Infrastructure Drama Continues in Senate and House as Votes Near

Nominations | FY 2022 spending | FOMC meeting, presser | Meat industry hearings

Washington Focus

What makes Congress work and even get some things done? A coming long vacation. That’s in store ahead and why both chambers will likely act on several topics that have lingered for months (infrastructure bills) or years (hearings on meat processing concentration). Add some USDA nominations votes, and fiscal year 2022 appropriations measures and you can see the to-do list is a big one.

The meatpacking industry will be the focus of several hearings on Wednesday via the Senate Judiciary Committee and a House Agriculture subcommittee.

An effort to expand and hopefully reform WHIP+ for 2020 and 2021 crop disasters will be the focus of a House Ag Committee vote. Funding levels and the current complexity of the ag disaster program are several items that need corrected. Unless the Ag panel uses “such sums as necessary” in its bill language, funding issues will linger. Let’s see if the legislative writers are brave enough.

The big-ticket Senate issue is a big-funding item, the $1.2 trillion ($579 billion in new funding) physical infrastructure measure. Text is still awaited so it’s murky as to what day this week votes will be held. But unless there is another snag in the pay-fors, there will be at least 11 Republican votes to go along with Democratic approval to get the matter pushed to the House — that chamber is already signaling issues with the topic, especially among the far-left members. “A very, very important category for me is how all this is going to get paid for,” Sen. Pat Toomey (R-Pa.) told CNN. “There are people who think this is monopoly money, but it’s not,” said Toomey. The pay-fors reportedly include $70 billion leftover from former President Donald Trump's coronavirus relief packages and savings from targeting the Medicare rebate rule — around $50 billion to be gained by repealing proposed changes to how Medicare pays drugmakers. The bipartisan group also will target unused unemployment insurance and proceeds from Strategic Petroleum Reserve sales, and the same of unused IP addresses and a telecommunications spectrum auction. As for how much additional savings are needed, Sen. Rob Portman (R-Ohio), said on ABC News’ This Week that “We’re about 90% of the way there.”

A group of 11 Republican senators wrote to Senate Majority Leader Chuck Schumer (D-N.Y.) last week, saying they would vote to start debate on the traditional infrastructure bill, provided that the major issues are resolved, and its official cost has been estimated. If all Democrats also support the legislation, as expected, the 60-vote threshold would be cleared. The prospect of more than $4 trillion in combined spending between the traditional and then “human” infrastructure measures has alarmed conservative Republicans, some of whom have pledged to vote against the narrow infrastructure bill because they worry it enables the broader spending goals of Democrats via the coming reconciliation measure likely to be finalized this fall.

Sen. Tom Carper (D-Del.) has signaled that he could oppose the final bill if it did not include more funding for water and sanitation and that several of his colleagues have expressed concern about funding levels for transit priorities such as high-speed rail. Many consider this drama as funding for those topics will “suddenly” appear.

Some observers are asking what Republicans are getting out of the physical infrastructure package. Says a Wall Street Journal commentary (link): “What’s striking about the deal so far, however, is that by all appearances this will be the most one-sided bipartisan deal in decades. Most such deals in Washington include a policy trade: Each side gets something it wants in return for conceding a policy to the other. One example was the 2015 budget deal that included a trade on energy policy between Republicans in Congress and President Obama.” It continues: “We know what Democrats are getting: another $600 billion or so in net new federal spending, including tens of billions in new subsidies for green energy and public transit. They’ll also get Republican fingerprints on their record levels of federal spending. This will make it harder for the GOP to blame inflation on Democratic spending financed by the Federal Reserve.”

