Calendar and Tough Decisions Await Two Key Infrastructure, Social Spending Plans

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Fed chair Powell testifies twice this week | Biden meets German leader Merkel
 


Washington Focus



The Senate returns this week, but the House doesn’t return to the Capitol for another week, and its members are scheduled to go back home for August recess two weeks later.

The fate of infrastructure, antipoverty (reconciliation) plans should be better able to forecast this week. After a two-week recess, senators return to Washington with much of President Biden’s roughly $4 trillion agenda in sight.

Democrats insist they will pass two measures: a bipartisan infrastructure bill with 60 or more Senate votes; and a budget resolution that includes instructions for passing another bill under reconciliation that allows them to bypass a GOP filibuster for a party-line, multitrillion-dollar social infrastructure package including broad child-care, housing for the homeless and the expansion of Medicare, an education plan, among other provisions, via a reconciliation measure. “My intention for this work period is for the Senate to consider both the bipartisan infrastructure legislation and a budget resolution with reconciliation instructions, which is the first step for passing legislation through the reconciliation process,” Senate Majority Leader Chuck Schumer (D-N.Y.) reiterated in a letter late last week to his caucus.

       Timeline. The Senate was set to adjourn from Aug. 9 until nearly mid-September, but Schumer told Senate Democrats in a letter on Friday that he expects that the chamber will take up both a $1.2 trillion infrastructure agreement (roughly $600 billion in funding above expected federal spending on infrastructure) and a resolution setting the parameters of a bill encompassing other Democratic priorities in the coming weeks, very likely via a budget reconciliation approach which would need 50 votes for passage, and to avoid any filibuster needing 60 votes. The second spending package has not been written. Democrats have yet to release legislative text of the bipartisan bill, and not even House Speaker Nancy Pelosi (D-Calif.) has seen the full details, she told reporters last week. The physical infrastructure measure. The Senate may extend its work period further into August, when lawmakers typically return to their states. “Please be advised that time is of the essence, and we have a lot of work to do. Senators should be prepared for the possibility of working long nights, weekends, and remaining in Washington into the previously scheduled August state work period,” Schumer wrote in a letter to Democrats last week.

     Senate passage of both bills is key to any House action. Reason: Pelosi has said she will not move to have a House vote on the traditional infrastructure measure unless the House also passes the second, or reconciliation (human infrastructure) bill. And, House Budget Committee Chairman John Yarmuth (D-Ky.) has suggested the House could wait to see what budget resolution is advanced in the Senate before taking action.

     Democrats on the Senate Budget Committee want to reach an accord on the top-line cost of the second measure soon and bring a budget resolution to the Senate floor in the coming weeks, the first step before other committees will craft the details of the legislation. Another potential issue is that Republicans have said advancing other Democratic priorities could cause them to oppose the infrastructure deal.

     Further, negotiators and the White House have said the cost of plan is fully covered, with revenue coming from enhanced enforcement at the Internal Revenue Service and public-private partnerships, among other sources of funding. But that assessment will face several tests ahead. Official analysis of the plan from the Congressional Budget Office (CBO) could show that its spending isn’t fully paid for, possibly jeopardizing Republican support for the deal. Senate Minority Leader Mitch McConnell (R-Ky.) said at a Kentucky event last week that he wanted to see the cost of the infrastructure agreement covered with revenue increases. “I think there’s a decent chance that may come together; all I’ve said is I would like for it to be paid for. We’ve added quite enough to the national debt,” he said. McConnell said he would oppose the second package of Democratic priorities, railing against possible tax increases. Democrats are weighing several tax increases, including raising the corporate tax rate from 21%, tightening the net on U.S. companies’ foreign earnings and boosting the capital-gains rate.

     Other social issues in coming second package. Besides universal prekindergarten, in-home care for elderly Americans, and an expanded child tax credit, among other priorities, some Democrats are hoping to expand Medicare so that it covers dental, vision and hearing care and offer it to a younger set of Americans.
     After two weeks of staff negotiations, senators on the Budget Committee are expected to meet Monday evening to try to bridge differences on the total size of the package and how much of it needs to be paid with new revenues. Reports have surfaced that negotiators expect the Senate Budget Committee to settle on a roughly $3.5 trillion reconciliation package as the starting point for a Democrat-only bill for "human” infrastructure. But if no Republican votes for the reconciliation package, all Senate Democrats would have to approve it. That makes the eventual price tag of the reconciliation package important because Sen. Joe Manchin (D-W.Va.) and other centrists signal they would not support a lofty funding level, and even the $3.5 trillion level would appear too high as Manchin has previously indicated he could support something totaling $1.5 trillion to $2 trillion. Senate Budget Chair Bernie Sanders (I-Vt.) is still pushing for a high number, telling the New York Times' Maureen Dowd for an interview that $2 trillion to $3 trillion is “much too low” (link to NYT article).
 


