Senate Needs to Alter Aid Package as Dems Focus on Minimum Wage Alternative

Posted on 03/01/2021 5:08 AM

Vilsack to speak to NFU (Monday) and Commodity Classic (Friday) | Jobs report Fri.

 


Washington Focus


 

Keg agenda items this week include Senate action on the next Covid aid/stimulus package, USDA Secretary Tom Vilsack speaks Monday at the NFU convention and Friday at Commodity Classic, while Friday brings the monthly jobs/employment report. The Senate and House are scheduled to be in session.

 

House Democrats passed a $1.9 trillion stimulus/aid bill early Saturday morning over solid Republican opposition (link for details). The 219-212 vote sent the American Rescue Plan (HR 1319) to the Senate, where it will undergo changes. The two Democratic defectors joining all Republicans were Kurt Schrader of Oregon and Jared Golden of Maine. Golden has argued that the House should have pursued a stand-alone vote on a vaccine-funding bill before turning to larger relief legislation. Democrats hope to push the legislation through both chambers and get it signed into law by March 14, when enhanced unemployment benefits are set to expire.

 

     A provision that would more than double the federal minimum wage must be stripped from the package, based on guidance from the Senate parliamentarian. Senate Democrats were prepping an alternative to try to get around budget rules by taxing employers that don't pay higher wages, but it wasn't clear if that effort would pass muster under the "Byrd rule" either. Senate Finance Chairman Ron Wyden (D-Ore.) said he was drafting a “Plan B” that would boost the minimum wage through the tax code. He said his plan would impose a penalty on corporations that didn’t boost wages and offer tax credits to small businesses to offset the cost of a wage boost. Democratic Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.), who opposed the $15 per hour minimum wage increase, haven’t yet commented on the tax boost possibility. Meanwhile, Progressives are calling for Vice President Kamala Harris, the president of the Senate, to overrule the parliamentarian’s advisory opinion or for Democrats to abolish the filibuster to ensure that the campaign promise of a minimum wage increase can eventually become law under President Biden. But Democrats do not have the votes to overrule the parliamentarian or eliminate the filibuster in the Senate anyway, because of opposition from at Manchin and Sinema.

 

     Before Senate Democrats can pass the bill, they’ll need to go through an hours-long voting session known as a vote-a-rama, where any senator will be able to offer an amendment. Any changes will require the coronavirus relief package to go back to the House.

 

     Other potential Senate changes could redirect some of the $350 billion for states and localities to other purposes like broadband infrastructure; extend the expiration date on extended unemployment benefits by a month; and provide additional funds for restaurants, entertainment venues, hotels and more.

 

     The House legislation includes provisions to provide a third round of direct stimulus checks of up to $1,400 for individuals, a $400 weekly unemployment insurance boost through Aug. 29, and $8.5 billion in funding for the Centers for Disease Control and Prevention (CDC) to distribute, track and promote public confidence in Covid-19 vaccines. The direct payments of up to $1,400 for individuals or $2,800 for married couples are the largest pandemic impact payments yet, after the two previous rounds last year maxed out at $1,200 and $600.  Individuals with incomes of up to $75,000 and married couples earning up to $150,000 would be eligible for the full amounts, while the payments would phase out for individuals making up to $100,000 or $200,000 for couples.

 

     Sen. Susan Collins (R-Maine) said she was talking with Democrats about potential amendments, such as raising the income threshold for Americans to receive stimulus payments, with those making upwards of $200,000 receiving a partial check.

 

     Other key parts of the package include $350 billion for state and local governments, U.S. territories and tribal governments, $130 billion to help K-12 schools reopen for in-person classroom instruction, and an expansion of the child tax credit to $3,000 per child or $3,600 for children under six years of age.