Every Democratic vote in the Senate will likely favor the huge $3.5 trillion go-it-alone Democratic leadership-pushed reconciliation measure that will include the human portions of the package inked by far-left Democrats led by socialist Bernie Sanders (I-Vt.) and a host of other topics if the Senate parliamentarian goes along. While Sens. Joe Manchin (D-W.Va.), Krysten Sinema (D-Ariz.) and other less-spend-happy Democrats in the Senate have not yet made their final intentions known, party pressure and funding targets for their states or favorite programs will likely be enough to get them to vote yes. The biggest test comes this fall when Democratic leaders are working to pass the $3.5 trillion plan that would expand Medicare and finance cleaner power. The legislation is also expected to attempt to provide a path to citizenship for some immigrants and fund expanded childcare, paid family leave and affordable housing. Republicans have termed the spending plan irresponsible and potentially damaging to the economy.

Regarding nominations, the Senate Agriculture Committee will vote Monday evening on the nomination of Jennifer Moffitt to be USDA’s undersecretary for marketing regulatory programs. On Thursday, the committee will hold a confirmation hearing for Robert Bonnie to be undersecretary for farm production and conservation and for former New Mexico Rep. Xochitl Torres Small, President Joe Biden’s pick to be undersecretary for rural development. Bonnie has been serving as USDA Secretary Tom Vilsack’s chief climate policy adviser.

The House could pass a chunk of its FY 2022 spending bills, including a package of several measure that includes USDA/FDA/CFTC; the Interior-Environment bill, which funds EPA and the Interior Department; the Labor-HHS bill, which funds the Labor Department; and the Energy-Water bill, which includes funding for the Army Corps of Engineers.

On Wednesday, Securities and Exchange Commissioner Gary Gensler will give a speech to the United Nations on responsible investment. Gensler is expected to outline the SEC's regulatory agenda for 2021 as it relates to climate change, which could include guidance on climate disclosures by companies.

Hearings and Events This Week

Monday, July 26

President Joe Biden will mark the 31st anniversary of the Americans with Disabilities Act at the White House and will meet with Iraqi Prime Minister Mustafa Al-Kadhimi.
USDA nominee vote. Senate Ag Committee markup to vote on the nomination of Jennifer Moffitt to be USDA undersecretary for marketing and regulatory programs.
Food systems. Johns Hopkins University Paul H. Nitze School of Advanced International Studies virtual discussion on "Closing the Evidence Gap for Food Systems Transformation: Enabling the Access to Data and Providing Evidence to Monitor Progress."
Energy issues. Environmental and Energy Study Institute and the House and Senate Renewable Energy and Energy Efficiency Caucuses virtual 2021 Congressional Clean Energy Expo and Policy Forum, with remarks from Deputy Assistant Secretary of Energy for Renewable Power Alejandro Moreno and several lawmakers.
Trade issues. National Customs Brokers and Forwarders Association of America Inc. G.TEC 2021 conference with the theme "Innovating and Transforming Trade in Today's World," including a discussion on "Forced Labor and Withholding Release Orders."
Consumer complaints. Consumer Federation of America conference call briefing on the release a report analyzing the results of CFA's annual survey of consumer complaints made to state and local consumer protection agencies across the United States.

