Monday: Virtual Biden/Xi Meeting and White House Signing Ceremony for BIF

Focus on CBO scoring and Sen. Manchin re: fate of Build Back Better package

Washington Focus

Monday is a busy day in Washington, as President Biden is expected to sign the bipartisan infrastructure framework (BIF) into law and in the evening the president will hold a virtual summit with Chinese leader Xi Jinping. Congress is poised to leave town after this week for a one-week Thanksgiving break and will return on Nov. 29. The Senate is scheduled to be in session until Dec. 13, but Majority Leader Chuck Schumer (D-N.Y.) urged senators to "keep your schedule flexible for the remainder of the calendar year."

At Monday’s BIF signing, Biden may appoint someone to oversee implementation of the infrastructure bill. Infrastructure stocks rose 10% on Monday last week, and 25% to 50% in the past month. About half of the package would have been spent anyway, but the bill adds more than $200 billion to upgrade roads, bridges, and railways. Some $75 billion targets water and pollution clean-up; another $75 billion goes for spending on electric power. Some $5 billion will go to electric vehicle charging stations. As for the signing ceremony at the White House, most of the attendees will be Democrats, but some Republicans have indicated they plan to attend, including Sen. Susan Collins (R-Maine) and Rep. Tom Reed (R-N.Y.). The White House said Friday that it has invited lawmakers of both parties to the signing, as well as labor and business leaders. Asked for an estimate of how many Republicans will show up, press secretary Jen Psaki responded: “We will see.”

The virtual meeting will be the first with Xi since Biden became president in January. With the European Union to ease Trump-era sanctions on aluminum and steel, criticism of China's trade practices and subsidies for domestic businesses has lingered. White House officials are building low expectations — “no deliverables” — via the virtual meeting, but this White House has fooled before. Meanwhile, U.S. Trade Representative Katherine Tai said progress was being made in talks with China to hold the country accountable for promises made in the "Phase 1" trade deal President Donald Trump signed in January 2020. So, we could get an update about that this week following the Biden/Xi event.

As for the Build Back Better (BBB) measure, the Congressional Budget Office (CBO) will in large part determine when the House will vote on the social/climate spending measure, even though House Speaker Nancy Pelosi (D-Calif.) wants the vote to occur this week. She’s had to delay votes recently. House Majority Whip Steny Hoyer (D-Md.) included consideration of the bill on the upcoming week's House floor schedule. National Economic Council Director Brian Deese on the BBB bill timing, on ABC’s This Week: “We’re confident that this bill is going to come up in the House this week. It will get a vote, it will pass, and it will move on to the Senate.”

Sen. Manchin has leverage and is the key Senate vote. If CBO’s score of the 2,100-page BBB tops $1.75 trillion, it could give centrist Sen. Joe Manchin (D-W.Va.) a clear reason to oppose the measure and to push for additional cuts, or to again ask for a delay on the topic. He raised concerns that a multi-trillion bill could add to the country's inflation woes, pushed back on provisions to reduce methane emissions, opposed a Medicare expansion, demanded changes to the tax provisions in the House proposal and resisted measures aimed at helping undocumented immigrants. Whatever eventually passes the House will be changed, likely significantly, in the Senate.

Moderate House Democrats have said they want more “fiscal information” from the CBO about the bill. CBO last week began releasing cost estimates of six sections of the bill. But those estimates cover just a fraction of the overall “score” the CBO is expected to produce on the bill in the coming weeks. Further estimates are expected to be completed this week — Pelosi said in a “Dear Colleague” letter Friday that the CBO is expected to issue three additional reports on Monday. In a statement last Tuesday, CBO Director Phillip Swagel said the “analysis of the bill’s many provisions is complicated” and that it will only release “estimates for individual titles of the bill as we complete them… Other estimates will take longer, particularly for provisions in some titles that interact with those in other titles. When we determine a release date for the cost estimate for the entire bill, we will provide advance notice,” he said. (Note: On Monday, the Bipartisan Policy Center hosts a webinar discussion with CBO’s Swagel entitled "The U.S. Legislative Landscape: Implications for the American Economy.”)

No Republicans will back the BBB, which means Democrats can afford just three defections from their side in the House and none in the Senate.

Five House moderates — Reps. Ed Case (D-Hawaii), Josh Gottheimer (D-N.J.), Stephanie Murphy (D-Fla.), Kathleen Rice (D-N.Y.) and Kurt Schrader (D-Ore.) — issued a statement on Nov. 5 saying they plan to vote on the bill if the information released by the CBO “is consistent” with White House data provided to members on the top lines for revenues and investments for the legislation.

The Senate can’t pass the bill under the budget reconciliation rules without a final CBO score. And the Senate parliamentarian will also need to weigh in on whether certain provisions violate the Byrd rule, which limits what lawmakers can pass using reconciliation. Schumer says the Senate will work closely this week with the parliamentarian.

The Senate's debate over BBB appears likely to slip, after the House failed to send the bill over before the Veterans Day recess. Schumer wanted to start debate on the legislation this week but instead, but in a letter (link) sent to the Senate Democratic caucus on Sunday, said that the Senate is "likely" to take up the National Defense Authorization Act (NDAA), a massive defense policy bill, instead. Schumer, in his letter, noted that the Senate's defense bill debate will include a vote on repealing the 2002 Iraq War authorization. He's also considering adding China competitiveness legislation that passed the Senate earlier this year but has stalled in the House. "Timing of consideration of the BBB in the Senate will largely depend on when the House sends us the bill and when CBO finalizes their scores for all of the committees, which are needed to complete the 'Byrd Bath' process," Schumer wrote in the "Dear Colleague" letter.

