Senate GOP Leaders Again Expected to Roll Out Latest Aid Plans

Posted on 07/26/2020 12:44 PM

WRDA Act | WTO reform | GDP report to show big economic contraction | FOMC

 


Washington Focus


 

Senate Republicans will unveil their around $1 trillion stimulus proposals. The Republicans’ proposal, which McConnell plans to release Monday, is not as generous as the House’s. It will extend weekly unemployment benefits, but reduce the payments from $600. Treasury Secretary Steve Mnuchin says the White House is seeking to propose a cap on unemployment benefits that would restore up to 70% of lost wages...”So it’s not a fixed number, it’s something that pays you a percentage of your wages that are lost,” Mnuchin said on Fox News Sunday. GOP lawmakers fear it is an incentive for people not to work since some individuals are earning more through unemployment than by actually working. Because of how states process aid, the benefit effectively ran out this past weekend for many Americans, though it is officially set to expire on July 31.

 

     Treasury Secretary Steven Mnuchin said the plan would send another round of $1,200 checks to Americans and be based on the same formula from the earlier aid bill. Mnuchin said Saturday that the bill called for payments to the same group of Americans as the last round — $1,200 to individuals with adjusted gross incomes below $75,000 and married couples making less than $150,000. Payments would be gradually reduced for incomes above those levels before they are phased out entirely. “We’ll get the majority of them out in August and those will help people,” Mnuchin said.

 

     White House chief of staff Mark Meadows suggested on ABC’s This Week that Republicans might try to pass a smaller package, which would include extended unemployment insurance, and then “negotiate on the rest of the bill in the weeks to come.” Democrats have rejected that approach.

 

     White House economic advisor Larry Kudlow said Sunday that the next round of coronavirus relief will lengthen the federal eviction moratorium.

 

     The next coronavirus bill from Senate Republicans is set to provide liability protection for businesses and funding to help schools restart. The legislation will also include $16 billion in new funds for testing (and clarifying that $9 billion in previously approved funds will be used for testing) and tax incentives to encourage companies to rehire employees. Democrats included $75 billion for testing in their bill.

 

     “The check is there, the re-employment bonus is there. The retention bonus is there,” Kudlow said of the next relief legislation. “There will be breaks, tax credits for small businesses and restaurants... It’s a very well rounded package,” Kudlow added. “It’s a very well targeted package.” Kudlow also said the administration plans to lengthen the federal eviction moratorium, which has protected millions of renters in the last four months from getting evicted and expired on Friday,

 

     The GOP's expected aid to states would be limited to new flexibility on the use of funds appropriated in the CARES Act, and an additional $70 billion to help K-12 schools.

 

     As for the GOP floor strategy, Republicans plan to break their proposal into several bills in the hopes of overcoming Democratic opposition to elements of it. Some Republicans have floated the possibility of passing a short-term federal jobless aid to prevent a lapse in assistance, though Democrats largely have rejected the idea. “I would be very much averse to separating this out and lose all leverage for meeting all of the other needs. It’s a fraudulent tactic,” House Speaker Nancy Pelosi (D-Calif.) said.

 

     Pelosi again said the House could stay in session longer if necessary to arrive at a deal with Senate leaders for a new coronavirus relief package.

 

     The ag aid portions of the two packages are different in strategy, with the House-passed measure in May very prescriptive while the coming Senate plan gives USDA Secretary Sonny Perdue a lot of discretionary authority, something opposed by House Ag Chairman Collin Peterson (D-Minn.) and Senate Ag Committee ranking member Debbie Stabenow (D-Mich.). Both approaches would send direct payments to impacted producers and provide aid to dairy and livestock producers. Both also include indemnity payments for livestock producers having to euthanize animals, and aid to the ethanol industry. Funding for the ag portions is being spun by both sides with the Senate plan including an already authorized $14 billion for USDA's Commodity Credit Corporation (CCC) and in the House plan, $10 billion in new CCC authority that the Ag Secretary is not required to use. Of note, the House plan does not include aid for 2020 crops, with a source saying, “The Senate language may be broad enough to encompass 2020 crops.”

 

     After the Senate GOP aid plan is officially released, look for Rep. Peterson to hold a press event on the topic as an event previously planned for last Friday was postponed when the Senate aid package was not released.

 

House lawmakers plan action on a seven-bill fiscal 2021 appropriations package (HR 7617) this week. It will include Defense, Commerce-Justice-Science, Energy and Water, Financial Services, Homeland Security, Labor-HHS-Education, and Transportation-HUD funding. The House Rules Committee is scheduled to meet Monday to set the amendments and terms for floor consideration of the package.