Hearings and Events This Week



Fed Chairman Jerome Powell testifies twice and there are several fiscal year (FY) 2022 budget markups and hearings on tap.

Monday, July 12

  • Crime. President Biden will meet with local leaders including law enforcement, elected officials, and a community violence intervention advocate” on gun crime and other violent crime.
  • Federal Reserve. New York Fed President John Williams, Minneapolis Fed President Neel Kashkari scheduled to speak.
  • SNAP program. House Agriculture Nutrition, Oversight, and Department Operations Subcommittee hearing on "Examining the SNAP (Supplemental Nutrition Assistance Program) Benefit Cliff."
  • FY 2022 budget markup. House Appropriations Energy and Water Development, and Related Agencies Subcommittee markup of the FY 2022 appropriations bill for the agencies under its jurisdiction.
  • FY 2022 budget markup. House Appropriations Labor, Health and Human Services, Education and Related Agencies Subcommittee markup of the FY 2022 appropriations bill for the agencies under its jurisdiction.
  • FY 2022 budget markup. House Appropriations Commerce, Justice, Science, and Related Agencies Subcommittee markup of the FY 2022 appropriations bill for the agencies under its jurisdiction.
  • FY 2022 budget markup. House Appropriations Transportation, Housing and Urban Development, and Related Agencies Subcommittee markup of the FY 2022 appropriations bill for the agencies under its jurisdiction.
  • FY 2022 appropriations. CQ Roll Call and FiscalNote virtual discussion on "Appropriations 2021 — Where Do We Go From Here?"
  • County issues. Final day of the National Association of Counties (NACo) annual conference.
  • Energy data. Atlantic Council virtual 70th annual BP Statistical Review of Energy.
  • Judicial nominations. House Judiciary Courts, Intellectual Property, and the Internet Subcommittee hearing on "The Importance of a Diverse Federal Judiciary, Part 2: The Selection and Confirmation Process."
  • Elections. House Administration Committee hearing on "The Elections Clause: Constitutional Interpretation and Congressional Exercise."
  • Minimum wage, filibuster. Poor People's Campaign news conference "to launch a season of nonviolent moral direct action to push the U.S. Senate on voting rights, $15/hour minimum wage and ending the filibuster."
  • Energy regulatory issues. National Association of Regulatory Utility Commissioners virtual discussion on "Virtual Power Plants in the 20s: Moving From Theory To Practice."
  • Western energy market issues. HorsePower Consulting, Dearing Consulting and ZE PowerGroup Inc. virtual 24th annual Mid-C Seminar with the theme "Progress and Challenges in the Western Energy Markets," including remarks on clean energy from Allison Clements, commissioner of the Federal Energy Regulatory Commission.
  • Repeal authorization of war on Iraq. Senate Foreign Relations Committee closed hearing on SJRes.10, to repeal the authorizations for use of military force against Iraq.

