Biden Administration Readies $3-$4 Trillion Two-Part Economic, Jobs, Tax Package

Posted on 03/23/2021 8:53 AM

Ag and climate change | Black farmer aid/equity | Sanctions on China

 


In Today’s Digital Newspaper


 

Market Focus:
• Traders await Powell, Yellen remarks before congressional panel
• Powell and Yellen not expected to waiver from prior remarks on economy, stimulus
• Fed sent $86.89 billion to Treasury Dept. in 2020, up 58% from 2019
• U.S. dollar index solidly higher

• Crude oil futures under significant pressure due to more Covid restrictions
• Ag demand update:

Cordonnier maintains Brazilian crop pegs
• Safrinha corn planting still lagging
• Rains stabilize Argentine crops
• U.S. winter wheat ratings improve after recent moisture
• Russia considers extending retail price cuts on sugar & sunflower oil to temper inflation
• German, Polish and Czech governments agree to intensified wild boar hunting
• Disappointing cold storage numbers for cattle

Policy Focus:
• Vilsack: USDA could detail paused farmer relief payments ‘in the next week or so’
• Biden’s next proposal: two-part $3 trillion package of sweeping policy priorities
• Debt relief just initial step toward racial equity in agriculture: three senators

 

Biden Administration Personnel

• White House staffs up on climate
• VP Harris to swear in CIA director, Labor secretary
• Senate today takes up nomination of Shalanda Young for deputy OMB director
• Interior number two nominee Klein pulled: Politico

 

China Update:
• U.S., allies announce sanctions on China over Uyghur genocide
• China responds to EU sanctions; EU parliament concerned
• Chinese pork prices still sliding

 

Trade Policy:
• USTR Tai holds discussions with Canada, U.K., EU trade officials, WTO chief
• Ag groups press for action on U.S.-Mexico issues under USMCA

 

Energy & Climate Change:

• Are electric cars really better for the environment?
• Big Oil tilts to carbon pricing
• Virtual climate-change conference today
• Vilsack: Carbon bank fits into USDA’s responsibility


Food & Beverage Industry Update:
• USDA increases SNAP benefits up to $100 per household
• Food processing workers eligible for coronavirus vaccines in at least 26 states


Coronavirus Update:
• U.S. officials: AstraZeneca might have included outdated information
• Third wave of Covid leading to renewed lockdowns in Europe
• WSJ: Pfizer aims to expand its vaccine business

 

Politics & Elections:
• Israelis go to the polls in a tightly contested
• House Ag Committee member Vela not seeking re-election in 2022
• Republicans Eric Greitens in Mo. and Mo Brooks in Ala. announce Senate bids
• D.C. statehood debate
• Some Democrats concerned re: contesting Iowa congressional race


Other Items of Note:
• Evanston, Ill., approved first phase of reparations program for Black residents
• Ten people killed when gunman opened fire at grocery store in Boulder, Colo.

 


MARKET FOCUS


 

Equities today: Global stock markets were mostly down overnight. U.S. stock futures signal lower openings. Stocks in Asia mostly slipped as Hong Kong’s Hang Seng fell 1.4%, Japan’s Nikkei 225 index declined 0.6% after gaining 0.8% during the session, and China’s benchmark Shanghai Composite was down 0.9%. Focus today is on a joint appearance today in Congress by Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen, who will speak on the pandemic response. Yellen is expected to highlight the improved economic outlook and expansion in aid/stimulus to households from the $1.9 trillion package, but also highlight the need for more spending, partly paid for with higher taxes. On the international front, U.S. and European Union are discussing further sanctioning China over human rights abuses, while Russia and Chinese government officials meet in a show of unity against the West.

 

     U.S. equities yesterday: The Dow gained 103.23 points, 0.32%, at 32,731.20. The Nasdaq rose 162.31 points, 1.23%, at 13,377.54. The S&P 500 was up 27.49 points, 0.70%, at 3,940.59.