 

     Water Resources Development Act: The House could vote on a multibillion-dollar measure that would help build, repair, and maintain a wide variety of water infrastructure projects. Approved unanimously by voice vote in the House Transportation and Infrastructure Committee earlier this month, the Water Resources Development Act (WRDA) of 2020 (HR 7575) would authorize the Army Corps of Engineers every two years to carry out specific projects and feasibility studies. The bill would direct funds for 38 new projects and 35 studies that include repairing locks and dams on inland waterways to boost coastal shorelines against flooding, and protecting the nation’s waters against harmful algal blooms and other invasive species, such as the Asian carp. The bill, which has bipartisan support, is expected to face little to no opposition on the House floor. The Senate Environment and Public Works Committee approved its own water resources bill that hasn’t received a vote on the Senate floor.

 

     Two bills on child care and child safety will get a vote this week, Majority Leader Steny Hoyer (D-Md.) said. HR 7027 would create a $50 billion stabilization fund to support child care providers affected by the coronavirus pandemic. HR 7327 would expand dependent care and payroll tax credits to support caregivers and child care providers affected by Covid-19. The House already adopted a rule governing floor debate for the measures, with no amendments in order to either proposal.

 

     Rep. John Lewis (D-Ga.) will lie in state at the U.S. Capitol Rotunda on Monday and Tuesday. An invitation-only ceremony will be held Monday at 1:30 p.m. ET. The public can pay respects Monday and Tuesday. Due to Covid-19 precautions, Lewis will lie in state at the top of the East Front Steps of the U.S. Capitol for the public viewing, and the public will file past on the East Plaza.

 

The Senate on Monday will vote on several nominations, including the confirmation of William Scott Hardy to be a judge on the U.S. District Court for the Western District of Pennsylvania. The Senate is also positioned to hold a confirmation vote in the coming days on the president’s picks for two seats on the National Labor Relations Board.

 


Hearings and Events This Week


 

The Senate Finance Committee holds a hearing Wednesday on possible reforms to the World Trade Organization. The witness list includes Dr. Joe Glauber, a former chief economist of USDA and agricultural trade negotiator under the U.S. Trade Representative, and currently senior research fellow at the International Food Policy Research Institute.

 

     The Consumer Federation of America’s annual food policy conference takes place Tuesday, with the commissioner of the Food and Drug Commission, Stephen Hahn, a headline speaker.

 

     Former USDA Secretaries Ann Veneman and Tom Vilsack on Tuesday will speak at a National Association of Counties hosts virtual town hall.

 

     The antitrust hearing featuring CEOs from Amazon, Apple, Facebook and Google has been postponed, but the issue of potential antitrust action will still be on the front burner for investors.

 

Monday, July 27


     • Energy issues. The Atlantic Council webinar on "Offshore Wind: Unlocking Potential for a Green Stimulus."
     • Foreign affairs. The Atlantic Council webinar on "Another August Surprise: What is Putin Up to in Ukraine?"


Tuesday, July 28


     • Consumer Federation of America online food policy conference, through Wednesday.
     • National Association of Counties hosts virtual town hall with former USDA Secretaries Ann Veneman and Tom Vilsack.
     • Covid-19 financial relief packages oversight. Senate Homeland Security and Governmental Affairs Committee hearing.
     • Medical supply chain reliability during Covid-19 (Part I). Senate Finance Committee hearing. Note: Part two of the hearing will take place on July 30.
     • Private sector telework policies during Covid-19. Senate Homeland Security and Governmental Affairs — Subcommittee on Regulatory Affairs and Federal Management Subcommittee hearing.
     • Vulnerable populations during disaster. House Transportation and Infrastructure — Subcommittee on Economic Development, Public Buildings and Emergency Management hearing.
     • Justice Department oversight. House Judiciary Committee hearing. Witness: Attorney General William Barr.
     • Protecting 2020 election integrity. House Homeland Security — Subcommittee on Cybersecurity, Infrastructure Protection, and Innovation hearing.
      • Building a vibrant and just clean energy economy. House Select Climate Crisis Committee hearing.

Wednesday, July 29


     • Consumer Financial Protection Bureau report. Senate Banking, Housing and Urban Affairs Committee hearing. Witness: Kathleen L. Kraninger, director of the Consumer Financial Protection Bureau.
     • WTO reform. Senate Finance Committee hearing on "WTO Reform: Making Global Rules Work For Global Challenges." Witnesses include former USDA top economist Dr. Joe Glauber, now senior research fellow at the International Food Policy Research Institute.
     • Stopping public protest violence. Senate Judiciary — Subcommittee on Constitution Subcommittee hearing.
     • Covid-19 and state veterans homes. House Veterans' Affairs — Subcommittee on Health hearing on "Who's in Charge? Examining Oversight of State Veterans Homes During the Covid-19 Pandemic."
     • Banning undocumented immigrants from Census count. House Oversight and Reform Committee hearing. Witnesses: Sec. of Commerce Wilbur Ross, Census Director Steven Dillingham, Census Bureau Chief Scientist John Abowd and several former Census directors.
     • Citizenship and immigration services oversight. House Judiciary — Subcommittee on Immigration and Citizenship hearing.
     • Kick starting economic recovery. House Small Business — Subcommittee on Rural Development, Agriculture, Trade, and Entrepreneurship hearing.

