Lawmakers face a packed agenda when the new Congress begins on Thursday, starting with finding a resolution to the government shutdown that hit USDA, the Interior Department and other departments and agencies that don't have their fiscal 2019 spending allocations yet.
Once beyond the shutdown, lawmakers will face a deadline by this summer for increasing the debt ceiling, and they will need to agree on budget caps for fiscal 2020 so House and Senate appropriators can start writing agency spending bills.
President Donald Trump, meanwhile, is asking Congress to approve his revisions to the North American Free Trade Agreement, and there are hopes that Trump can agree with lawmakers on a bipartisan infrastructure package, a major piece of unfinished business from the first two years of his term.
Finding agreement on any of these issues won’t be easy: Democrats will take charge of the House on Thursday for the first time since 2010 and plan to quickly initiate a series of investigations of administration decisions and actions. Republicans, meanwhile, will tighten their control on the Senate by increasing their majority from 51 to 53 seats.
House Democrats will force a vote Thursday on an omnibus spending bill that would fund through Sept. 30 USDA, Interior and other departments that are currently shut down because they don't have FY19 spending bills enacted. The Democratic legislation is based on spending bills that passed the Senate in 2018, but Senate Republicans will likely oppose the measure since it won't meet Trump's demands for border wall funding.
The issue of the debt ceiling and the FY 2020-21 budget caps could get rolled into a single deal. Pressure on lawmakers to agree on new spending caps will be intense, since the alternative is allowing automatic cuts of about 10 percent to take effect under the 2011 budget law, said Oklahoma Rep. Tom Cole, a senior Republican on the House Appropriations Committee.
The FY20 appropriations process "will be a fiasco until we get a deal on budget caps,” said Randy Russell, a longtime lobbyist for food and agricultural interests.
Here is a look at other issues facing the new Congress this year:
Tariffs, House Democrats pose hurdles for new NAFTA
Leaders from the U.S., Mexico, and Canada sign off on the new USMCA trade deal.
A great deal of fanfare was made when the presidents of all three NAFTA countries signed the revamped and renamed trade pact on the sidelines of a G20 meeting in Buenos Aires last year, but ratification of the United States-Mexico-Canada Agreement is far from assured because legislatures in all three countries will have to approve the pact.
Nancy Pelosi, who is expected to be elected House speaker, has conditioned House action on the deal on Mexico enacting tougher labor standards. And Trump’s refusal to drop trade tariffs on Mexico and Canada presents a major barrier.
Those “section 232” tariffs on steel and aluminum go beyond just angering Mexico and Canada. The retaliatory tariffs – aimed mainly at U.S. agricultural commodities – nullify many of the benefits the three-nation trade deal provides, say analysts and lawmakers.
“As long as Section 232 tariffs on steel and aluminum imports from Canada and Mexico remain, U.S. farmers and others facing retaliation, along with the American businesses that rely on those imports, will be unable to realize the full potential benefits of USMCA,” said the incoming chairman of the Senate Finance Committee, Iowa Republican Chuck Grassley.
Grassley, who has already announced he is “not a fan of tariffs” and sees them as taxes “on U.S. consumers and businesses,” indicated Congress needs to reassert itself and take on more leadership over tariffs and international trade that it has ceded to the executive branch. “We collectively have a responsibility to ensure that U.S. farmers, ranchers and businesses face minimal uncertainty from updating NAFTA,” he said.
Infrastructure has wide appeal, but how to pay for it?
An infrastructure initiative went nowhere in the last Congress in part because of divisions over how to pay for it. The White House wants to rely heavily on private investment, but rural lawmakers, including Senate Environment and Public Works Chairman John Barrasso, R-Wyo., say that isn’t practical in rural areas.
Enter the new chairman of the House Transportation and Infrastructure Committee: Peter DeFazio of Oregon. He’s looking to move a bill within the first half of this year and wants the federal government to issue bonds and raise fuel taxes to pay for billions in new projects. He says it will be hard for the GOP Senate to ignore a House-passed infrastructure bill. “If the president takes the lead, if he wants infrastructure investment, we can get it done,” DeFazio said.
DeFazio says that bonds can provide the up-front funding needed to get projects going quickly, but the long-term solution will require replacing the existing fuel tax with a tax based on mileage driven.
A senior Republican on that committee, Bob Gibbs of Ohio, says it isn’t politically feasible to replace the fuel tax in this Congress, but he thinks there could be support for testing with truckers a tax based on vehicle miles driven. “The trucking industry supports more revenue if they know where it’s going to go,” Gibbs said.
Southeast producers press for disaster aid
Producers in Georgia and other states hammered by the 2018 hurricanes are seeking a special package of disaster aid, and want to raise some of the limits set in a 2017 program. In December, the House GOP leadership tried to muster Republican support for a stopgap spending bill by attaching a straight extension of the Wildfire and Hurricanes Indemnity Program created for the 2017 disasters.
But Georgia lawmakers say WHIP is insufficient to cover losses from Hurricane Michael, including to cotton crops and pecan orchards. Some cotton growers didn’t purchase crop insurance because they thought that irrigating their crops would cover their risks, while others with insurance lost crops with yields that were much larger than the average production history (APH) used to calculate coverage.