 

     The House package would provide no new direct payments to farmers, but there are $16.1 billion in ag and food provisions approved by the House Agriculture Committee. It would provide $5 billion in assistance to minority farmers, while $3.6 billion is earmarked to fund commodity purchases and to provide grants and loans to processors, farmers markets, producers and organizations to pay for needs such as workers' personal protection equipment and to retool operations to "maintain and improve food and agricultural supply chain resiliency." The ag provisions would pay off direct and guaranteed USDA loans held by designated minority farmers and ranchers. They would get payments worth 120% of the indebtedness to retire the loans and pay the associated taxes. The package also would extend the temporary 15% increase in Supplemental Nutrition Assistance Program benefits through September, and would provide an additional $6.6 billion in provisions to expand child nutrition assistance.

 

     A 195-page manager's amendment (link) incorporating many changes sought by Democrats was incorporated when the rule for floor debate was adopted on a 219-210 vote. Republicans criticized the process, and the items tucked into the larger bill as well as the manager's package that came as a surprise and had little to do with the pandemic. For example, a provision added by the Rules Committee, which hadn't been debated in Ways and Means, would "drastically" lower the federal income tax reporting threshold for gig workers from $20,000 to $600. The Joint Committee on Taxation said the provision would raise $7.3 billion over a decade. Democrats "want to reward their political allies at the expense of America's working class," said the Budget Committee's top Republican, Jason Smith of Missouri. "Simply put, this is the wrong plan, at the wrong time, for all the wrong reasons."

 

     Republicans also stressed a provision dubbed the “Pelosi payoff” that they said could direct up to $140 million to a rail and subway system connecting San Jose and Santa Clara, in the San Francisco Bay Area near Pelosi's district. Senate Republicans may try to raise a Byrd rule challenge to the transit project.

 

     A WHIP+ amendment from Rep. Randy Feenstra (R-Iowa) and backed by Rep. Cynthia Axne (D-Iowa), which was adopted in the Agriculture Committee markup, was removed in the manager’s amendment. Feenstra’s measure was aimed at providing relief for producers who were affected by natural disasters, including high-velocity wind derecho storms that tore through Iowa last year, causing billions of dollars in damage. Axne told AgriTalk on Friday she would push the topic later on in this Congress.

 

     The final price tag of the package can’t exceed a cost cap of $1.89 trillion, as imposed under the fiscal 2021 budget resolution (SConRes 5) that provides reconciliation instructions. The current package, including a manager’s amendment, could exceed the cost cap by about $20 billion. But that problem may be solved in the Senate if it strips out the minimum wage provision, which the Congressional Budget Office estimated would cost about $67 billion over a decade.

 

USDA Secretary Tom Vilsack will speak at least twice this week, both virtually. On Monday he will provide comments to the National Farmers Union’ (NFU) annual convention. The group tilts heavily Democratic (they were one of the few ag groups in 2009 that backed the controversial cap-and-trade proposal which went down to defeat in part on opposition from most mainstream agriculture) and it will be interesting to see what if any more details Vilsack may provide on climate change and the pause CFAP programs. On Friday, Vilsack comments to the virtual Commodity Classic.

 


Hearings and Events This Week


 

Monday, March 1

  • National Farmers Union annual meeting, through Tuesday. USDA Secretary Tom Vilsack speaks.
  • Section 230 reforms. Sen. Amy Klobuchar (D-Minn.), the chairwoman of the Senate Judiciary Committee's antitrust subcommittee, keynotes The Verge's online discussion about Section 230 reforms on Monday.
  • Nomination hearing: attorney general. Senate Judiciary Committee to consider the nomination of Merrick Garland to be attorney general.
  • Federal Reserve. Fed Governor Lael Brainard addresses Institute of International Bankers meeting.
  • U.S., China and Covid. Brookings Institution virtual discussion on "Fast track to recovery: U.S./China collaboration on Covid-19 prevention and treatment."
  • China issues. Washington Post Live virtual "Path Forward" discussion with Jeffrey Immelt, former CEO of General Electric, on the challenges of leading during a crisis, globalization and China's increasing influence.
  • Financial issues. Technology Policy Institute webinar on "FinTech in the Biden Administration."
  • Immigration. Bipartisan Policy Center webinar on "Go Big or Get Something Done? Bipartisan Wins for Immigration."
  • Covid supply chains. Center for Strategic and International Studies webinar on "Covi-19 Supply Chains and the Trusted Trade Partner Network."
  • U.S. strategy on China. Atlantic Council virtual discussion on "the future of U.S. strategy toward China."