Tuesday, July 27

USMCA. Senate Finance Committee hearing on "Implementation and Enforcement of the United States - Mexico - Canada Agreement: One Year After Entry into Force."
Capital attack. House (Select) Investigation of the Jan. 6 Attack on the U.S. Capital Committee hearing on "The Law Enforcement Experience on January 6th."
China issues. CQ Roll Call and FiscalNote virtual discussion on "Understanding China: How China Sees the World and Its Current Goals."
Trade issues. National Customs Brokers and Forwarders Association of America Inc. G.TEC 2021 conference, including a discussion on "Valuation Trends in U.S, Canada, Mexico and Across the Globe"
FTC meeting. Federal Trade Commission virtual sixth annual Privacy Con conference, with FTC Commissioner Rebecca Kelly Slaughter delivering welcoming remarks.
Digital currencies. House Financial Services National Security, International Development, and Monetary Policy Subcommittee hearing on "The Promises and Perils of Central Bank Digital Currencies."
FY 2022 budget: Interior. Senate Energy and Natural Resources Committee hearing on the president's FY 2022 budget request for the Interior Department, with Interior Secretary Deb Haaland.
Homeland Security needs and resources. Senate Homeland Security and Governmental Affairs Committee hearing on "Resources and Authorities Needed to Protect and Secure the Homeland,” with Homeland Secretary Alejandro Mayorkas.
Clean economy. House Small Business Innovation, Entrepreneurship and Workforce Development Subcommittee hearing on "Wealth for the Working Class: The Clean Energy Economy."
Covid lessons. Senate Health, Education, Labor and Pensions Committee hearing on "The Path Forward: Building on Lessons Learned from the Covid-19 Pandemic."
Pipeline cybersecurity. Senate Commerce, Science and Transportation Committee hearing on "Pipeline Cybersecurity: Protecting Critical Infrastructure,” with Transportation Security Administration Administrator David Pekoske and Deputy Transportation Secretary Polly Trottenberg.
Ransomware attacks. Senate Judiciary Committee hearing on "America Under Cyber Siege: Preventing and Responding to Ransomware Attacks."
Cryptocurrencies. Senate Banking, Housing and Urban Affairs Committee hearing on "Cryptocurrencies: What are they good for?"
Beijing Olympics. Congressional-Executive Commission on China virtual hearing on "Corporate Sponsorship of the 2022 Beijing Olympics."
FERC oversight. House Energy and Commerce Energy Subcommittee hearing on "The Changing Energy Landscape: Oversight of FERC (Federal Energy Regulatory Commission)."
Farmers and climate change. Foreign Policy and the Embassy of the United Arab Emirates virtual discussion on "Farmers on the Frontier of Climate Change."
Food security in the military. Center for Strategic and International Studies virtual discussion on "Food Security in the Military: What We Know and Why It Matters," focusing on "the state of food insecurity in the military community, and short- and long-term implications for U.S. armed forces."
Energy issues. Wood Mackenzie virtual Power and Renewables Conference: North America, with Acting Assistant Energy Secretary and Principal Deputy Secretary for Energy Efficiency and Renewable Energy Kelly Speakes-Backman delivering remarks.
Electric grid and cyber threats. House Oversight and Reform National Security Subcommittee hearing on "Defending the U.S. Electric Grid Against Cyber Threats."
Critical minerals and energy. Bipartisan Policy Center virtual discussion on "Critical Minerals are Key in the Energy Transition,” with remarks from Sen. Lisa Murkowski (R-Alaska).

Wednesday, July 28

Federal Reserve. Federal Open Market Committee (FOMC) meeting concludes at 1 pm CT, with a press conference with Fed Chairman Jerome Powell at 1:30 pm CT.
Beef supply chain. House Ag Livestock and Foreign Agriculture Subcommittee hearing on "State of the Beef Supply Chain: Shocks, Recovery, and Rebuilding."
Food supply chain. Senate Judiciary Committee hearing on "Beefing up Competition: Examining America's Food Supply Chain."
Water infrastructure. Senate Environment and Public Works Committee hearing on "Examining the Benefits of Investing in USACE (US Army Corps of Engineers) Water Infrastructure Projects."
Nomination hearing. Senate Foreign Relations Committee hearing on several nominations including Kenneth Lee Salazar to be U.S. ambassador to Mexico.
U.S./India trade. Atlantic Council virtual discussion on a new report, "Indian Perspectives on Reimagining the U.S./India Trade Relationship."
Unemployment fraud. American Enterprise Institute for Public Policy Research (virtual discussion on "Combating Covid-19 Unemployment Fraud."
Nominee votes. Senate Homeland Security and Governmental Affairs Committee markup to vote on the nominations of Robert Santos to be director of the U.S. Census Bureau; and Ed Gonzalez to be assistant Homeland Security secretary for Immigration and Customs Enforcement.
FY 2022 budget: NDAA. House Armed Services Cyber, Innovative Technologies, and Information Systems Subcommittee markup of HR 4350, the "National Defense Authorization Act for FY 2022." The panel’s Strategic Forces Subcommittee and the Seapower and Projection Forces Subcommittee will later markup the legislation.
Retirement legislation. Senate Finance Committee hearing on "Building on Bipartisan Retirement Legislation: How Can Congress Help?"
CSPC nominations. Senate Commerce, Science and Transportation Committee hearing on the nominations of Alexander Hoehn-Saric to be chair of the Consumer Product Safety Commission; Mary Boyle to be a commissioner of the Consumer Product Safety Commission; and Richard Trumka Jr., to be a commissioner of the Consumer Product Safety Commission
Climate change and global finance. Principles for Responsible Investment virtual discussion on "Climate and global financial markets."
FTC and consumer protection. House Energy and Commerce Consumer Protection and Commerce Subcommittee hearing on "Transforming the FTC (Federal Trade Commission): Legislation to Modernize Consumer Protection."
Clean energy standards. R Street Institute virtual discussion on "Proposed Federal Clean Energy Standards."
FY 2022 budget: U.S. Territories. House Natural Resources Committee hearing on "The President's FY 2022 Budget Priority for the Territories: Medicaid, SSI, and SNAP Parity."
U.S. trade and investment in Africa. Senate Foreign Relations Africa and Global Health Policy Subcommittee hearing on "U.S. Trade and Investment in Africa."

