA.

It is not clear whether the reopened comment period reflects any potential shift back to FDA on the topic.

Washington Insider: Administration Setting Stage for Infrastructure Bill

The Washington Post is reporting this week that White House is not shying away from extolling the implications of the recent $1.9 trillion coronavirus relief bill — one of the most expensive recent pieces of legislation in terms of its single-year impact.

Instead, we are already seeing an enthusiastic pitch for spending that will set the stage for President Joe Biden's wide-ranging jobs and infrastructure bill that's expected to come next — with an even higher price tag, the Post says.

The approach is a departure from the Obama-Biden approach, as White House Press Secretary Jen Psaki recently noted. She said that administration had insufficiently explained "to the American people the benefits" from the stimulus passed in the 2009 economic crisis "in terms that people would be talking about at their dinner tables."

The Post says the new proposals will “also reflect the evolution of the politics on deficit spending and diminished potency of attacks on federal spending programs. “Even though deficits are higher this time around, centrist Democrats are more unified behind passing the measure and the GOP rejected it "but in a more muted fashion than in 2009," the report said.

However, the Post also argues that the infrastructure package “is likely to be a harder sell.” Democrats are considering as much as $3 trillion in new spending for the cornerstone of the president's "Build Back Better" program. It will need to clear 60 votes in the divided Senate and Republicans, who criticized Biden for ditching his bipartisan approach to pass the COVID relief bill without any Republicans, are describing the infrastructure plan as "bad politics" and "wildly expensive" and are indicating they eventually intend to campaign against it.

Democrats, by contrast, plan to go on the offensive — and to argue that the relief package is badly needed and overwhelmingly supported by an American public amid a health crisis that's killed 524,000 people in the U.S.

The Post said that Democrats claim that "everything we are seeing in our polling” is that the Build Back Better framework, including its emphasis on clean energy investments, is as popular as the American Rescue Plan has been.

“If Republicans are as obstructionist about that as they were about the rescue bill, they will pay a similar political price," the report said.

Looking back, Democrats also argue that former President Trump upended the GOP's commitment to smaller deficits over the course of his four years in the White House. "It's been a major shift. People have gone from being anti-government to beyond being even neutral, to believing that the government “has to help us,” former Congressman Barney Frank, D-Mass., told the Post.

"You have a new consensus in America — that the government has an important role. For the first time in my lifetime, people are saying that the government has done too little rather than doing too much," Frank said.

The Post also reported that Democratic lawmakers and aides say they have heard very few complaints from constituents about “concerns that the relief plan will drive up the deficit. Even senators representing states that President Trump won by huge margins, such as Jon Tester, D-Mont., have gone along with the bill's price tag," the article said.

The Post also notes that former Obama adviser Dan Pfeiffer called the plan a "huge accomplishment" and that Democrats will get credit for doing the right thing and Republicans will only get blame for doing the wrong thing if people know about it," Pfeiffer wrote in his newsletter.

The Post says that the White House is glossing over disputes over the minimum wage and unemployment insurance that showed cracks in Democrats' narrow majority — and argue that President Biden has no plans of resting on any laurels. "There's still much more to be done and absolutely no room for complacency," the White House wrote. "We're racing to finalize passage of this bill, and the President looks forward to signing this into law. And then the real work will begin."

The Post article also included what it called a “reality check, the real disagreements between the Democratic Party's liberal and centrist wings, as well as Biden's instincts for procedure and bipartisanship.

These and other disputes over the past week on issues ranging from the minimum wage to a new budget director also provided fresh warning signs for the rest of the administration's priorities, which will require a unified Democratic Party and little room for error against Republican opposition," the Post noted.

So, we will see. Crafting an infrastructure bill that is anywhere near as widely supported as the COVID relief bill has been will be extremely tricky and will certainly attract more bitter opposition — as well as new support. This will be a program that will directly affect producers' interests and which should be closely watched as the effort gets underway, 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.

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