 

On tap today:

 

     • Bank of England Gov. Andrew Bailey gives prerecorded remarks at an Economist sustainability event at 7:50 a.m. ET.
     • U.S. current-account deficit is expected to widen to $186 billion in the fourth quarter from $178.5 billion the prior quarter. (8:30 a.m. ET)
     • U.S. new-home sales for February are expected to fall to an annual pace of 870,000 from 923,000 a month earlier. (10 a.m. ET)
     • Richmond Fed's manufacturing survey for March is expected to rise to 16.5 from 14 a month earlier. (10 a.m. ET)
     • Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen appear virtually before the House Financial Services Committee to discuss the agencies' responses to the pandemic at 12 p.m. ET. See related item below.
     • Federal Reserve speakers: St. Louis’s James Bullard on the economy and monetary policy at 9 a.m. ET, Atlanta’s Raphael Bostic on diversity and inclusion at 10:10 a.m. ET, governor Lael Brainard on climate change at 1:25 p.m. ET, Ms. Brainard at a virtual National Association for Business Economics conference at 3:45 p.m. ET, and Mr. Bullard at the NABE conference at 4:20 p.m. ET.

 

Fed chair Jerome Powell in testimony before the House Financial Services Committee today with Treasury Secretary Janet Yellen will note that the economic recovery has progressed more quickly than expected but that the Fed "will continue to provide the economy the support that it needs for as long as it takes." The Fed has held its benchmark interest rate near zero since the effects of the Covid-19 pandemic slammed the U.S. economy a year ago. Most central bank officials don’t expect to raise the rate until 2024 at the earliest. The Fed also plans to continue buying at least $120 billion a month of Treasury debt and mortgage-backed securities until the economic recovery makes substantial further progress.

 

    Fed balance sheet

 

Federal Reserve said it sent $86.89 billion to the Treasury Department in 2020, up 58% from 2019, as income from its swelling asset holdings offset lower interest rates.

 

Market perspectives:

 

     • Outside markets: The U.S. dollar index is solidly higher early today. The U.S. Treasury 10-year note yield is fetching 1.63% this morning. The 10-year Treasury yield is now about 10 basis points down from the high it hit last week. The 30-year, down 2 basis points to 2.36%, saw its first back-to-back down sessions since mid-February. Gold is slightly higher ahead of U.S. trading, moving just above $1,739 per troy ounce, while silver has weakened to trade below $25.68 per troy ounce.


     • Crude oil futures are under significant pressure on concerns over demand relative to Covid restrictions. U.S. crude has fallen under $59 per barrel while Brent is under $62 per barrel. Crude was under pressure in Asian trading, with U.S. crude down 72 cents at $60.84 per barrel and Brent was 73 cents lower at $63.89 per barrel.

 

     • Fed Chair Powell said Monday that the U.S. central bank is actively exploring the launch of a fully digital dollar but would move to adopt such an offering only with the support of the nation’s elected leaders. The Fed leader repeated in his comments that the U.S. is only at the beginning of its efforts to explore what a digital dollar might be, and that its work is not intended to disrupt the private financial sector, nor is it driven by the rise of private efforts like bitcoin.

 

        BCP

 

     • Ag demand update: The South Korean group SPC has tendered to buy around 35,000 MT of milling wheat to be sourced from the U.S. and Canada. The TFMA group of importers in Thailand has issued an international tender to buy up to 430,000 MT of animal feed wheat. Importers in the Philippines tendered to buy around 155,000 MT of milling wheat and animal feed wheat.