Thursday, July 29

USDA nominees. Senate Ag Committee hearing on the nominations of Xochitl Torres Small to be USDA undersecretary for rural development; and Robert Bonnie to be USDA undersecretary for farm production and conservation.
Protecting the food supply chain. House Ag Committee hearing on "21st Century Food Systems: Controlled Environment Agriculture's Role in Protecting Domestic Food Supply Chains and Infrastructure."
China tactics. Heritage Foundation virtual discussion on "Pushing Boundaries: China's Aggressive New Tactics in South Asia."
Trade sustainability. Washington International Trade Association virtual discussion on "Trade, Sustainability and a Circular Economy."
Pipeline cybersecurity. House Homeland Security Cybersecurity, Infrastructure Protection and Innovation Subcommittee hearing on "The Cyber Talent Pipeline: Educating a Workforce to Match Today's Threats."
US electric grid. United States Energy Association virtual discussion on "Microgrid Planning: The Smart Electric Power Alliance Playbook and Lessons Learned in North Carolina."
Interest rate caps. Senate Banking, Housing and Urban Affairs Committee hearing on "Protecting Americans from Debt Traps by Extending the Military's 36% Interest Rate Cap to Everyone."
FY 2022 budget: NDAA. House Armed Services Tactical Air and Land Forces Subcommittee markup of HR 4350, the "National Defense Authorization Act for FY 2022." The panel’s Readiness Subcommittee and Intelligence and Special Operations Subcommittee will later markup the legislation.
Government Covid response. House Transportation and Infrastructure Committee hearing on "Assessing the Federal Government's Covid-19 Relief and Response Efforts and its Impact."
Offshore wind energy. Bipartisan Policy Center virtual discussion on "Unlocking the Potential of U.S. Offshore Wind."
Renewable energy. House Foreign Affairs Europe, Energy, the Environment and Cyber Subcommittee hearing on "Renewable Energy Transition: A Case Study of How International Collaboration on Offshore Wind Technology Benefits American Workers."
Energy efficiency. The Hill virtual discussion on "Energy Efficiency and Climate Justice."
Central bank digital currencies. Federalist Society for Law and Public Policy Studies virtual discussion on "Central Bank Digital Currencies."
Seaport security. House Homeland Security Border Security, Facilitation, and Operations Subcommittee hearing on "Assessing the State of America's Seaports: Equipping for a Reopened Economy."

