Washington Insider-- Wednesday
Senate Parliamentarian Ruling Favors Democrats
Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.USDA Reopened CFAP Signup
USDA announced that with updates to the Coronavirus Food Assistance Program (CFAP), signup for CFAP 2 restarted April 5 and will run at least 60 days.
CFAP updates include an increase in CFAP 1 payments for cattle which will total more than $1.1 billion for over 410,000 producers. An additional CFAP 2 payment of $20 per acre for producers of eligible flat-rate or price-triggered crops will total more than $4.5 billion to over 560,000 producers.
USDA said it will also process eligible payments for CFAP Additional Assistance (CFAP-AA) and will finalize routine decisions and minor formula adjustment on applications and begin processing payments for certain applications filed for the program.
USDA also said it would earmark at least $6 billion for new programs using funding from the Consolidated Appropriations Act approved in December. However, the agency did not detail yet what form the assistance will take beyond a broad list of commodities and other areas the program will address -- Pandemic Assistance for Producers. The assistance is also expected to come for biofuel producers who have so far not been deemed eligible for any USDA assistance.
USDA is currently accepting proposals for cooperative agreements to provide outreach and technical assistance to socially disadvantaged farmers and ranchers.
Biden To Tap Bianchi For USTR Post
Bloomberg reports that President Joe Biden will likely name longtime aide and Obama administration veteran Sarah Bianchi as deputy U.S. Trade Representative (USTR).
Bianchi is a senior managing director at Evercore ISI International and has previously worked for BlackRock and Airbnb. She is also chair on the advisory board of the Biden Institute at the University of Delaware.
A decision is not yet final, and Bianchi is still being vetted, the report said.
During the second term of the Obama administration, Bianchi served as deputy assistant to the president for economic policy and director of policy for then-Vice President Biden.
Washington Insider: Senate Parliamentarian Ruling Favors Democrats
Bloomberg is reporting this week that the prospects for President Joe Biden's economic agenda could be enhanced by a new ruling from the Senate parliamentarian that opens the door to passing multiple additional bills this year without Republican support.
A spokesman for Senate Majority Leader Chuck Schumer, D-N.Y., said on Sunday that Parliamentarian Elizabeth MacDonough has ruled Democrats could enact another reconciliation package by revising the budget blueprint the Democratic Congress adopted earlier this year. The ruling "allows Democrats additional tools to improve the lives of Americans if Republican obstructions continue," said the spokesman, Justin Goodman.
Goodman said no decisions have been made on how to move Biden's agenda, but called the decision nonetheless "an important step forward" and "that this key pathway is available to Democrats if needed."
Senate Finance Chairman Ron Wyden, D-Ore., praised the ruling. "The American people want bold action to address our country's many challenges, and Democrats now have more options to overcome Republican obstruction and get things done," he said.
Biden's $1.9 trillion coronavirus relief package passed using the budget reconciliation process, which bypasses the 60-vote rule required to pass most legislation in the Senate.
The Democrats' plan released over the weekend and Biden's corporate tax proposals last week are designed to help raise revenue for the administration's sweeping $2.25 trillion infrastructure plan. Both mark a shift from the 2017 tax law, which dramatically lowered corporate tax rates and eased rules in the name of making U.S. companies more competitive globally -- but which both Biden and Senate Democrats say has given incentives for companies to ship jobs overseas.
However, the plan proposed by Wyden, Sens. Sherrod Brown, D-Ohio, and Mark Warner, D-Va., doesn't call for an increase in the corporate tax rate, as Biden's proposal does. The Senate plan would also retain in altered form some provisions of the 2017 law that Biden apparently wants to scrap.
The tax plan the administration laid out last week would likely hit technology and pharmaceutical companies particularly hard, although the challenge for legislators would be to minimize loopholes and thus diminish the impact, tax experts said. Much of the most valuable assets at pharmaceutical and tech companies are intellectual property, like patents and algorithms -- intangibles that make it easier for them to structure global operations in a way to minimize tax costs.
Both Republicans and Democrats have sought to bolster the U.S. tax take from companies' overseas operations and President Trump's 2017 overhaul included measures to do that. Biden's plan takes a tougher approach, with a 21% minimum tax on foreign profits and a 15% minimum levy on profits reported on financial statements. It limits companies from using credits for research and development costs and deductions for paying employees in stock. The provisions -- part of the administration's plan to finance a $2.25 trillion infrastructure package -- mean that tech and pharmaceutical companies could lose many of the tax-planning tools that allowed them to pay low rates for years.
In the meantime, in other news, Bloomberg noted that nuclear talks between Iran and world powers began their most serious attempt yet to resurrect a troubled deal, with negotiators from the U.S. and Islamic Republic gathered at the same venue for the first time since the U.S. withdrew from the earlier deal. Diplomats arrived at Vienna's Hotel Imperial this week for the talks, which may extend through the end of the week if progress is made.
Iranian and U.S. negotiators aren't expected to speak directly, reflecting the deep distrust they will have to overcome.
Also, U.S. climate envoy John Kerry is in New Delhi this week to push Prime Minister Narendra Modi's government to boost its climate ambitions as it considers announcing a net zero target ahead of a virtual summit later this month. The visit comes ahead of a meeting of leaders from 40 nations organized by President Biden that will run from April 22-23 aimed at galvanizing efforts to commit to more ambitious climate change mitigation targets, at a time of rising pressure on nations to consider net-zero greenhouse gas emissions targets after China announced its plan last year.
Kerry met in India on Monday with Russian Foreign Minister Sergei Lavrov to discuss climate issues. The brief talks in New Delhi came as the U.S. is seeking the participation of the leaders of Russia and China, along with dozens of others, in the global summit on climate change later this month. So far, the Kremlin hasn't said whether President Vladimir Putin will attend.
Finally, Bloomberg says Fed Chair Jerome Powell will attempt to forecast Black unemployment in the near future. This suggests that Wall Street economists will need to try their hand at forecasting new variables -- like the Black unemployment rate. That shift in focus could itself contribute to the outcome that the Fed chair says he wants: an economic expansion reaching corners of the labor force that have been slower to recover in the past.
So, we will see. The new administration is attempting to apply new tools and stronger approaches to a number of social objectives, although the toxicity of the Washington climate remains very high. These are fights and concerns that producers should watch extremely carefully as they emerge, Washington Insider believes.
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