Democrats Pivot to Voting Rights Proposals as BBB Put on Ice

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Reports on impact of surging fertilizer prices | U.S./Russia talks re: Ukraine


Washington Focus


Both chambers are in session as the House returns to join the Senate.

BBB on ice. Centrist Sen. Joe Manchin’s (D-W.Va.) $1.8 trillion spending offer via the Build Back Better (BBB) initiative appears no longer to be on the table, the Washington Post reported Saturday (link). “The week before Christmas, Sen. Joe Manchin sent the White House a $1.8 trillion counteroffer to President Biden’s Build Back Better agenda that included substantial funds for climate, health-care and education initiatives. About four weeks later, the West Virginia Democrat has made clear that he does not currently support advancing even that offer following a breakdown in negotiations between Manchin and the White House right before Christmas, three people with knowledge of the matter said,” the WaPo reported. Manchin said publicly last week that he was no longer involved in talks with the White House over the economic package.  

     Manchin’s offer included proposed tax hikes that Sen. Kyrsten Sinema (D-Ariz.) had already ruled out.

Next up for Democrats: a push for voting rights. President Joe Biden and Vice President Kamala Harris will give a speech Tuesday in Georgia that the White House says will be an urgent call for Congress to pass voting rights legislation. “Right now, in state after state, new laws are being written not to protect the vote, but to deny it,” Biden said Thursday. Democrats charge that state laws enacted by Republican lawmakers before the midterm have stiffened voter ID requirements, established obstacles to voting by mail, reduced the number of polling places and enhanced roles for partisans in overseeing the election process.

     Republicans counter that such laws are needed to ensure elections are being carried out securely and they deny that the limitations on voting options will restrict voting. The “argument is that somehow state legislatures across the country are visibly at work trying to make it more difficult for people to vote,” Senate Minority Mitch McConnell (R-Ky.) said Tuesday. “Of course, that’s not happening anywhere in America.”

     Democrats are pursuing two voting rights bills. The Freedom to Vote Act was spearheaded by Manchin to win bipartisan support. It would make election day a national holiday and set standards for voter ID requirements as well as early and mail voting. It would also restore the voting rights of formerly incarcerated individuals. The John Lewis Voting Rights Act would strengthen the Voting Rights Act of 1965, which in recent years has been weakened by Supreme Court rulings.

     The Senate will vote by Jan. 17, Martin Luther King Jr. Day, on changing the filibuster, a rule that requires 60 votes to advance legislation, if Republicans continue to block the measures. Many Senate Democrats have said that they support killing the filibuster, and Biden has said he is open to seeking a “carve-out” that would permit voting rights legislation to advance with a majority vote. They are facing stiff resistance from Manchin and Sen. Kyrsten Sinema (D-Ariz.), who say any efforts to weaken the filibuster would damage the Senate.

Powell renomination hearing. The Senate Banking Committee conducts a hearing Tuesday, Jan. 11, to weigh the renomination of Jerome Powell as chairman of the Federal Reserve for another four-year term. Lael Brainard’s nomination as vice chair will be taken up by the same committee on Thursday, Jan. 13.

     Powell likely has the votes for an easy confirmation process. Brainard has strong support as the next Fed vice chair from Sen. Elizabeth Warren (D-Mass.) and other Democrats, but she will likely face some opposition from Republicans.

House Ag to hold hearing on electric vehicles. The House Agriculture hearing on Wednesday is titled Implications of Electric Vehicle Investments for Agriculture and Rural America. Renewable Fuels Association has announced that Geoff Cooper, its CEO, will testify.

On the ag front, two reports regarding the impact of surging fertilizer prices will surface this week, both from Texas A&M University. One has already been released (link). Look for our special report on this topic once the other report is officially released by corn groups, reportedly on Wednesday but perhaps sooner.

Senate Minority Whip John Thune, the No. 2 Republican leader, will run for re-election in November, after months of speculation about his political future. The 61-year-old South Dakotan, currently serving his third term, is widely viewed as a potential successor to Senate Minority Leader Mitch McConnell (R-Ky.), who will turn 80 in February. Thune acknowledged the potential that he could become GOP leader impacted his thinking on whether or not to retire. In a statement posted to Twitter Saturday, Thune said he is “uniquely positioned” to serve South Dakota and be “a strong and effective senator who can deliver the results they expect… ...I look forward to earning the support of all South Dakotans in the 2022 election for Senate," he continued. Over the past year, Thune found himself at odds with former President Trump because of the former president’s push for GOP lawmakers to try to overturn the results of the 2020 election. Thune warned that a long-shot effort to throw out the Electoral College results in Congress would go down like a “shot dog.” Thune appears likely to win re-election and has $14,839,846.75 cash on hand in his campaign account, as of the last fundraising quarter.