 

Items in Pro Farmer's First Thing Today include (Link to subscribe to FTT):

     • Cordonnier maintains Brazilian crop pegs
     • Safrinha corn planting still lagging
     • Rains stabilize Argentine crops
     • U.S. winter wheat ratings improve after recent moisture
     • Russia considers extending retail price cuts on sugar & sunflower oil to temper inflation
     • German, Polish and Czech governments agree to intensified wild boar hunting
     • Disappointing cold storage numbers for cattle

 


POLICY FOCUS


 

— Vilsack signaled USDA could detail paused farmer relief payments “in the next week or so,” after studying various options over the last month. It’s likely to include a “wide range of assistance” for groups that have struggled to access prior aid programs, the secretary said. “I think it’s fair to say that people have been very patient,” said Vilsack. “And we’ve (USDA) been taking a look at the wide variety of needs that need to be met by resources that have been provided. I expect and anticipate in the next week or so that we’re going to be able to lay out the plan in terms of what we’re going to try to do in the course of the next several weeks and months.”

 

— Biden’s next proposal: two-part $3 trillion package of sweeping policy priorities for infrastructure, clean energy, work force development and education spending as part of the president’s “Build Back Better” agenda, financed in part through tax increases on corporations and the rich. The first part will be focused on infrastructure, and the second focused on other domestic priorities, such as universal prekindergarten, national childcare, and free community college tuition. The New York Times first reported on the two-part package.

 

     The infrastructure part includes hundreds of billions of dollars for repairing the nation’s roads, bridges, waterways, and rails. It also includes funding for retrofitting buildings, safety improvements, schools infrastructure, and low-income and tribal groups, as well as $100 billion for schools and education infrastructure. It also includes $400 billion in spending to combat climate change, including $60 billion for infrastructure related to green transit and $46 billion for climate-related research and development. The plan also would aim to make electric vehicle charging stations available across the country. The measure would also include $200 billion for housing infrastructure, including $100 billion to expand the supply of housing for low-income Americans. It would spend heavily on infrastructure improvements, clean energy deployment and the development of other “high-growth industries of the future” like 5G telecommunications. It includes money for rural broadband, advanced training for millions of workers and 1 million affordable and energy-efficient housing units. Documents signal it will include nearly $1 trillion in spending alone on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations and improvements to the electric grid and other parts of the power sector.

 

     The second component is the “human infrastructure” portion that would include universal prekindergarten, free community college tuition, a huge spending increase on childcare and a national paid leave program. The measure would extend for several years the expansion of the Child Tax Credit recently signed into law for just one year as part of the $1.9 trillion stimulus plan. It would also include extending subsidies for the Affordable Care Act, as well as free and reduced tuition at Historically Black Colleges and Universities. It would spend heavily on education and on programs meant to increase the participation of women in the labor force, by helping them balance work and caregiving. The plan would also extend or make permanent two temporary provisions of Biden’s recent relief bill: expanded subsidies for low- and middle-income Americans to buy health insurance and tax credits aimed at cutting poverty, particularly for children.

 

     Tax policy options to fund the two-part plan are still under review: raising the corporate tax rate from 21% to 28%; increasing taxes on wealthy investors to 39.6% from 37%; increasing the global minimum tax paid from about 13% to 21%; ending federal subsidies for fossil fuel companies; forcing multinational corporations to pay the U.S. tax rate rather than the lower rates paid by their foreign subsidiaries; and limiting deductions that rich taxpayers can claim annually, among other measures. Financing options would reduce federal spending by as much as $700 billion over a decade, like allowing Medicare to negotiate prescription drug costs with pharmaceutical companies. One question is how, exactly, to apply Biden’s campaign promise that no one earning less than $400,000 a year would pay more in federal taxes under his plan. Currently, the top marginal income tax rate starts at just above $500,000 for individuals and above $600,000 for couples. Biden proposed raising that rate in the campaign. While officials say they are committed to not raising the tax bills of any individual earning less than $400,000, they have debated whether to lower the income threshold for the top marginal rate, to tax all individual income above $400,000 at 39.6%, in order to raise more revenue for his spending plans.