Rep. Sanford Bishop, the Georgia Democrat who will chair the House Agriculture Appropriations Subcommittee in the new Congress, is seeking a significant expansion in assistance.
One change would increase the limit on recovering crop losses from 85 to 90 percent for producers with crop insurance and from 65 percent to 70 percent for growers without it. Bishop also wants a lower threshold of 7.5 percent for pecan tree mortality to qualify for aid under the Tree Assistance Program created by the 2014 farm bill. The limit has been 15 percent.
Sen. David Perdue, R-Ga., has been pushing hard for the aid package in the Senate.
Farm bill implementation, easements to get scrutiny
The incoming chairman of the House Agriculture Committee, Rep. Collin Peterson of Minnesota, has signaled to USDA that he plans to keep close watch on how the 2018 farm bill is implemented, though he hasn’t singled out a particular program he is concerned about. Peterson chaired the committee when the 2008 farm bill was written and says that USDA sometimes failed to implement it the way Congress intended.
Rep. Collin Peterson, D-Minn.
Peterson also plans to put a spotlight on the use of permanent easements in conservation programs. He has long been concerned that landowners under financial pressure have put acreage in permanent easements, tying the hands of later generations. Public access to land in permanent easements also has been an issue for him.
“I am going to expose some things going on in this easement stuff that I think (is) wrong,” Peterson said in an Agri-Pulse Open Mic interview.
Opponents of USDA relocations look to head them off
House Democrats will try to do what they can to stop Agriculture Secretary Sonny Perdue from moving the Economic Research Service and National Institute of Food and Agriculture.
The House Agriculture Appropriations Subcommittee, led by Bishop, will likely take the lead in fighting the relocations.
Bishop and Democratic colleagues on that panel as well as the House Agriculture Committee introduced a bill last month to block the moves. The bill is intended to send a message to the administration about Democratic opposition to the plan. Steny Hoyer of Maryland, who will be House majority leader in the new Congress, also is a cosponsor.
The battle could come down to whether Bishop and his House allies can muster enough Republicans support to use USDA’s FY 20 spending bill to prevent Perdue from carrying out the agency moves. Congressional hearings will be part of the Democratic strategy. “Hearings would give a forum for (opponents of the relocations) to bring forth their concerns,” Bishop said.
Perdue has given no sign of backing off. On Dec. 21, USDA announced the selection criteria that will be used in evaluating the 136 expressions of interest the department has received from various communities and areas.
Democrats to put focus on climate change
Expect to hear a lot about this issue over the next two years. Senate Agriculture Chairman Pat Roberts, R-Kan., told Agri-Pulse that he plans to hold a hearing or roundtable on the issue – he hasn’t decided yet on the format – to examine the impact on agriculture. “I think we’ve got to lean forward and take a look at some of these reports” on climate change, he said.
Peterson, who helped round up rural Democratic support for his party’s cap-and-trade bill in 2009, a top priority at the time for Pelosi, has no plans for House Agriculture to take up the issue next year. He downplays the idea that agriculture could play a significant role in reducing greenhouse gases, but he may have to address the issue anyway. “There is going to be pressure on us on the committee to try to do something within agriculture as it relates to climate change,” Peterson said.
Nevertheless, Democrats are reviving a special committee on climate policy that Republicans disbanded after they took over the House in 2011. Rep. Kathy Castor, D-Fla., will chair the committee.
Major climate legislation has no chance of getting enacted with Trump in the White House and Republicans in control of the Senate, but Democrats will be setting the stage for action if they win control of Congress and the White House in 2020.
With that in mind, Ferd Hoefner of the National Sustainable Agriculture Coalition says his group will be using the new Congress to prepare for 2021, when climate legislation as well as revisions to the Clean Water Act could be on the table.
Unfinished tax business: Lapsed biofuel credits
The biodiesel industry has gone a full year without its $1-a-gallon tax credit, which expired at the end of 2017. The House Ways and Means Committee crafted a multi-year extension and phaseout of the biofuel subsidy and included it in a broader tax bill that the full House passed along party lines in December.
Grassley says it will be a high priority of his as chairman of Senate Finance to reinstate the biodiesel credit, but he’ll need cooperation from the House, which will be under Democratic control. Also expired are tax credits for alternative fuel equipment, including ethanol blender pumps, and for biofuels made from corn cobs, wood chips and other sources of plant cellulose.
House Democrats have additional priorities on tax policy. They will try to rewrite provisions of the 2017 Tax Cuts and Jobs Act, one of Trump's signature achievements so far. But with Republicans in control of the Senate, House Democrats may not be able to do more than score some points with voters heading into the 2020 presidential election. At the top of their agenda is the new $10,000 cap on state and local income tax deductions, which hits many Democratic districts hard on the east and west coasts.
But Texas Rep. Lloyd Doggett, who is in line to chair the House Ways and Means subcommittee on tax policy, says the tax extenders may be considered as a separate bill. That would prevent the biofuel tax credits from getting tangled up in a partisan fight over amending the 2017 tax bill.
Bill Tomson contributed to this report.
For more news, go to Agri-Pulse.com.