     Meanwhile, Sen. Ron Johnson (R-Wis.) also announced he will seek a third term in the U.S. Senate.  The race will be one of the most closely contested races this cycle. Republican allies had been publicly pushing for Johnson to seek another term, as they viewed Johnson as their best chance to hold the seat.

SOTU address March 1. President Biden was invited by Speaker Nancy Pelosi (D-Calif.) to deliver his State of the Union (SOTU) address to a joint session of Congress on March 1, the latest date ever for a SOTU — typically, the addresses are delivered in late January or early February. White House spokeswoman Karine Jean-Pierre later told reporters aboard Air Force One that Biden had accepted the invitation. The March 1 address may serve as yet another deadline for Democratic leaders to revive efforts to push some version of the Build Back Better legislation through Congress. The date was chosen, in part, to avoid conflicting with the Winter Olympic Games in Beijing, which will be held Feb. 4 to Feb. 20.

Annual climate change report coming Monday. Officials from NASA and NOAA (National Oceanic and Atmospheric Administration) will release their annual climate change report, looking at U.S. temperature conditions and changes.

Enforcement of the federal vaccine mandate begins Monday for businesses with over 100 employees. Multiple businesses have sued to block the rule, and it has been the subject of much debate among the Supreme Court.

U.S. talks with Russia. A U.S. delegation headed by Deputy Secretary of State Wendy Sherman and a Russian delegation led by Deputy Foreign Minister Sergei Ryabkov will meet Jan. 10 in Geneva to discuss Moscow's demands for security guarantees as part of a revised framework for European security. Those talks precede diplomacy, including meetings of the Russia-NATO Council on Jan. 12 in Brussels and the Organization for Security and Co-operation in Europe on Jan. 13 in Vienna. 

     Negotiators for the U.S. are planning to show up to talks with their Russian counterparts Monday with proposals to discuss the placement of missiles and scope of military exercises in Europe, according to a senior administration official and others familiar with the plans, the Washington Post reported (link). It said the White House is looking to test whether Moscow is serious about ending the Ukraine crisis through diplomacy or is making unworkable demands as a delay tactic or pretext for a new invasion.

     Bottom line: U.S. administration officials said they might be able to find some common ground with Russia on broader arms control, military exercises or similar issues. But both the U.S. and Russia have bottom-line demands that the other side considers nonstarters. Ahead of the negotiations in Geneva, the U.S. detailed punishing financial, technology and military sanctions should Russia send troops across the border. Biden’s advisers want to signal to President Vladimir Putin the high cost he would pay for an invasion of Ukraine.

The late Senate Majority Leader Harry Reid will lie in state at the Capitol Rotunda on Wednesday. The Democratic leader died December 28 at the age of 82.

Economic Reports for the Week

On the economic calendar, updates on wholesale inventories, consumer prices and producer prices are the headliners. Key report is Wednesday’s December consumer price index figures. CPI rose 6.8% over the 12 months ending in November to a nearly four-decade high. Even after excluding volatile energy and food prices, core inflation was up 4.9% over the past year to its highest reading since June 1991.

     On the earnings front, JPMorgan Chase, Citi and Wells Fargo will tell investors how they did during the fourth quarter and what to expect in 2022 when they report earnings on Friday. A rising interest rate environment should help banks increase their net interest margin on loans. Meanwhile, U.S. Bancorp and Bank of America release their earnings on Wednesday, Jan. 19. So does investment banking powerhouse Morgan Stanley. Goldman Sachs is due to report earnings on Tuesday, Jan. 18. Investors will be monitoring what these banks have to say about the rapidly spreading Omicron variant and how that could impact the markets and economy for the rest of the year.

Monday, Jan. 10

  • Wholesale inventories

Tuesday, Jan. 11

  • National Federation of Independent Business releases its Small Business Optimism Index for December. Consensus estimate is for a 99.5 reading, about one point more than November’s figure.   