 

     A prescription drug linkage. White House officials want to include a measure to force pharmaceutical companies to either lower their prices or pay a steep penalty, similar to the prescription drug bill unveiled by House Democrats in 2019, which aimed to respond to voter frustration over the rising costs of prescription drugs across the country. The Congressional Budget Office has estimated that House Democrats’ bill would save the government approximately $450 billion over the next decade. By lowering the cost of prescription drugs, the government would spend significantly less on Medicare and other public health programs.

 

    Goals for the package: boost the economy, reduce carbon emissions, narrow economic inequality and improve American manufacturing and high-technology industries in an escalating battle with China and other foreign competitors.

 

     The estimated $3 trillion price tag does not include the cost of extending new temporary tax cuts meant to fight poverty, which could reach hundreds of billions of dollars. No estimated costs have been finalized for the two different components. The New York Times notes that the “overall price tag of the package could approach $4 trillion since it includes several tax incentives, like credits to help families afford childcare and to encourage energy efficiency in existing buildings.” The cost could climb by “hundreds of billions more” if “temporary tax cuts meant to fight poverty” are added.

 

     Reaction: Rep. Alexandria Ocasio-Cortez (D-N.Y.) told the New York Times that she was encouraged by what she had heard about the infrastructure policies and likened them to her Green New Deal plan. “One of the big goals we had when we introduced the Green New Deal was to show how people thought about climate change from being a billion-dollar problem to a trillion-dollar opportunity,” she said. “This infrastructure package generally seems to be shaping up in that kind of framework.”

 

     “There’s no good case for anything like the kind of tax increases they’re advocating,” said Sen. Patrick Toomey (R-Pa.), who helped craft the 2017 GOP tax legislation. “The idea we should agree to some huge economy-crushing tax increase so the government can go on yet another spending binge is a nonstarter for me.” Rep. Kevin Brady (Tex.), the top Republican on the tax-focused House Ways and Means Committee, also blasted the prospect of “partisan tax hikes” and slammed the emerging infrastructure proposal as one that would “fleece American workers, families and Main Street businesses.”

 

     Outlook: It is far from clear whether enough Republican support can be found, especially in the Senate, and that will largely depend on how the page is paid for. “I don’t think there’s going to be any enthusiasm on our side for a tax increase,” Senator Mitch McConnell of Kentucky, the Republican leader, told reporters.  He predicted the administration’s infrastructure plan would be a “Trojan horse” for tax increases. Biden and Democratic congressional leaders could again use a special parliamentary tactic, budget reconciliation, with only Democratic votes. But moderate Democrats in the Senate have insisted that the president engage Republicans on the next wave of economic legislation, and that the new spending be offset by tax increases. Republicans are united in opposition to most of the tax increases Biden has proposed and business groups have warned that corporate tax increases would scuttle their support for an infrastructure plan. There’s only one more opportunity to use reconciliation this year, so “multiple bills” means that the White House will need a 60-vote strategy for any pieces that move through the Senate outside of reconciliation.

 

     Next steps: Biden is expected to discuss his agenda during his first formal news conference Thursday and in his first address to a joint session of Congress in the coming weeks. While many observers wonder why Biden and the Democrats are going so fast on policy initiatives, recent history suggests that an administration has only about a year to push major legislation through Congress before attention turns to the midterm elections, and those rarely go well for the party in power. Thus, any bill not at the very top of the president’s list is unlikely to happen.

 

     Debt vs GDP

 

— Debt relief just initial step toward racial equity in agriculture: three senators. The recent at least $4 billion in debt relief for selected minority farmers, part of the $1.9 trillion Covid aid/stimulus package, is a step toward justice, said three Democratic senators who noted the next step should be passage of legislation to root out discrimination at USDA, transfer up to 32 million acres of land to Black farmers and assure producers a fair price when they sell livestock to meat processors.

 

     “USDA recognizes that socially disadvantaged farmers and ranchers have faced systemic discrimination with cumulative effects that have, among other consequences, led to a substantial loss in the number of socially disadvantaged producers, reduced the amount of farmland they control, and contributed to a cycle of debt,” said Dewayne Goldmon, USDA adviser on racial equity.

