House farm bill developments | Grassley to confront Pruitt at Senate hearing today
— North Korea warned it could cancel the June 12 summit meeting in Singapore with President Trump if Washington insisted on “unilateral nuclear abandonment.” The statement came hours after the North abruptly postponed talks planned with South Korea today in response to a joint South Korean-U.S. Air Force drill. In a report published earlier today in Pyongyang, the Korean Central News Agency said the drills are a rehearsal for invasion. A senior North Korean official accused Washington of trying to “impose on our dignified state the destiny of Libya or Iraq.”
“If the U.S. is trying to drive us into a corner to force our unilateral nuclear abandonment, we will no longer be interested in such dialogue and cannot but reconsider our proceeding to the DPRK-U. S. summit,” Kim Kye Gwan, a senior foreign ministry official, was quoted as saying, using the acronym for North Korea’s formal name, the Democratic People’s Republic of Korea. Kim also questioned the sequencing of denuclearization first, compensation second.
Kim singled out national security adviser John Bolton and his demands, which include a Libya-style denuclearization process and the disposal of biological and chemical weapons. “It is absolutely absurd to dare compare the DPRK, a nuclear weapon state, to Libya which had been at the initial stage of nuclear development,” Kim, who is the first vice minister at the Ministry of Foreign Affairs, was quoted as saying. Seven years after surrendering his nuclear program, Gaddafi was overthrown, then brutally killed by opponents of his regime.
Trump administration comments. Heather Nauert, a State Department spokeswoman, said North Korea hasn’t complained about the current exercises or told American officials, formally or informally, that it might cancel next month’s summit. “We are operating under the idea and notion that the president’s meeting is going forward with Chairman [Kim Jong Un] next month,” she said. She noted that Kim had previously told South Korea it understood the need for the exercises and that they were planned well in advance. White House press secretary Sarah Sanders said: “The United States will look at what North Korea has said independently and continue to coordinate closely with our allies.”
Perspective: The threat is seen as a move by North Korea's leader Kim Jung Un to gain leverage. The next move, if it comes, may be one from President Trump via a twitter blast.
— Farm bill update. The House farm bill measure is slated to begin debate in the House today,. House Ag Chairman Mike Conaway (R-Texas) talked about farm bill developments in comments Tuesday with Agri-Talk. Link. Conaway listed the biggest potential poison-pill amendment would be “trying to decimate the U.S. sugar program.” Asked why corn and soybean producers should be interested in any sugar fracas, Conaway made it clear that if you start signaling out one commodity, the debate can easily turn to other commodities. He said, “We can bring back sugar under Title I, but that is billions of dollars that we do not have.”
Conaway revealed that in a recent talk with President Trump, the president asked him, “Are you making crop insurance better” with the farm bill?, adding that Trump said, “I want it better. I want it great!” Conaway said he told the president, “Yes, sir, we are working to make that happen.”
In an interesting exchange, Agri-Talk host Chip Flory asked if Conaway had recently spoken with Rep. Collin Peterson (D-Minn.), ranking member on the House Ag panel. You can hear the pain in Conaway's voice when he said, “no” and then went on to say how closely the two worked on almost every other program in the House farm bill but food stamps. Asked if he believed House Speaker Nancy Pelosi (D-Calif.) had told Peterson he could lose his leadership post on the House Ag panel if he does not oppose the House farm bill, Conaway said he has heard the conjecture but told the Agri-Talk host he should ask Peterson that question.
Can a farm bill get through any conference committee without food stamp reform? Conaway said conference panel help will come from President Trump, who he said will urge lawmakers to put in include some reforms for food stamps.
Conaway late Tuesday said that he is still working on rounding up enough votes for the bill.
— House Rules Committee issues structured rule for farm bill debate. The House Rules Committee approved Tuesday a structured rule for floor debate of the farm bill. It also cleared the first tranche of 20 amendments allowed to be offered, approving one hour of general debate and 10 minutes per amendment. Link for details. The House will take up the farm bill, today and debate the 20 amendments, according to a notice from Majority Leader Kevin McCarthy (R-Calif.).