Tuesday, March 2

  • Commodity Classic, through Friday.
  • Protections for meatpacking workers. House Labor-HHS Appropriations Subcommittee hearing, "Health and Safety Protections for Meatpacking, Poultry, and Agricultural Workers.” Witnesses include Dulce Castañeda, a founding member of a group called Children of Smithfield, an organization for families of meatpacking workers, and Iris Figueroa, director of economic and environmental justice at  Farmworker Justice.
  • Telehealth. House Energy and Commerce subcommittee hearing on the future of telehealth.
  • Supreme Court to weigh voting restrictions. The justices are scheduled on Tuesday to consider the legality of rules in Arizona that prohibit third parties from delivering early-voting ballots and disallow in-person ballots that are submitted in the wrong precinct. Opponents say the laws discriminate against voters of color.
  • Federal Reserve. Fed Governor Lael Brainard addresses the Council on Foreign Relations.
  • Global economy. Atlantic Council webinar on "The Global Economy in 2021."
  • Global security challenges. Senate Armed Services Committee hearing on "Global Security Challenges and Strategy."
  • High risk report. Bipartisan leaders on Senate and House committees conference call briefing to discuss the "2021 High-Risk Report," which is released every two years at the beginning of each new Congress "to focus on government operations vulnerable to fraud, waste, abuse and mismanagement, or in need of transformation to meet the nation's biggest challenges."
  • Clean energy. Bipartisan Policy Center webinar on "Advancing the Energy Transition with Innovation and a Clean Energy Standard."
  • SEC, CFPB nominations. Senate Banking, Housing and Urban Affairs Committee hearing on the nominations of Gary Gensler to be a member of the Securities and Exchange Commission; and Rohit Chopra to be director of the Bureau of Consumer Financial Protection.
  • Covid and transportation. House Transportation and Infrastructure Aviation Subcommittee hearing on "Covid-19's Effects on U.S. Aviation and the Flight Path to Recovery."
  • Climate mitigation. Brookings Institution webinar on "A Conversation About Climate Change Mitigation and Resilience," as part of the Blueprints for American Renewal and Prosperity series.
  • Capitol insurrection. Senate Judiciary Committee hearing on "Oversight of the Federal Bureau of Investigation: the Jan. 6 Insurrection, Domestic Terrorism, and Other Threats."
  • Risk report hearing. House Oversight and Reform Committee hearing on "The 2021 GAO High-Risk List: Blueprint for a Safer, Stronger, More Effective America."
  • High risk report hearing. Senate Homeland Security and Governmental Affairs Committee hearing on "GAO's 2021 High Risk List: Addressing Waste, Fraud, and Abuse."
  • OMB nomination. Senate Budget Committee hearing on the nomination of Shalanda Young to be Deputy Director of the Office of Management and Budget.
  • Issues for North America. Woodrow Wilson Center's Mexico Institute and Canada Institute webinar on "A New Future for North America," focusing on U.S.-Mexico-Canada relations.
  • FY 2022 budget: CBO. House Appropriations Legislative Branch Subcommittee hearing on "Congressional Budget Office FY 2022 Budget."

