Washington Insider -- Friday

Hope for an Infrastructure Deal

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


EPA will conduct public information gathering sessions this summer and fall relative to its plans to revisit the navigable waters rule, Radhika Fox told lawmakers during her confirmation hearing to be Radhika Fox's confirmation hearing before the Senate Environment and Public Works Committee to be the assistant administrator for the EPA's Office of Water.

She said EPA will seek to learn from the "wisdom, the voice, and the lived, practical experience of people in complying with our rules." That echoes remarks from EPA Administrator Michael Regan who said the agency was seeking to revisit the issue and he also has pledged EPA will not keep the Trump version of the rule in place nor will they return completely to the Obama-era Waters of the U.S. (WOTUS) rule.

"Administrator [Michael] Regan and I want an enduring definition of waters of the U.S., one that can withstand administration changes," she added.

The WOTUS rule was a flashpoint for many in U.S. agriculture and fed the Trump replacement of the rule. Ag interests will be following the process closely to make sure that a return to the Obama-era rule does not unfold.



U.S. Trade Representative Katherine Tai spent much of her appearance this week before the Senate Finance Committee defending and explaining the administration's newly adopted position of backing a waiver of intellectual property (IP) rules at the WTO relative to COVID vaccines.

Republican lawmakers took the greatest exception to the shift, warning of what they viewed as an action to turn over U.S. IP to foreign countries, including Russia and China. While Tai did not specifically address the concerns relative to China and Russia, she continued to frame their administration's stance as one of wanting to expand COVID vaccines and save lives. Ag trade issues did not get a lot of focus in the session and even China was not a major attention point for lawmaker questions.

More attention was put on issues with Mexico and Canada, ones that Tai pledged would be raised next week at a meeting of the U.S.-Mexico-Canada Agreement (USMCA) Free Trade Commission. Those include Mexico's announced ban on glyphosate, GMO corn and softwood lumber and dairy issues with Canada.

On China, Tai reiterated that the U.S. is continuing to approach the situation by engaging allies and she also referenced the top-to-bottom review of U.S. trade policies with China.

Tai still has not shed a great deal of light on the Biden administration's trade focus, including on a U.S.-UK trade deal. She did acknowledge there are still "very critical issue areas" that are open in those negotiations, and there is "quite a road to go there." That suggests there is not yet a focus on pushing those negotiations forward as she related she is still wanting to think through how to construct such a trade accord.



Republican senators emerged from a meeting with President Joe Biden expressing some optimism on the prospects there could be a bipartisan deal on infrastructure.

Republicans have resisted Biden's plan for $2.25 trillion for "infrastructure," arguing the package proposed by the White House is not just limited to infrastructure.

Sen. Shelly Moore Capito, R-W.Va., has emerged as the "point person" on the matter for Republicans having publicly called for Biden to listen to Republicans on the situation even when members of his own party are urging the president to go it alone and let the party use the budget reconciliation tool to get it done.

Under budget reconciliation, it removes the requirement a package get 60 votes in the Senate in order to pass. Given the 50-50 margin in the chamber, it is an understandable push.

A bipartisan counter-offer to Biden of $568 billion in infrastructure spending -- a package compiled by not just Republicans -- was rejected out of hand by most Democrats.

But Biden agreed to meet with the lawmakers to see if and what kind of a deal could be reached with Republicans. And he has done so with some in his party warning they won't sit by and let Republicans negotiate and negotiate on the topic. Some Democrats believe Republicans would deploy that tactic only in the end to say no deal could be had.

But Republicans were not disheartened after their session with Biden at the White House. "We think this infrastructure package can carry forward," Capito said. "The president has asked us to come back and rework an offer so that he can then react to that, and then re-offer to us."

Biden himself was positive coming out of the session. "We had a very, very good meeting," he told reporters in the Rose Garden, according to Bloomberg. "It was great to be back with so many of the colleagues that I had served with in the Senate. And I am very optimistic that we can reach a reasonable agreement. But even if we don't, it's been a good faith effort that we started."

But the road ahead remains a rocky one potentially, with Senate Majority Leader Mitch McConnell, R-Ky., emerging from a Wednesday session with Biden as saying the GOP has a "red line" on the Biden proposal to use an increase in corporate taxes as one of the ways to pay for the infrastructure deal. Even moderate Sen. Joe Manchin, D-W.Va., has expressed resistance to the 28% corporate tax rate proposed by Biden.

Manchin has favored a tax rate no higher than 25% on companies and Biden recently said he was open to a discussion on that tax level.

And there are signs, Bloomberg said, that Biden may be willing to break the package up. "There are increasing signs the bill would be split up if a bipartisan agreement on some infrastructure measures did emerge," Bloomberg said. "That would leave Biden to try to advance some or all of the rest of his proposal without Republican support."

But what appears more and more likely is that to get bipartisan support for an infrastructure plan, there may need to be a refocusing of the effort on the traditional definition of infrastructure -- roads, bridges, railroads, locks and dams and the like.

The crack that appeared in one of the supports on a key bridge on I-40 that crosses the Mississippi River could become a factor in the debate. While the bridge has been closed indefinitely, it means there will be automobile and truck traffic that get diverted to other routes to cross the river. But the other key is that the Mississippi River has also been closed to barge traffic, right at a time when U.S. ag products are being moved to export locations.

So we will see. Infrastructure has long had an air of bipartisanship to it. And there are signs that could be the case this time around. Given the importance for agriculture of infrastructure to get their products to market and export channels, this situation needs to be watched closely, 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.

If you have questions for DTN Washington Insider, please email edit@dtn.com