The Rules committee will meet again this afternoon to consider which additional amendments — of the more 107 filed by lawmakers — can be offered during the House floor debate later this week.
The full House has to pass the rule before moving forward with debate on the farm bill.
— White House backs House farm bill. The Trump administration on Tuesday formally supported the House farm bill, seeing it as a step toward "meaningful" welfare reform and a way to give farmers and ranchers certainty. The White House noted changes the bill (HR 2) would make to the Supplemental Nutrition Assistance Program (SNAP/food stamps).
The legislation, which begins debate on the House floor today, would impose new work requirements on between 5 million and 7 million SNAP recipients, tighten up eligibility rules and significantly expand work training programs at the state level.
"The administration believes that work reforms like those in HR 2 are a critical component of any multi-year farm bill reauthorization," the White House OMB said in a statement of administration policy (link). it said advisers would recommend President Donald Trump sign the bill in its current form. It said that Trump has made "modernization" of the country's "antiquated welfare system a priority." It added that the bill, “by including strong work requirements for able-bodied participants in SNAP, HR 2 takes a major step toward the president’s vision of welfare reform.”
The administration included some concerns with the bill, including that it doesn't rein in spending or do enough to reform food aid programs, which have been a target of White House budget proposals since Trump took office. "The administration is also concerned that the bill does not include additional reforms to improve the cost-effectiveness of farm and conservation programs that were proposed in the President’s Fiscal Year 2019 Budget," OMB said.
— House conservatives may link immigration reform debate and vote to fate of farm bill. Some members of the House Freedom Caucus in a Tuesday night meeting discussed withholding their votes for the farm bill unless they receive a roll call on separate legislation pertaining to DREAMers. Meanwhile, the 150-plus member-strong Republican Study Committee (RSC) circulated a memo spelling out their own criticism of the House farm bill text.
“Since [leadership] is whipping the farm bill very hard for a vote this week, we believe it’s probably time to go ahead and call the question on the Goodlatte bill as well,” said House Freedom Caucus Chairman Mark Meadows (R-N.C.), referring to House Judiciary Chairman Bob Goodlatte's (R-Va.) immigration text. “That was a topic of discussion on what would get people to ‘yes’ on the farm bill.”
GOP leaders need ample Republican support for the farm bill, since House Democrats are expected to oppose the measure.
"Many conservatives may be concerned that the bill increases mandatory spending and spending subject to appropriation," the RSC memo notes, explaining that it would increase the former by $3.2 billion from fiscal 2019 through fiscal 2023 and the latter by $24.3 billion over the same period.
The RSC memo applauds the part of the farm bill that would expand work requirements for SNAP recipients who are able to work. Last month, the RSC released a budget proposal for fiscal 2019 that called for heavy cuts to be made to a variety of farm bill programs.
— Roberts talks about Senate farm bill schedule. Senate Agriculture Chairman Pat Roberts (R-Kan.) revealed a markup date for his panel’s farm bill could be announced next week. He and ranking member Debbie Stabenow (D-Mich.) “have been meeting this week, and we’ll continue that through next week,” Roberts said, noting they two panel leaders are waiting on GOP leadership for floor time.
Roberts again stressed the bill he and Stabenow were planning to release will be bipartisan, a not-so-veiled reference to the contentious House farm bill that Democrats have overwhelming moved away from, largely due to GOP-pushed reforms for food stamps (SNAP).
— Another WSJ editorial jab at sugar program. As if on cue just ahead of expected House farm bill debate, the Wall Street Journal issued one of its many editorials against the U.S. sugar program (link). “This program is arguably the worst farm subsidy, which is saying something, featuring a menagerie of sweetened loans, restrictions on sales and import quotas for some of America’s richest people,” the editorial noted. It continued, “perhaps the worst result of the program is how the effects ripple across the supply chain and kill jobs. The program drives manufacturing jobs overseas — hello there, President Trump — where sugar inputs are cheaper.” It concludes by writing, “Republicans are struggling to get the votes for their bill, in part because they have added a modest work requirement for food stamps, which eat up about 80% of farm bill dollars. This is a worthy policy change, but Republicans would have more credibility on reforming welfare for people if they did the same for politically powerful agribusiness.”