 

     Under the debt relief provision in the new law, USDA would pay up to 120% of the amount due on loans it made directly to minority farmers or made by private lenders with a USDA loan guarantee. The additional 20% would cover taxes associated with debt relief.

 

     “We are considering a tiered approach which will allow us to process debt relief in different stages and will announce some next steps in the coming days,” said Goldmon in a statement. “We are in the process of seeking input from borrowers and incorporating their suggestions into the implementation.”

 

     During a video news conference on Monday, Democratic Sens. Cory Booker of New Jersey, Raphael Warnock of Georgia and Elizabeth Warren of Massachusetts applauded USDA debt forgiveness as a breakthrough. “This is our first step. We must provide more access to credit and land for these farmers who have suffered this long history of wretched and painful discrimination,” said Booker. “I plan with my allies and friends to fight to have the rest of the Justice for Black Farmers Act enacted as quickly as possible.”

 

     Details: The bill would create an independent board to review appeals of civil rights complaints filed against USDA, investigate complaints of discrimination within the department and oversee the farmer-elected county committees that guide operations at local USDA offices. It also would increase funding for a USDA program to resolve issues related to heirs’ property, which occur when land is passed from one generation of a family to another without a clear title. A new Equitable Land Access Service would issue land grants of 160 acres apiece to up to 20,000 experienced Black farmers annually through 2030. It also would provide funding for historically Black colleges to expand agricultural research and new agricultural courses and it would provide additional credit assistance to Black farmers.

 

     “We need to do more to restore Black farmland,” said Warren. “We need to do more to create economic justice for historically marginalized farmers and ranchers. We need to do more to provide access to land and credit to achieve a new farm economy that works for everyone.”

 

     Trump administration sent $23 billion in pandemic aid to farmers and ranchers last year. Only 1% of it reached Black producers, said Booker.

 


BIDEN ADMINISTRATION PERSONNEL


 

White House staffs up on climate. Jane Lubchenco, who led the National Oceanic and Atmospheric Administration during the Obama administration’s first term, has joined the White House Office of Science and Technology Policy as deputy director for climate and environment, the White House announced. In this role, Lubchenco will help oversee the U.S. Global Change Research Program, which coordinates the government’s climate research and develops the comprehensive National Climate Assessment every four years.

 

— Vice President Kamala Harris today will swear in William Burns as CIA director and Marty Walks as Labor secretary — the Senate confirmed him 68-29 on Monday.

 

— Senate today takes up the nomination of Shalanda Young for deputy OMB director, and a later vote on Vivek Murthy to be surgeon general. While Young is the front-runner, Asian-American groups are pushing for Nani Coloretti, a former Obama administration official. Meanwhile, the Foreign Relations Committee this morning will hold a hearing on Samantha Power’s nomination to be USAID administrator.
 

— Interior number two nominee Klein pulled, according to Politico. The White House has pulled back the nomination of Elizabeth Klein to be the deputy Interior secretary, according to Politico (link), due to opposition from Sen. Lisa Murkowski (R-Alaska). The opposition focused on Klein’s stance on renewable energy and climate issues and her stance on oil and gas. The report also said the administration is now vetting Tommy Beaudreau as a possible replacement. Beaudreau was at the Interior Department during the Obama administration and is an Alaska native and was suggested as a replacement for Klein, the report noted. Murkowski previously “struggled” with the nomination of Interior Secretary Deb Haaland on issues surrounding oil and gas leasing on federal lands.

 


CHINA UPDATE


 

U.S., allies announce sanctions on China over Uyghur genocide. The United States and its allies in Canada, Britain and the European Union announced sanctions on several Chinese officials alleged to have links to what U.S. officials say is a genocidal campaign against Uyghur Muslims. The four Chinese officials targeted are Zhu Hailun, a former secretary of Xinjiang’s political and legal affairs committee; Wang Junzheng, Communist Party secretary of the Xinjiang Production and Construction Corps; Wang Mingshan, a member of the party standing committee in Xinjiang; and Chen Mingguo, director of the Xinjiang Public Security Bureau.