Wednesday, March 3

  • Services trade. Peterson Institute for International Economics virtual discussion on "How can increased openness to trade in services support a strong economic recovery?"
  • 2022 midterm elections. Politico virtual discussion with Rep. Tom Emmer (R-Minn.), chairman of the National Republican Congressional Committee, on "the 2022 midterm elections, former President Trump's role in the party and continued fallout from the Jan. 6 insurrection."
  • Transportation nomination. Senate Commerce, Science and Transportation Committee hearing on the nomination of Polly Ellen Trottenberg to be deputy Transportation secretary.
  • CEQ, EPA nominations. Senate Environment and Public Works Committee hearing on the nominations of Brenda Mallory to be a member of the Council on Environmental Quality; and Janet Garvin McCabe to be deputy administrator of the Environmental Protection Agency.
  • Venezuela issues. House Foreign Affairs Western Hemisphere, Civilian Security and Trade Subcommittee hearing on "A Way Forward for Venezuela: The Humanitarian, Diplomatic, and National Security Challenges Facing the Biden Administration."
  • Trade issues. Diaz Trade Law P.A. virtual discussion on "Forecasting the Next Four Years of Biden on Trade."
  • Europe post-Brexit. George Washington University Elliott School of International Affairs virtual discussion on "Europe's Geopolitical and Economic Landscape Post-Brexit."

Thursday, March 4

  • Oil producers to meet amid signs of growing confidence. The Organization of the Petroleum Exporting Countries (OPEC) is expected to maintain recent oil-production cuts at a meeting, but Saudi Arabia plans to raise output in April and delegates say some other members are set to push for an increase in their own, individual quotas as prices continue their recovery.
  • Rebuild Rural Coalition, a group of organizations advocating for investment in rural America's infrastructure, has a briefing with the White House.
  • FDA foreign drug inspection program. House Appropriations Agriculture, Rural Development, Food and Drug Administration, and Related Agencies hearing on "FDA's Foreign Drug Inspections Program."
  • Energy nomination. Senate Energy and Natural Resources Committee hearing on the nomination of David Turk to be deputy Energy secretary.
  • OMB nominations. Senate Homeland Security and Governmental Affairs Committee hearing on the nominations of Shalanda Young to be deputy director of the Office of Management and Budget; and Jason Miller to be deputy director for management in the Office of Management and Budget.
  • Trade Adjustment Assistance. House Ways and Means Trade Subcommittee hearing on "Reauthorizing Trade Adjustment Assistance: Opportunities for Equitable Access and Modernization."
  • Transatlantic relations and China. Hudson Institute webinar on "Transatlantic Approaches: Europe in an Age of Sino-American Competition."
  • Transatlantic relations. German Marshall Fund of the United States virtual discussion on "A Partnership to Endure: What Next For the Transatlantic Relationship?"
  • Korean peninsula. Center for Strategic and International Studies webinar on "trade and economic issues on the Korean Peninsula."
  • Climate change. House Natural Resources Committee hearing on the “Insular Area Climate Change Act.”

Friday, March 5

  • USDA Secretary Tom Vilsack speaks at Commodity Classic.
  • Congressional trade agenda. Washington International Trade Association virtual 2021 Congressional Trade Agenda on critical trade issues facing Congress in the coming year.
  • Climate and trade. Center for Strategic and International Studies webinar on "Toward a Climate-Driven Trade Agenda."
  • Forest conservation. Atlantic Council webinar on "Driving Forest Conservation at Scale: Architecture for REDD+ (Reducing Emissions from Deforestation and Forest Degradation) Transactions."

 


Economic Reports for the Week


 

Key report this week comes Friday with the jobs report.

 

Monday, March 1

  • Institute for Supply Management Manufacturing Purchasing Managers’ Index for February. Consensus estimate is for a 58.6 reading, about even with January’s figure. The Manufacturing PMI has been above the expansionary level of 50 since May of last year.
  • Census Bureau construction spending data for January. Economists forecast a 0.6% month-over-month gain to a seasonally adjusted annual rate of $1.5 trillion. Construction spending has fully recovered from the pandemic-induced shutdowns and now stands at an all-time high.

Wednesday, March 3

  • MBA Mortgage Applications
  • ADP National Employment Report for February. Consensus estimate is for a gain of 230,000 private-sector jobs, after a 174,000 rise in January.
  • ISM Services Purchasing Managers’ Index for February. Expectations are for a 58.8 reading, roughly even with the January data. The January reading was the highest for the index in nearly two years.
  • Federal Reserve Beige Book, which gathers anecdotal data of current economic conditions in each of the 12 Federal Reserve districts.
  • Bureau of Economic Analysis (BEA) light-vehicle sales for February. Consensus estimate is a seasonally adjusted annual rate of 15.5 million, down from 16.6 million in January.