Thursday, July 30


     • Bipartisan Policy Center launches initiative on building a bipartisan agenda for farm and forest carbon solutions.
     • State Department budget. Senate Foreign Relations Committee hearing on "Review of the FY2021 State Department Budget Request." Witness: Secretary of State Mike Pompeo.
     • U.S. economic policy towards China. Senate Commerce, Science and Transportation — Subcommittee on Security hearing on China challenge, focusing on realignment of United States economic policies to build resiliency and competitiveness.
     • Consumer Financial Protection Bureau (CFPB) pandemic response. House Financial Services Committee hearing. Witness: CFPB Director Kathleen Kraninger.

Friday, July 31


     • National plan to contain the coronavirus. House Oversight and Reform Committee hearing. Witnesses: Dr. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases; and Robert R. Redfield, director of the Centers for Disease Control and Prevention.

 


Economic Reports for the Week


 

The Federal Reserve meets, and it is expected to emphasize that it will continue to do all it can to help the economy. Fed Chairman Jay Powell gives a presser Wednesday after the FOMC results. Meanwhile, the first reading of second-quarter gross domestic product will be released Thursday, and it will show how hard the economy crashed after it was shut down to fight the coronavirus. Economists expect a contraction of about 35% in the second quarter, followed by a bounce back in the third quarter.

 

Monday, July 27

     • Census Bureau releases the Durable Goods report for June. Expectations are for a 5.5% rise in new orders for durable manufactured goods, to $205 billion, after a 15.7% jump in May.
     • Federal Reserve Bank of Dallas reports its Texas Manufacturing Outlook survey for July. Economists forecast a reading of just above zero, continuing the index’s rebound from records lows in March and April.

Tuesday, July 28

     • Federal Open Market Committee (FOMC) meeting begins.
     • Conference Board releases its Consumer Confidence Index for June. Consensus estimate is for a 95.5 reading, slightly below May’s 98.1.
     • S&P Corelogic Case-Shiller HPI
     • Richmond Fed Manufacturing Index

Wednesday, July 29

     • FOMC announces its monetary policy decision. The central bank is expected to keep interest rates near zero through 2022. Fed Chairman presser follows. The Fed may discuss how to provide more stimulus, though they have signaled comfort leaving policy on hold until they learn more about the pandemic's economic effects.
     • MBA Mortgage Applications
     • National Association of Realtors releases its Pending Home Sales Index for June. The index is seen rising 5.4% to a 105 reading, after a record spike of 44.3% in May.
     • International Trade in Goods
     • Wholesale Inventories [Advance]
     • State Street Investor Confidence Index
     • Survey of Business Uncertainty

Thursday, July 30


     • Bureau of Economic Analysis reports gross domestic product for the second quarter. Consensus estimate is for a decline of 34%, after a 5% fall in the first quarter. The largest quarterly drop recorded was 10% for the first three months of 1958. The BEA’s release will probably confirm the end of the longest economic expansion in U.S. history, which began in June of 2009.
     • Jobless Claims
     • Fed Balance Sheet
     • Money Supply

Friday, July 31


     • Institute for Supply Management releases its Chicago Purchasing Manager Index for July. Economists forecast a 42 reading, above June’s 36.6 but still below the expansionary level of 50, which the index hasn’t surpassed since last summer.
     • BEA reports personal income and spending for June. Expectations for a 3% decline in income and a 6% jump in spending. This compares with a 4.2% drop and a 8.2% gain, respectively, in May.
     • Employment Cost Index

 


Key USDA & international Ag & Energy Reports and Events


 

Monday, July 27

 

     Ag reports and events:

  • Export Inspections
  • Crop Progress
  • EU weekly grain, oilseed import and export data
  • MARS crop bulletin — monthly report on crop conditions in Europe
  • International Sugar Organization webinar on China’s market
  • Indonesia palm oil export tax for August to be announced during the week
  • Holiday: Thailand

Tuesday, July 28

 

     Ag reports and events:

  • Livestock & Meat Domestic Data
  • Peanut Stocks and Processing
  • Holiday: Thailand

     Energy reports and events:

  • API weekly U.S. oil inventory report

Wednesday, July 29

 

     Ag reports and events:

  • Broiler Hatchery
  • Egg Products

     Energy reports and events:

  • EIA weekly U.S. oil inventory report
  • U.S. weekly ethanol inventories

Thursday, July 30

 

     Ag reports and events:

  • Weekly Export Sales
  • Port of Rouen data on French grain exports
  • Australian Grains Industry Conference

     Energy reports and events:

  • EIA natural gas storage change
     

Friday, July 31

 

     Ag reports and events:

  • CFTC weekly commitments of traders report
  • Peanut Prices
  • Agricultural Prices
  • Farm Production Expenditures
  • FranceAgriMer weekly update on crop conditions
  • Malaysia’s palm oil export data for July 1-31 (tentative)
  • Holiday: Singapore, Indonesia, Malaysia

     Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts

 

 

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