— Grassley's anger with EPA's Pruitt increases, to confront him at hearing today. Environmental Protection Agency (EPA) Administrator Scott Pruitt today appears before the Senate Appropriations Committee's subcommittee with authority over the EPA . Pruitt will field questions not only about his requested budget for fiscal 2019, but about his controversial decisions on the Renewable Fuel Standard (RFS) and his spending and ethics controversies.
Sen. Chuck Grassley (R-Iowa) threatened to become the first GOP senator to call on Pruitt to resign. The threat was over "hardship" waivers that the EPA has been giving to fuel refineries to allow them to avoid complying with the federal ethanol mandate. He warned in a call with reporters that Pruitt had better stop giving them to refineries owned by big companies. "Well, they better, or I'm going to be calling for Pruitt to resign, because I'm done playing around with this" he said. Grassley said waivers violate promises by Pruitt and President Trump to keep the annual federal ethanol mandate at the level Congress called for in 2007, which is currently 15 billion gallons. He fears the waivers will chip away at the mandate and hurt Iowa.
"Trump was elected with an agenda, Pruitt was not elected, and it's Pruitt's job to carry out the Trump agenda," he said in a call. In a tweet, Grassley said he has “supported Pruitt but if he pushes changes to RFS that permanently cut ethanol by billions of gallons he will have broken Trump promise & he should step down & let someone else do the job of implementing Trump agenda if he refuses.”
— EPA to ask public comment on RIN credits when it releases RVO requirements. The Environmental Protection Agency will ask for public comment on whether and how to boost the transparency of biofuel compliance credits. The request will be part of a proposed slate of 2019 biofuel requirements (2020 biodiesel) now being reviewed by the White House Office of Management and Budget. The proposal is expected to be formally issued in June or early July.
Sen. Chuck Grassley (R-Iowa) said EPA Administrator Scott Pruitt already has the tools he needs to address the issue. "I don’t think they need to have any comments from anybody," Grassley said Tuesday. "Pruitt has the authority just to make it more transparent."
— Surprise? NAFTA end zone will not likely be reached by May 17. What many thought likely, several NAFTA 2.0 observers and officials from the various countries involved (U.S., Mexico and Canada) signaled that lingering issues will likely not have the parties reach an agreement before the informal May 17 deadline established by House Speaker Paul Ryan (R-Wis.).
"We don’t believe that will happen from here to Thursday,” Mexican Economy Minister Ildefonso Guajardo said. But he didn't close the door on reaching a deal by July 1, the day of Mexico's presidential election, saying, the "conditions remain to continue advancing in the negotiations."
Canadian Prime Minister Justin Trudeau said Tuesday the countries “are very close” to a deal. “There is very much an imminently achievable outcome that will be good for the U.S., Canada and Mexico,” he said, a day after he spoke by phone with President Trump on the trade pact.
The countries are divided over issues such as a U.S. demand for a minimum level of North American content to be sold without tariffs in the U.S. Mexican officials are perplexed by U.S. demands for the pact to sunset in five years, which Mexico’s Economy minister says would add uncertainty for auto makers while asking that they “change their entire business model.”
Background. Trade Promotion Authority (TPA/fast track) includes a 90-day notice to Congress before a pact is signed, with a text published at least 60 days before the signing.
Meanwhile, farm-state GOP senators from began meeting with President Trump, urging him against pulling out of the agreement, warning him that such a step would set up a confrontation with Republicans in Congress and potentially hurt the party in the midterm congressional elections, especially in farm states.