Friday, July 30

Federal Reserve. St. Louis Fed President James Bullard to speak; Fed Governor Lael Brainard to speak on Rebuilding the Post-Pandemic Economy at the Aspen Economic Strategy Group Annual Meeting.
Forced labor supply chains. The U.S. Chamber of Commerce virtual discussion on "Tackling Forced Labor in Supply Chains."
South China Sea issues. Center for Strategic and International Studies virtual 11th annual South China Sea Conference.
Resilience of U.S. utilities. United States Energy Association virtual discussion on "The Resilience Imperative for U.S. Electric Utilities."
Global infrastructure. Center for Strategic and International Studies virtual discussion on "Build Back Better World: Meeting the Global Infrastructure Challenge."

Economic Reports for the Week

Economic reports due out include updates on new home sales, pending home sales, durable goods orders, and Q2 GDP. The Federal Reserve two-day meeting of its policy-making committee wraps up on July 28. The Federal Reserve will release a policy statement and Chairman Jerome Powell will hold a press conference on Wednesday after the central bank's two-day meeting. Officials are set to accelerate discussions over when and how fast to reduce their $120 billion in monthly bond purchases, which would precede any interest-rate increase.

Monday, July 26

Census Bureau reports new single-family home sales for June. Economists forecast a seasonally adjusted annual rate of 800,000 new homes sold, 4% more than May’s 769,000.
Dallas Fed Mfg

Tuesday, July 27

Conference Board releases its Consumer Confidence Index for July. Consensus estimate is for a 124 reading, lower than June’s 127.3. The June figure was the highest for the index since the beginning of the pandemic.
S&P CoreLogic releases its Case-Shiller National Home Price Index for May. Expectations are for a 16.4% year-over-year rise, after a 14.6% jump in April. The April spike was a record for the index going back to 1988, when data were first collected.
FHFA House Price Index
Durable Goods Orders
Richmond Fed Mfg

Wednesday, July 28

MBA Mortgage Applications
International Trade in Goods
Retail Inventories
Wholesale Inventories
Federal Open Market Committee announces its monetary-policy decision. The FOMC is expected to leave the federal-funds rate unchanged near zero. Wall Street expects the central bank to announce a timeline for reducing its bond purchases, currently about $120 billion a month, at some time between now and the September meeting.

Thursday, July 29

Jobless Claims
Bureau of Economic Analysis reports its preliminary estimate of second-quarter gross domestic product. Economists forecast a 9.1% seasonally adjusted annual growth rate, following a 6.4% increase in the first quarter. The Federal Reserve currently projects 7% GDP growth for 2021, which would be the fastest rate of growth since 1984. Economists surveyed by the Wall Street Journal estimate that figures to be released on Thursday will show that GDP rose at an 8.5% seasonally adjusted annual rate in the second quarter. This would leave it above the $19.2 trillion level reached in late 2019, the last full quarter before Covid-19 began hammering the economy.
Pending Home Sales
Fed Balance Sheet
Money Supply

Friday, July 30

Employment Cost Index
Personal Income and Outlays
Core PCE Price Index Ann.
Chicago PMI
Consumer Sentiment
Fed Governor Lael Brainard will speak at the Aspen Economic Strategy Group annual meeting. Brainard, the only Democratic appointee left on the Fed board, is set to become more influential this year, so her views are worth tracking closely. She's a favorite to replace Fed Vice Chairman for Supervision Randal Quarles when his term expires this fall, making her the primary bank regulator in the Fed. Previously, she led the Fed's efforts on the Community Reinvestment Act and has stuck close to bank policy in the past, but her speech on Friday is titled "Rebuilding the Post-Pandemic Economy," and could give insight into her broader economic views.

Key USDA & international Ag & Energy Reports and Events

U.S. weather watch is gaining importance, with every forecast change impacting volatile markets.

Monday, July 26

Ag reports and events:

Export Inspections
Crop Progress
MARS monthly EU crop conditions report
Malaysia July 1-25 palm oil export data (tentative)
UN Food Systems Pre-Summit in Rome
Holiday: Thailand