 

     The action drew some immediate retaliatory sanctions (link) from Beijing. China responded by imposing sanctions on a range of European individuals and organizations for what it described as “severely harming China’s sovereignty and interests and maliciously spreading lies and disinformation.” Beijing’s response in turn prompted a warning from members of the EU parliament that a market-access deal recently negotiated between the bloc and China was now in jeopardy.

 

— Chinese pork prices still sliding. Chinese pork prices dropped an average of 1.1% to 34.44 yuan ($5.30) per kilogram from March 15 to March 19, according to a pork price index that tracks 16 provincial-level regions that’s monitored by the country’s ag ministry. Pork prices are down 27.5% from year-ago levels, according to the index.

 

 


TRADE POLICY


 

— USTR Tai holds discussions with Canada, U.K., EU trade officials, WTO chief. U.S. Trade Representative (USTR) Katherine Tai held discussions Monday with trade officials from Canada, the U.K. and European Union (EU), with China a point of discussion with at least the EU and U.K., according to readouts from the sessions from the Biden administration. Tai and U.K. Secretary for International Trade Liz Truss and European Trade Commissioner Valdis Dombrovskis addressed “unfair trade practices of non-market economies, such as China,” the recaps noted.

 

     With Canadian Minister of Small Business, Export Promotion and International Trade Mary Ng, the discussions focused on “the importance of fully implementing” the U.S.-Mexico-Canada Agreement (USMCA) along with shared priorities on “the Covid-19 pandemic, climate and environmental issues, forced labor, and reform at the World Trade Organization.” The two also committed to pursue “a USMCA Free Trade Commission meeting with their Mexican counter part in the near future.” 

 

     Resolving civil aircraft disputes between the U.S., U.K., and EU was discussed, with Tai saying she was still reviewing U.S./U.K. free trade agreement negotiations conducted by the Trump administration. Tai and Truss also indicated there would be “continuing discussions at the G7 Trade Ministerial in March.”

 

     With Dombrovskis, discussions included “global steel and aluminum overcapacity” and the two committed to “regular engagement on key issues, including WTO reform.”

 

     Regarding discussions with WTO Director General Dr. Ngozi Okonjo-Iweala, the discussion focused on the upcoming 12th Ministerial meeting “and how WTO reform can meet the needs of Members.” However, there was no mention of specific U.S. issues on WTO reform.

 

     Bottom line: The virtual discussions were not expected to result in any major breakthroughs nor was there any indication of any major shifts on key trade issues, meaning the discussions laid groundwork for more talks ahead. Europe’s sense that the U.S. remains a somewhat unreliable partner is also affecting its approach to trade negotiations. “We are all aware of the political fragility of the situation in the U.S.,” Ignacio Garcia Bercero, director of the European Commission’s trade arm, said at a Peterson Institute event last Friday. “We need to have the tools to defend ourselves in case we have a return to the unpleasant situation of the last four years.”

 

— Ag groups press for action on U.S.-Mexico issues under USMCA. U.S. ag and commodity organizations continue to press the Biden administration on agricultural trade issues with Mexico, calling for continued action on implementation of the U.S.-Mexico-Canada Agreement (USMCA). The groups highlighted several existing and emerging friction points in U.S./Mexico ag trade relations, including actions related to biotech crops, organics, market access and enforcement of European Union (EU) geographic indications (GIs). The groups noted that biotech crop issues and Mexico’s actions on glyphosate are significant issues and create “a significant risk and uncertainty to cross-border trade of corn and corn products.” The groups also noted that U.S. dairy market access to Canada remains an issue that needs to be addressed. The groups’ letter (link) came as newly installed U.S. Trade Representative Katherine Tai held virtual discussions with her Canadian counterpart on USMCA and other issues (see previous item).