Tuesday, July 13

  • Net zero emissions. Bloomberg global Sustainable Business Summit. Among the speakers is Gina McCarthy, White House climate adviser who will comment on the role of policy in getting to net zero emissions.     
  • Federal Reserve. Atlanta Fed President Raphael Bostic, Minneapolis Fed President Neel Kashkari, and Boston Fed President Eric Rosengren scheduled to speak.
  • Rural economic issues. House Small Business Underserved, Agricultural, and Rural Business Development Subcommittee hearing on "Rural American Recovery: The Role of Small Businesses and Entrepreneurship."
  • China human rights situation. Hudson Institute virtual discussion on "Exploring the Effects of Chinese Sanctions on European Members of Parliament (MEP)," focusing on "the Chinese Communist Party's genocide of the Uyghur people."
  • Building and net-zero emissions. Bipartisan Policy Center virtual discussion on "Building Faster to Achieve Net-Zero."
  • Vote on USTR, other nominees. Senate Finance Committee markup to vote on the nominations of Sarah Bianchi to be deputy U.S. trade representative for Asia, Africa, investment, services, textiles and industrial competitiveness; Jayme Ray White to be deputy U.S. trade representative for Western Hemisphere, Europe the Middle East, labor and environment; and Melanie Anne Egorin to be assistant HHS secretary for legislation.
  • Trade and COVID. Atlantic Council virtual discussion on "The Future of Trade in a Post Covid-19 World."
  • CFTC meeting. Commodity Futures Trading Commission teleconference of the Market Risk Advisory Committee, including reports from its CCP Risk and Governance and Interest Rate Benchmark Reform Subcommittees; and Vote on recommendations from the Interest Rate Benchmark Reform Subcommittee regarding a market best practice for switching interdealer trading conventions from LIBOR to the Secured Overnight Financing Rate for U.S. Dollar linear interest rate swaps.
  • Future of work. Government Executive Media Group virtual discussion on "The Future of Work: Reimagining Government for the Next Crisis."
  • International corporate taxation. Urban-Brookings Tax Policy Center virtual discussion on "International Corporate Tax Reform: Base Erosion and Profit Shifting (BEPS) and Biden."
  • US dollar and foreign policy. Carnegie Endowment for International Peace virtual discussion on "The Future of the Dollar and American Foreign Policy."
  • Renewable energy. The United States Energy Association virtual discussion on "Using Renewables to Operate a Low-Carbon Grid: Demonstration of Advanced Reliability Services from Utility-Scale Solar PV and Utility-Scale Wind Plants."
  • Energy panel members’ day. House Energy & Commerce Committee hearing.
  • SBA nomination. Senate Small Business and Entrepreneurship Committee markup to vote on the nomination of Dilawar Syed to be deputy administrator of the Small Business Administration.
  • International trade. Commerce Department’s International Trade Administration teleconference of the Trade Finance Advisory Council.
  • U.S. and Indo-Pacific region. House Foreign Affairs Committee markup of HR 3524, the "Ensuring American Global Leadership and Engagement (EAGLE) Act."
  • Climate agenda. NDN holds a virtual discussion on "President Biden's Climate Agenda."
  • Immigration. House Judiciary Immigration and Citizenship Subcommittee hearing on "Oh, Canada! How Outdated U.S. Immigration Policies Push Top Talent to Other Countries."
  • Drug market competition. Senate Judiciary Competition Policy, Antitrust, and Consumer Rights Subcommittee hearing on "anticompetitive conduct in prescription drug markets."

Wednesday, July 14

  • Infrastructure. President Biden will meet with a bipartisan group of governors and mayors to discuss infrastructure investments.
  • Monetary policy testimony. House Financial Services Committee hearing on "Monetary Policy and the State of the Economy,” with Fed Chairman Jerome Powell.
  • Corporate concentration. Joint Economic Committee hearing on "A Second Gilded Age: How Concentrated Corporate Power Undermines Shared Prosperity."
  • U.S. competitiveness. Senate Finance Fiscal Responsibility and Economic Growth Subcommittee hearing on "Defending and Investing in U.S. Competitiveness."
  • Low interest rates. Peterson Institute for International Economics virtual discussion on "Challenges of the Low Interest Rate Era."
  • Digital taxes. Atlantic Council virtual discussion on "A Digital Tax Compromise for the Post-Covid Economy."
  • European issues. Bloomberg virtual Sustainable Business Summit Global, with participation from Mairead McGuinness, European commissioner for financial services, financial stability and the capital markets union.
  • North Korea. International Institute for Strategic Studies virtual discussion on a new report, "Democratic People's Republic of Korea (DPRK) Strategic Capabilities and Security on the Korean Peninsula: Looking Ahead."
  • Security legislation markup. Senate Homeland Security and Governmental Affairs marks up several security-related pieces of legislation.
  • Commerce, EPA nominations. Senate Environment and Public Works Committee markup to vote on the nominations of Alejandra Castillo to be assistant Commerce secretary for economic development; Jane Toshiko Nishida to be an assistant EPA administrator; and Jeffrey Prieto to be an assistant EPA administrator.
  • FY 2022 budget: Labor. Senate Appropriations Labor, Health and Human Services, Education and Related Agencies Subcommittee hearing on "The President's FY 2022 Budget Request for the United States Department of Labor,” with Labor Secretary Marty Walsh.
  • Energy legislation markup. Senate Energy and Natural Resources Committee markup of legislation to invest in the energy and outdoor infrastructure of the United States to deploy new and innovative technologies, update existing infrastructure to be reliable and resilient, and secure energy infrastructure against physical and cyber threats.
  • FY 2022 budget: USAID. Senate Foreign Relations Committee hearing on "Review of the FY 2022 U.S. Agency for International Development Budget Request,” with USAID Administrator Samantha Power.
  • Infrastructure. Brookings Institution virtual 10th annual Municipal Finance Conference with the theme "Financing State and Local Infrastructure Investments."
  • Infectious diseases. House Space, Science and Technology Investigations and Oversight Subcommittee hearing on "Principles for Outbreak Investigation: Covi-19 and Future Infectious Diseases."
  • Jobs efforts. House Small Business Economic Growth, Tax and Capital Access Subcommittee hearing on "Innovation as a Catalyst for New Jobs: SBA's Innovation Initiatives."
  • FY 2022 budget: USAID. House Foreign Affairs House Foreign Affairs Committee hearing on "The Biden Administration's Foreign Assistance Priorities and U.S. Agency for International Development's (USAID) FY 2022 Budget Request,” with USAID Administrator Samantha Power.