Wednesday, Jan. 12

  • MBA Mortgage Applications
  • Bureau of Labor Statistics (BLS) reports the consumer price index for December. Economists forecast a 7.1% year-over-year spike, after a 6.8% rise in December, the fastest clip since 1982. The core CPI, which excludes volatile food and energy prices, is expected to jump 5.4%, half a percentage point more than in November, which was the most since 1991.
  • Federal Reserve releases the Beige Book for the first of eight times this year. The report gathers anecdotal information and summarizes current economic conditions from the 12 Federal Reserve districts.
  • Federal budget

Thursday, Jan. 13

  • BLS reports the producer price index for December. Consensus estimate is for a 0.4% monthly gain, while the core PPI is seen increasing 0.5%. This compares with rises of 0.8% and 0.7%, respectively, in November.
  • Department of Labor reports initial jobless claims for the week ending on Jan. 8. In the first week of December, jobless claims were below 190,000, a level not seen in more than half a century.
  • Fed Balance Sheet
  • Money Supply  

Friday, Jan. 14

  • University of Michigan releases its Consumer Sentiment index for January. Expectations are for a 70.4 reading, roughly even with the December data. The index is about 20% lower than its postpandemic peak in April, in part due to consumers’ concerns about rising prices and cost of housing.
  • Census Bureau reports retail sales data for December. Economists forecast a 0.3% month-over-month bump for consumer spending. Excluding autos, spending is also seen ticking up 0.3%. This would match the November data for both releases.
  • Import price index
  • Industrial production
  • Capacity utilization
  • Business inventories

Key USDA & international Ag & Energy Reports and Events 

Focus will be on the USDA’s World Agricultural Supply and Demand Estimates on Wednesday. Other key updates will be China’s trade data, the supply and demand outlook from China’s farm ministry, and Malaysian data for palm oil stockpiles, exports and output.

Monday, Jan. 10

     Ag reports and events:

  • Export Inspections
  • Malaysian Palm Oil Board’s data for December output, exports and stockpiles
  • Malaysia’s Jan. 1-10 palm oil exports
  • Holiday: Japan

Tuesday, Jan. 11

     Ag reports and events:

  • EU weekly grain, oilseed import and export data
  • Brazil’s Conab releases data on area, yield and output of corn and soybeans

     Energy reports and events:

  • API weekly U.S. oil inventory report
  • EIA releases Short-Term Energy Outlook (STEO)

Wednesday, Jan. 12

     Ag reports and events:

  • Broiler Hatchery
  • Meat Price Spreads
  • Cotton Ginnings
  • Crop Production
  • Crop Production, Annual
  • Grain Stocks
  • Rice Stocks
  • Winter Wheat/Canola Seedings
  • Cotton: World Markets and Trade
  • Grain: World Markets and Trade
  • Oilseeds: World Markets and Trade
  • World Agricultural Production
  • Livestock: World Markets and Trade
  • China farm ministry’s CASDE outlook report

     Energy reports and events:

  • EIA weekly U.S. oil inventory report
  • U.S. weekly ethanol inventories
  • American Petroleum Institute and Energy Citizens host the 13th annual 2022 “State of Energy” forum
  • Genscape weekly crude inventory report for Europe’s ARA region

Thursday, Jan. 13 

    Ag reports and events:

  • Weekly Export Sales
  • Feed Grains Database
  • Dairy Monthly Tables
  • Season Average Price Forecasts
  • Wheat Data
  • International Grains Council monthly report
  • Port of Rouen data on French grain exports

     Energy reports and events:

  • EIA natural gas storage change
  • Russian weekly refinery outage data from ministry
  • Insights Global weekly oil product inventories in Europe’s ARA region
  • National EV Charging Initiative hosts electric vehicle summit

Friday, Jan. 14

     Ag reports and events:

  • CFTC Commitments of Traders report
  • Peanut Prices
  • Cotton and Wool Outlook Tables
  • Oil Crops Outlook
  • Feed Outlook
  • Rice Outlook
  • Wheat Outlook
  • Turkey Hatchery
  • China’s December trade data

     Energy reports and events:

  • Baker Hughes weekly U.S. oil/gas rig counts
  • China’s 1st batch of Dec. trade data incl. oil, gas imports; oil products imports & exports


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