Bottom line: After this week, any deal announced to Congress won’t be guaranteed a vote before the next Congress takes office in January. House Ways and Means Chairman Kevin Brady (R-Texas) on Tuesday stressed the need for negotiators to finish work this week on a completed NAFTA agreement in order for Congress to vote on it this year. "We believe for the 115th Congress to vote this year on a new modern NAFTA that this week is important for the negotiators to complete their work," Brady said.
— Other items of note:
Chinese Vice Premier Liu He will meet with Senate Finance Chairman Orrin Hatch (R-Utah) and House Ways and Means Chairman Kevin Brady (R-Texas) to discuss issues in the U.S.-China economic relationship.
The World Trade Organization cleared the Trump administration to retaliate on billions of dollars of European goods after it determined the EU had not complied with previous decisions against government support for Airbus. But, the WTO dismissed U.S. claims that loans for the A320 and A330 were costing Boeing significant sales, thus narrowing the scope of the ruling.
Coal prices are climbing on strong demand from China, and boosting U.S. rail traffic. U.S. export prices for electricity-generating coal have soared 16% during what is usually a seasonal lull in the business, the Wall Street Journal reports (link), helped by rising demand in China and export restrictions from some global suppliers.
Gina Haspel appears to have secured enough votes to be confirmed as the country’s next CIA director after stating in a letter to Sen. Mark Warner (D-Va.) that the agency never should have detained terrorist suspects and employed brutal interrogation techniques against them. Last week she refused to condemn the program at her confirmation hearing.
Yum Brands' Pizza Hut unit will become the largest pizza chain in Latin America and the Caribbean, after signing a franchise agreement with Spain's Telepizza Group.
Primaries: A state representative, an Air Force veteran and a college professor — all women — won Democratic House primaries in Pennsylvania, where a record number of women ran for House seats in a year of intense political enthusiasm among female Democrats. Meanwhile: Nebraska Democrats in the 2nd Congressional District nominated nonprofit executive Kara Eastman to face Rep. Don Bacon (R); Republican Scott Wagner will face incumbent Democrat Tom Wolf in the race for Pennsylvania governor; Nebraska state Sen. Bob Krist (D) will face incumbent Republican Pete Ricketts in the race for governor; Republican congressman Lou Barletta will face Democratic incumbent Bob Casey Jr. in the race for U.S. Senate in Pennsylvania; Idaho Republicans nominated Lt. Gov. Brad Little for governor to face Paulette Jordan (D).
— Markets. The Dow on Tuesday declined 193 points, 0.8%, to 24,706.41, after earlier dropping as much as 270 points — Tuesday’s declines pushed the Dow back into negative territory for the year. The S&P 500 dropped 18.68 points, 0.7%, to 2,711.45, and the Nasdaq Composite fell 59.69 points, 0.8%, to 7351.63. Tuesday was the worst day for the Dow and the Nasdaq since April 24 and the biggest one-day fall for the S&P 500 since May 2.
Williams sees Fed raising rates less than in previous expansions. San Francisco Fed President John Williams said a healthy economic outlook hasn't altered his view that the U.S. central bank will likely raise rates less than it did in past expansions.
Japan’s growth streak comes to an end. The world’s third-largest economy ended eight straight quarters of consecutive growth, the nation's longest growth streak in 28 years, as the economy shrank by a worse-than-expected 0.6% in the first three months of the year. Economists say the contraction will be temporary, but there is a chance that trade friction with the U.S. will hurt export demand.
The International Energy Agency (IEA) cut forecasts for global oil demand this year, saying that the highest prices in three years will reduce consumption. "The recent jump in oil prices will take its toll," according to the IEA's monthly report, which cut global demand growth to 1.4 million barrels per day (bpd) for 2018, from a previous estimate of 1.5 million bpd. OPEC and its allies have finally succeeded in their 16-month campaign to clear a global oil glut and markets are set to tighten further as output sinks in Venezuela and the U.S. re-imposes sanctions on Iran.