Thursday, July 15

  • Biden will meet with German Chancellor Angela Merkel.
  • Child tax credit. President Biden will deliver remarks on expanded child tax credit.
  • Federal Reserve. Fed Chairman Jerome Powell delivers his second day of monetary policy testimony to Congress. Chicago Fed President Charles Evans is scheduled to speak.
  • AGree webinar, “The Future of Farming: Producer Perspectives on Agriculture Data Innovation.”
  • USDA nomination. Senate Committee hearing on the nomination of Jennifer Moffitt to be USDA undersecretary for marketing and regulatory programs.
  • Worker-centered trade policy. Washington International Trade Association virtual discussion on "Worker-Centered and Inclusive Trade Policy."
  • Supply chain resiliency. Senate Commerce, Science and Transportation Committee hearing on "Implementing Supply Chain Resiliency."
  • China issues. Progressive Policy Institute virtual discussion on "A Transatlantic Response to the China Challenge."
  • Climate caucus. Washington Post Live virtual discussion on the newly launched Conservative Climate Caucus, the drought in Utah and the negotiations in Congress over infrastructure.
  • CDBG issues. House Financial Services Oversight and Investigations Subcommittee hearing on "CDBG (Community Development Block Grant) Disaster Recovery: States, Cities, and Denials of Funding."
  • Hydrogen issues. United States Energy Association virtual discussion on "Lessons Learned From Initial Experiences With Low Carbon Hydrogen in Europe."
  • Supply chain issues. Internet Governance Forum USA virtual 2021 conference with FCC Commissioner Nathan Simington participating in a discussion on "Facilitating Interoperability - Bridging the Gaps in Supply Chain Security"
  • FY 2022 budget. House Appropriations Committee markup of the FY 2022 Commerce, Justice, Science, and Related Agencies appropriation bill; and the FY 2022 Labor, Health and Human Services, Education, and Related Agencies appropriation bill.

Friday, July 16

  • APEC. President Biden will virtually attend the Asia Pacific Economic Cooperation (APEC) leaders retreat “on the response to the Covid-19 pandemic.
  • Federal Reserve. New York Fed President John Williams scheduled to speak.
  • EU green new deal and agriculture. American Bar Association virtual discussion on "The EU's Green Deal: Good Deal or Bad Deal for Food and Agriculture?"
  • Equity in energy. House Science, Space and Technology Energy Subcommittee hearing on "Fostering Equity in Energy Innovation."
  • FY 2022 budget. House Appropriations Committee markup of FY 2022 Energy and Water Development, and Related Agencies appropriation bill; and the FY 2022 Transportation, and Housing and Urban Development, and Related Agencies appropriation bill.
     

Economic Reports for the Week



Inflation is again the focus with a U.S. report on consumer prices and Federal Reserve Chairman Jerome Powell’s testimony on Capitol Hill.

Tuesday, July 13

  • Bureau of Labor Statistics (BLS) releases the consumer price index for June. Economists forecast a 4.9% year-over-year rise, after a 5% jump in May — the fastest rate of growth since August 2008. The core CPI, which excludes volatile food and energy prices, is expected to increase 4% compared with 3.8% previously.
  • National Federation of Independent Business releases its Small Business Optimism Index for June. Consensus estimate is for a 99.5 reading, about even with the May figure.