Thursday, March 4

  • Jobless Claims
  • Productivity & Costs
  • Factory Orders
  • Fed Balance Sheet
  • Money Supply

Friday, March 5

  • Bureau of Labor Statistics jobs report for February. Economists forecast an increase of 200,000 in nonfarm payrolls, after 49,000 jobs were added in January. The unemployment rate is expected to edge up to 6.4% from 6.3%. In January, the average workweek was 35 hours, and average hourly earnings were $29.96. This compares with 34.3 hours and $28.43, respectively, a year earlier.
  • BEA and Census Bureau international trade balance in goods and services for January. Expectations are for a $67 billion shortfall, roughly even with December. In 2020, the trade deficit totaled $678.7 billion, the largest since 2008.
  • Consumer credit
     

Key USDA & international Ag & Energy Reports and Events 


 

Ministers from the OPEC+ alliance, including Saudi Arabia, Russia and Iraq, will hold a video conference Thursday to finalize the next stage in their plan to gradually repeal production cuts that have been in place for many months.

 

Monday, March 1
 

     Ag reports and events:

  • Export Inspections
  • Cotton System
  • Cotton System, Annual
  • Fats & Oils
  • Fats & Oils, Annual
  • Grain Crushings
  • Grain Crushings, Annual
  • EU weekly grain, oilseed import and export data
  • Malaysia’s February palm oil exports data
  • U.S. DDGS production, corn for ethanol
  • USDA soybean crush
  • HOLIDAY: South Korea 

     Energy reports and events:

  • CERA conference, to last all week. Speakers include energy ministers, CEOs and executives from dozens of companies such as Exxon Mobil, Shell, BP, Saudi Aramco, Chevron, Adnoc, Eni, Repsol, Equinor, ConocoPhillips, Total, Sonangol, Indian Oil Corp., Petronas
  • Credit Suisse 26th Annual Virtual Energy Summit, through March 3

Tuesday, March 2
 

     Ag reports and events:

  • Livestock and Meat Domestic Data
  • Purdue Agriculture Sentiment
  • Australia’s Abares agricultural commodities report
  • Abares online Outlook 2021 conference, March 2-5
  • International Sweetener Colloquium sugar outlook, March 2-3

     Energy reports and events:

  • API weekly U.S. oil inventory report
  • OPEC+ Joint Technical Committee meeting, ahead of Thursday’s full meeting
  • Morgan Stanley 2021 Virtual Global Energy & Power Conference
  • Russia monthly oil production data for February

Wednesday, March 3
 

     Ag reports and events:

  • Broiler Hatchery
  • Brazil’s Unica sugar production, cane crush data

     Energy reports and events:

  • EIA weekly U.S. oil inventory report
  • U.S. weekly ethanol inventories
  • OPEC+ Joint Ministerial Monitoring Committee meeting, ahead of Thursday’s full meeting
  • Exxon Mobil investor day

Thursday, March 4
 

     Ag reports and events:

  • Weekly Export Sales
  • County Estimates: All Rice
  • Dairy Products
  • U.S. and Canadian Cattle and Sheep
  • U.S. and Canadian Hogs
  • FAO World Food Price Index, grains supply and demand reports
  • Port of Rouen data on French grain exports
  • U.S. National Coffee Association annual convention (virtual), March 4-5

     Energy reports and events:

  • EIA natural gas storage change
  • OPEC+ ministerial meeting video conference, where ministers will discuss and decide on oil production limits
  • Russian weekly refinery outage data from ministry
  • Insights Global weekly oil product inventories in Europe’s ARA region

Friday, March 5
 

     Ag reports and events:

  • CFTC Commitments of Traders report
  • Peanut Prices
  • Malaysia’s March 1-5 palm oil export data
  • FranceAgriMer weekly update on crop conditions
  • China’s CNGOIC supply and demand reports on commodities 

     Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts
  • U.S. Census crude export data 

 

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