Congress has through Dec. 3 to fund the government for fiscal year 2022 and prevent a shutdown heading into the holidays. Schumer, in his letter, acknowledged that lawmakers will need to pass another stop-gap bill, known as a continuing resolution (CR), as talks about a larger deal continue — see next item.

White House puts pressure on Congress to pass FY 2022 funding bills. As expected, the White House wants Congress to reach a deal on the annual government funding bills as negotiations among the two major political parties have failed to make much headway. The OMB said in a fact sheet sent out on Friday that Congress must “reach a bipartisan, bicameral agreement” on full-year appropriations bills for fiscal year (FY) 2022 in the weeks ahead.

The bills, the OMB said, will be crucial in addressing the nation’s “critical needs,” including funding to “improve readiness for future public health crises,” bolster defense readiness and modernization, provide “overdue investments in election infrastructure,” support kids in high-poverty schools and “ensure access to student loans and student aid.”

Big hurdle: In a letter going out Monday, GOP Sens. Mike Braun (Ind.), Marco Rubio (Fla.), Mike Lee (Utah), Cynthia Lummis (Wyo.) and Ted Cruz (Texas) say they won’t support any fiscal 2022 omnibus spending bill that doesn’t fund the U.S./Mexico border wall.

The Senate will vote this week on the nomination of Robert Bonnie to be USDA’s undersecretary for farm production and conservation.

Bonnie will be over a climate-smart agriculture and forestry partnership program that USDA Sec. Tom Vilsack wants to test approaches to building markets for climate-related products, including carbon offsets, using his Commodity Credit Corp. (CCC) spending authority because it’s a “commodity program.”

On Wednesday, the Senate Agriculture Committee will hold a confirmation hearing for two more nominees to senior USDA positions, Chavonda Jacobs-Young to be undersecretary for research, education, and economics and the department’s chief scientist, and Margo Schlanger to be assistant secretary for civil rights.

Three amigos. On Thursday, President Biden will host Canadian Prime Minister Justin Trudeau and Mexican President Andrés Manuel López Obrador.

On the hearing front, the Senate Energy and Natural Resources committee on Tuesday will hold a hearing on energy price trends.

Tuesday also brings a hearing on the renewable economy in rural America via the House Subcommittee on Commodity Exchanges, Energy. Plant Based Products Council (PBPC) and Executive Director Jessica Bowman will be providing testimony at the hearing — there’s no public list of witnesses currently available but there will be representatives from the biofuel and renewable energy industries as well.

Trade policy hearing. On Wednesday, the House Agriculture subcommittee holds a hearing, “Trade Policy and Priorities.”

In the ag financial sector, Tyson Foods on Monday releases quarterly results. Walmart reports third-quarter fiscal-2022 earnings before the opening bell on Tuesday.

The National Association of Farm Broadcasting annual convention begins Wednesday in Kansas City and runs through Friday.

Economic Reports for the Week

Retail sector takes over the economic calendar with the October Retail Sales report hitting on Tuesday, Nov. 16. More healthy gains are expected, despite lingering worries about rising prices and supply chain disruption.

Monday, Nov. 15

Empire State Mfg Index
China industrial production and retail sales
Japan GDP

Tuesday, Nov. 16

National Association of Home Builders releases its NAHB/Wells Fargo Housing Market Index for November. Consensus estimate is for an 80 reading, even with the October figure. The index is off about 10% from its peak late last year, but home builders remain bullish on the housing market.
Census Bureau reports on retail sales spending for October. Expectations are for 0.8% month-over-month increase in retail sales. Excluding autos, spending is seen rising 0.9% This compares with gains of 0.7% and 0.8%, respectively, in September. Industrial production
Import and export prices
Business Inventories
Industrial Production
Treasury International Capital
Eurozone GDP
Federal Reserve: Barkin, Bostic and George take part in discussion on racism.

Wednesday, Nov. 17

MBA Mortgage Applications
Census Bureau new residential construction data for October. Economists forecast that privately owned housing starts will increase 2.2% to a seasonally adjusted annual rate of 1.59 million.
Federal Reserve: Daly participates in fireside chat; Evans participates in Mid-Size Bank Coalition event.

Thursday, Nov. 18

Jobless Claims
Conference Board Leading Economic Index for October. The consensus call is for a 0.8% monthly gain, to a 118.4 reading. The Conference Board is currently projecting a 5.7% GDP growth rate this year. Fed Balance Sheet
Philadelphia Fed Mfg Survey
KC Fed Index
Money Supply
Federal Reserve: Evans participates in financial services symposium; Daly takes part in Fed Listens event.

Friday, Nov. 19

Quarterly Services Survey

Key USDA & international Ag & Energy Reports and Events

With USDA’s November supply and demand reports out of the way, attention turns to remaining U.S. harvest and crop development elsewhere.

Monday, Nov. 15

Ag reports and events:

Export Inspections
Crop Progress
Fruit and Tree Nut Data
Vegetables and Pulses Data
Feed Grains: Yearbook Tables
Malaysia’s Nov. 1-15 palm oil exports
Holiday: Brazil