Washington Insider - Friday

House Budget Proposal Passes

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

EPA ADMINISTRATOR SAYS AGENCY WILL CONTINUE PUSHING ITS AGENDA

Work to implement an environmental agenda focused on combatting climate change, environmental justice, farmworker protection and lead and copper drinking water rules will continue through the end of the Obama Administration, Environmental Protection Agency (EPA) Administrator Gina McCarthy told the National Environmental Justice Advisory Council.

EPA will continue to fight litigation aimed at stopping its Clean Power Plan and Waters of the U.S. rule, McCarthy said, noting that questions about the outcome "keep me up at night." She reiterated her resolve to advance climate change and other aspects of the EPA agenda, saying "anything [we] can do in the next 10 months, we're going to do it." While saying EPA will adhere to the Supreme Court stay on Clean Power Plan implementation, McCarthy made it clear that the agency will still pursue actions on climate change.

A question about farmworker protections standard for pesticides was posed to McCarthy, regarding the possible formation of a taskforce to follow up implementation of the standard. McCarthy said that she believed forming a taskforce is a "great idea."

Civil rights issues were also raised and McCarthy said that EPA is committed to a revamp of how its civil rights division operates.

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REPUBLICANS PLAN DODD-FRANK ALTERNATIVE

A Republican-generated bill to replace the Dodd-Frank financial regulations with a simpler, capital requirement-based scheme was promised by Rep. Jeb Hensarling, R-Texas, at a conference of bankers.

High, simple capital requirements will be the centerpiece of the Republican plan, Hensarling said. Other aspects of the plan including cost-benefit tests for banking rules, as well as an opportunity for banks to provide comments on Federal Reserve stress-test scenarios.

The measure will ensure Dodd-Frank is "ripped out by its roots and tossed on the trash heap of history," Hensarling pledged, and added "Washington's regulatory waterboarding is drowning community banks and small businesses."

Democrats predictably assailed the plan, with Rep. Maxine Waters, D-Calif., saying of the proposal, "we can always do more to improve our economy, but we shouldn't give a handout to big banks that helped cause the crisis in the first place."

It is unlikely the bill would advance, and the White House has vowed to block it. The high capital requirements are seen as problematic for the largest banks, though it is less likely they would have a negative effect on regional and community banks.

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WASHINGTON INSIDER: HOUSE BUDGET PROPOSAL PASSES

On the morning of March 17, The Hill reported that The House budget panel had easily cleared its 2017 spending blueprint on the evening of March 16. However, as expected, a conservative rebellion is stirring that still threatens the bill's fate. Fiscal hawks have balked at the $1.07 trillion spending levels in the bill, which are $30 billion higher than last year's, even though those figures were cemented into law last fall as part of a deal between President Barack Obama and former House Speaker John Boehner.

All but two Republicans on the House Budget Committee voted to send the bill to the floor, The Hill said, but it likely will need support from fiscal hawks in the House Freedom Caucus. On the final 20-to-16 vote, all Democrats opposed.

Without support from the 40-member House Freedom Caucus, the trillion-dollar budget proposal is expected to come up short on the House floor, since the House GOP can only afford to lose 28 votes to ensure a bill's passage without Democratic support.

Reps. Dave Brat, R-Va., and Marlin Stutzman, R-Ind., both members of the Freedom Caucus, were the only Republicans who opposed the budget blueprint on the final vote. The other five Freedom Caucus members who sit on the budget committee voted to advance the bill, though they are expected to oppose the bill on the floor.

The nine-hour budget markup was far smoother than most had expected given the Republican resistance. "I think we completed this in record time," Chairman Tom Price, R-Ga., said while members applauded as they wrapped up just before 8 p.m. on March 17. Price had expressed confidence going into the marathon markup that the committee's Republicans would help carry it to the floor, even if they opposed the overall bill.

Most of the hearing was dominated by debate on nearly 30 Democratic amendments, ranging from Flint aid to community service compensation. Rep. Debbie Dingell, D-Mich., one of the most vocal supporters of healthcare additions, lost her voice around dinnertime.

The ambitious 155-page GOP budget would repeal ObamaCare, shrink the Commerce Department, strip funding from the Environmental Protection Agency, create a pay-in structure for Medicare and give states control over the food stamps program.

It also would cut $7 trillion from the deficit over the next decade but add $89 billion more in military funding than what Obama has proposed.

Several Freedom Caucus members tried to make clear Tuesday that their decision to announce their opposition was not the end of negotiations. "It's on life support, but it's not dead," Rep. Mark Meadows, R-N.C., said March 15 of the GOP's budget plans.

Rep. Morgan Griffith, R-Va., said he and others would be willing to support the budget resolution if it was directly attached to the billions of dollars of mandatory spending cuts currently being marked up by House committees.

Those packages are expected to be combined into a legislative sidecar that would receive a separate vote the same day the House voted for the budget resolution. Still, it is not clear that that promise will be enough to carry the bill to passage, Washington Insider believes.


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