Washington Insider-- Wednesday

DTN's Washington Insider

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

CFAP 2 Payouts Climb To $13.5 Billion

Payments under the Coronavirus Food Assistance Program 2 (CFAP 2) have reached $13.50 billion as of April 25, up from $13.45 billion the prior week.

Acreage-based payments now total $6.23 billion, livestock payments are at $3.43 billion, sales commodities total $2.57 billion, dairy is at $1.21 billion, and eggs/broilers payouts are at $57.29 million.

CFAP 1 payments are now at $10.56 billion, up from $10.55 billion the prior week.

As for the CFAP Additional Assistance program, no payout information has yet been made available from USDA even as the Farm Service Agency said that actions under CFAP include processing of CFAP AA payments. "USDA will finalize routine decisions and minor formula adjustments on applications and begin processing payments for certain applications filed for this program," according to FSA.

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Census Population Shifts Will Bring More Changes In Congress

US population growth was at its slowest level since the 1930s over the past decade, according to updated Census data released Monday. The changes in population will also shift political maps, with the long-running trend of the South and West gaining population -- and congressional representation -- at the expense of the Northeast and the Midwest, is still intact.

Texas has gained two more votes in Congress and the Electoral College for the next decade, while Colorado, Florida, Montana, North Carolina and Oregon each gained one seat, based on the first set of results from the 2020 Census released Monday.

The seven states losing one vote each: California, Illinois, Michigan, New York, Ohio, Pennsylvania and West Virginia.

Census will release data later this year that will outline growth in population centers that will assist states in redrawing congressional maps.

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Washington Insider: Biden Taxes Collide with Political Reality

President Joe Biden is poised to unveil a plan that to raise taxes on the income, investments and estates of the wealthiest Americans to levels not seen in more than four decades--and that that move will trigger "intense debate in Congress about whether and how to address income inequality," Bloomberg reported.

Biden's "American Families Plan," itself featuring the biggest expansion of federal support for lower-income and middle-class Americans in decades, will be offset by a series of tax increases on the wealthy, administration officials say. The president will unveil his program during the Wednesday night State of the Union speech to Congress.

To pay for a bill that could top $1 trillion, Americans earning over $400,000 will face higher marginal income tax rates. Those taking in $1 million or more will get hit with a levy of up to 43.4% on their capital gains. The last time rates got close to that, Jimmy Carter was president.

Biden is also likely to propose increases in the number of Americans subjected to the estate tax. He campaigned on closing popular tax breaks including a provision that lets appreciated assets go untaxed when they are inherited, along with eliminating the carried-interest tax breaks – which let private equity managers cut their Internal Revenue Service bills.

Republicans are likely to oppose the tax increases en masse, but the White House is also risking a struggle with Democratic lawmakers. Some of those from New York, New Jersey and other high-tax states in particular were already mobilizing to demand relief for their constituencies even before Biden's official announcements. With the 50-50 Senate and a narrow margin in the House, long negotiations loom.

In the meantime, Republicans may be ready to back as much as $900 billion in infrastructure spending, according to a senior senator, Bloomberg says – though that would still cover less than half of Biden's proposal. "There's a deal to be done on infrastructure," Sen. Lindsey Graham, R-S.C., said on Sunday. Graham suggested "to not pay for some of the infrastructure spending immediately because I think it over time pays for itself."

There are other interesting proposals afoot--for example, President Biden is betting $100 billion he can deliver a lifeline to rural America, and a boost to the economy overall, by making high-speed internet available to all Americans. The plan could help millions, especially in agrarian states where the Democratic party's support is weakest. Estimating the precise impact, however, is seen as virtually impossible because no one truly knows how many Americans lack access to the internet.

In the meantime, there are other fights aplenty, Bloomberg thinks. One focuses on judges. However, the administration's aggressive timeline for vetting potential judges while seeking nominees who would bring experiential, racial, and gender diversity to the federal bench is proving difficult for several Democratic senators to meet, Bloomberg says,

The report notes that the once-a-decade battle to redraw the U.S. political map promises to be one of the most contentious ever when it kicks off this week, shadowed by the coronavirus pandemic and hindered by partisan divisions stoked during the Trump's presidency. The process has begun with the release from last year's constitutionally mandated count of every person living in the U.S., which happens every 10 years – numbers that are already emerging and are determining which states gain seats in the U.S. House of Representatives and which ones lose.

Meanwhile, an Arizona judge demanded more information about an audit of Maricopa County's 2020 general election results by a group called the Cyber Ninjas after the state's Democratic Party argued it was being conducted by "unqualified and completely unhinged actors." Superior Court Judge Christopher Coury in Phoenix ordered the auditors to release documents explaining their internal procedures.

Also, seven decades after the U.S. Supreme Court said the NAACP didn't have to give Alabama its membership list, so prominent liberal groups are in the unlikely position of supporting two conservative charities in a challenge to California's requirement that they disclose their top donors. In a Supreme Court argument set for this week, the Americans for Prosperity Foundation and the Thomas More Law Center will contend that California can't be trusted to keep the information private – and that it's opening up the groups' supporters to threats and harassment, much like Alabama once did to the NAACP.

After three months of vaccination across the U.S., a majority of American adults have gotten shots – and the effort will soon shift from mass inoculation to "mop-up," Bloomberg says. Over the next few weeks, what the vaccine campaign looks like is going to change dramatically.

Finally, President Biden is exploring the idea of a border adjustment tax that would slap a levy on imports from nations with weaker climate policies, according to John Kerry, the administration's special climate envoy. "President Biden, I know, is particularly interested in evaluating the border adjustment mechanism," Kerry said on Bloomberg TV. "He wants to look at that and see whether that's something that we need to deploy."

So, we will see. Clearly there are controversies to go around and a razor-thin and infinitely toxic climate over it all. A key will be whether the administration's rapid recovery hopes turn out to be true. Certainly, these are developments producers should watch closely as they emerge, Washington Insider believes.

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