Wednesday, July 14

  • MBA Mortgage Applications
  • Federal Reserve releases the beige book for the fifth of eight times this year. The report gathers anecdotal evidence of current economic conditions in the 12 Federal Reserve districts.
  • BLS releases the producer price index for June. Expectations are for both the PPI and core PPI to increase 0.5% month over month. This compares with gains of 0.8% and 0.7%, respectively, in May.
  • Fed Chairman Jerome Powell will deliver the central bank’s semiannual report to Congress on the state of the U.S. economy. Lawmakers at hearings Wednesday and Thursday are likely to seek details on the Fed’s thinking about employment, inflation — and its plans to pare back bond purchases and ultralow interest rates meant to spur growth.

Thursday, July 15

  • Jobless Claims
  • U.S. industrial production, a measure of output at manufacturers, mines and utilities, likely rose again in June. Manufacturing, the biggest component of the monthly index, has faced competing forces of strong demand and supply-chain constraints.
  • Fed Balance Sheet
  • Money Supply
  • China’s second-quarter gross domestic product is forecast to grow 7.9% from one year earlier, a slowdown from the 18.3% pace in the first quarter as base effects related to the pandemic fade. Several economists lowered their 2Q GDP forecast recently after domestic demand missed expectations in both April and May, along with the Covid-19 problems at China’s export hub.

Friday, July 16

  • University of Michigan releases its Consumer Sentiment index for July. Economists forecast an 86.5 reading, slightly higher than June’s 85.5. The index is still well below its levels from just prior to the pandemic.
  • Census Bureau reports retail-sales data for June. Consensus estimate is for a 0.5% monthly decline in spending to $617 billion, after slumping 1.3% in May.
  • Bank of Japan (BOJ) announces its monetary-policy decision. The central bank is widely expected to keep its key short-term interest rate unchanged at negative 0.1%. In June, the BOJ said it would launch a climate-change plan by the end of this year and would release a preliminary plan at its July meeting. This could take the form of higher interest rates paid to banks for green-lending measures.
     

Key USDA & international Ag & Energy Reports and Events 


 

The market will focus on USDA’s World Agricultural Supply and Demand Estimates (WASDE) on Monday. The FAO’s food security and nutrition report and the China farm ministry’s supply and demand data are due the same day.

Monday, July 12

     Ag reports and events:

  • Export Inspections
  • Crop Progress
  • WASDE
  • Crop Production
  • Cotton: World Markets and Trade
  • Grains: World Markets and Trade
  • Oilseeds: World Markets and Trade
  • World Agricultural Production
  • Livestock and Poultry: World Markets and Trade
  • China farm ministry’s monthly supply-demand report (CASDE)
  • French agriculture ministry’s crop plantings and production estimates
  • FAO State of Food Security and Nutrition in the World 2021 report
  • Malaysian Palm Oil Board’s end-June stockpiles, output and production data
  • Malaysia July 1-10 palm oil export data from SGS

     Energy reports and events:

  • EIA monthly Drilling Productivity Report

Tuesday, July 13

     Ag reports and events:

  • Feed Grains Database
  • Meat Price Spreads
  • Season Average Price Forecasts
  • Wheat Data
  • China customs to publish 1H trade data, including imports of soy, edible oils, meat and rubber
  • FranceAgriMer monthly grains report
  • EU weekly grain, oilseed import and export data

     Energy reports and events:

  • API weekly U.S. oil inventory report
  •  IEA monthly Oil Market Report

Wednesday, July 14

     Ag reports and events:

  • Broiler Hatchery
  • Cotton and Wool Outlook
  • Oil Crops Outlook
  • Dairy Monthly Tables
  • Feed Outlook
  • Rice Outlook
  • Wheat Outlook
  • Turkey Hatchery
  • Brazil Unica cane crush, sugar production (tentative)
  • Holiday: France

     Energy reports and events:

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

Thursday, July 15

     Ag reports and events:

  • Weekly Export Sales
  • Feed Grains: Yearbook Tables
  • China 2Q pork output and inventory levels
  • Malaysia July 1-15 palm oil export data
  • Malaysia crude palm oil export tax for August (tentative)
  • Port of Rouen data on French grain exports

     Energy reports and events:

  • EIA natural gas storage change
  • OPEC Monthly Oil Market Report
  • Insights Global report on European refined product inventories in ARA region
  • Russian refinery outage data (weekly)

Friday, July 16

     Ag reports and events:

  • CFTC Commitments of Traders report
  • Peanut Prices
  • Livestock, Dairy, and Poultry Outlook
  • Sugar and Sweeteners Outlook
  • Dairy: World Markets and Trade
  • FranceAgriMer weekly update on crop conditions

     Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts
  • ICE weekly Commitments of Traders report for Brent, gasoil

 

 

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