House Dems Push Study of Trump Trade War Impacts Before CCC Funding is Tapped

Posted on 09/17/2019 8:32 AM

Despite urging from House farm-state Dems, others want analysis of Trump tariffs

Nothing is easy in farm and RFS policy areas, and this is the case, again, relative to replenishing funding for the Commodity Credit Corporation (CCC) as part of the ongoing process among House Democrats in writing a stopgap funding measure to make sure the government is funded into fiscal year 2020 which starts Oct. 1.

 

Some key House Democrats continue to push a major stipulation relative to replenishing Commodity Credit Corporation (CCC) funding, the mechanism used to pay Market Facilitation Program (MFP) payouts resulting largely from the U.S./China trade war.

The final legislative language could change before it is publicly released perhaps late this afternoon. But as of Monday evening, language attached to the pending Democratic-written continuing resolution (CR) for fiscal year 2020 spending specifies that while the chamber will replenish CCC funding, before funds are taped, USDA must complete a detailed economic study of the impact of the Trump trade war.

The pushed economic analysis, according to sources, would have to detail impacts by state, by crop/livestock sector and the overall impact on the U.S. farm sector.

MFP-2 payouts mounting. As of yesterday, the 2019 Market Facilitation Program, authorized under the CCC, had paid out $4.07 billion to farmers, according to an agency spokesman.

Lawmakers are negotiating language to ensure “accountability and transparency” and hope to conclude those talks soon, is the official word on the matter.

Background. An initial 26-page draft of the bill circulated last week did not contain the increase in the CCC's $30 billion borrowing cap that the Trump administration asked for earlier this month. Without the increase, the White House wrote in their "anomalies" request to lawmakers, the agency "would have to stop making payments as soon as the borrowing ceiling is reached," which was expected sometime after the end of the fiscal year on Sept. 30. In July, the White House made up to $16 billion in additional payments to farmers and ranchers available, after an initial $12 billion payment program in 2018. Eligible producers who haven't signed up already can do so through Dec. 6, 2019, as long as the CCC borrowing limit is raised.

On Monday, House Agriculture Committee Democrats urged their leadership to reconsider and include the White House-backed language in the continuing resolution. "Although we mutually have concerns with President [Donald] Trump’s approach to trade negotiations, we refuse to engage in the same tactics that punish our constituents and harm our communities that rely on agriculture," said Agriculture Chairman Collin Peterson (D-Minn.) and Filemon Vela (D-Texas) and Jim Costa (D-Calif.), who chair Agriculture subcommittees on farm commodities and livestock, respectively. "We cannot and will not allow our farmers to be used as political pawns," the three senior Agriculture panel Democrats added.

Political analysts are surprised that high-level Democrats are pushing this issue, especially with the U.S. ag sector in a cash-flow pinch and because Democrats want to expand their support in a rural sector that votes at least 60% Republican. “Why are they holding CCC funding hostage?” one observer asked. Another said, “Some House Dems are likely using this as a bargaining chip and putting some onerous riders in relative to tapping CCC funding.”

Bottom line: If the issue is not resolved, Republicans and likely some Democrats will balk at the CR. Also, Rep. Peterson usually has a lot of clout among his fellow Democrats when it comes to anything agriculture and RFS related. It would be a major development if his warnings on this topic are not heeded.


 

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