 


ENERGY & CLIMATE CHANGE


 

— Are electric cars really better for the environment? Car makers including General Motors and Volkswagen are retooling their companies to make electric vehicles on the premise that their battery-powered motors are cleaner than gas-burning engines. A close look at all the factors shows EVs are better for the environment — but a WSJ article (link) says “it’s a complex answer with some asterisks.” The environmental cost of a car includes both building it and fueling it. That means factoring in emissions associated with oil drilling and power-plant smokestacks, as well as from mining metals needed for electric-car batteries.

 

— Big Oil tilts to carbon pricing. In a video conference meeting with Biden administration officials, executives from 10 of the biggest oil companies offered support for putting a price on carbon emissions as a way to address greenhouse gas emissions that contribute to climate change. The meeting reportedly focused on emissions of methane from oil and gas production and on the industry's role in the administration's plans to decarbonize the U.S. economy.

 

     Some execs from U.S. companies warned that the wrong policies would hurt U.S. producers and potentially increase demand for imports of fuel produced abroad under weaker environmental protections. In a statement, the White House said national climate adviser Gina McCarthy "made clear that the Administration is not fighting the oil and gas sector, but fighting to create union jobs, deploy emission reduction technologies, strengthen American manufacturing, and fuel the American economy."

 

— Virtual climate-change conference today. U.S. climate envoy John Kerry will join his Chinese counterpart, Xie Zhenhua, at the Ministerial on Climate Action, an annual meeting of major economies and polluters that was set up by China, the EU and Canada after the U.S. moved to exit from the Paris accord. The Wall Street Journal reports (link) that  Kerry’s decision to join is intended to signal that the U.S. is back at the climate table. It comes on the heels of talks last week between senior American and Chinese foreign-affairs officials, “who sniped openly over human rights, aggression against other countries and the U.S. role in the world. But Washington and Beijing have both shown a desire to ramp up leadership and rally countries to set ambitious goals ahead of a U.N. climate conference in November.”

 

— Vilsack: Carbon bank fits into USDA’s responsibility. USDA has the authority to create a carbon bank to encourage climate mitigation on the farm, said USDA Secretary Tom Vilsack on Monday, but he is waiting for farmers’ ideas on how the bank should operate. Speaking at a farm and food policy conference, Vilsack said he was open to an increase in USDA spending power if needed to prevent a squeeze on money needed for the farm program. “Is this a bank that should pay for carbon credits? Is this a bank that should guarantee a price for credits? Is this a bank that potentially should finance the improvements to carbon sequestration and capture?” said Vilsack. USDA opened a 45-day comment period before drafting a climate strategy for submission to the White House. “We obviously have to have input from farmers.” Sen. John Boozman (R-Ark.), ranking member on the Senate Agriculture Committee, has questioned whether USDA can set up a carbon bank without congressional approval.

 

     Vilsack said USDA’s Commodity Credit Corporation (CCC) is “really designed for this kind of money,” referring to climate mitigation, which would be a new agricultural market. Other USDA sources might be tapped for climate work, Vilsack acknowledged. “Maybe it would be necessary for Congress to take a look at this thing (CCC funding) on a year-to-year basis,” said Vilsack, adding he would try to avoid over-taxing CCC resources. Vilsack explained how increasing the CCC cap may be challenging, since it is structured by Congress to be budgeted over a 10-year period. “So, for example, if you were to increase the cap from $30 billion to $50 billion as some have suggested and you made that a permanent increase, that would be scored under the budget rules as a $200 billion hit as opposed to a $20 billion annual hit. So, I think what Congress has done in the past is created the ability to do it on a year-to-year basis.”

 

     Facts and figures. Today there are about 134 million outstanding carbon credits, but only around 2.5 million are directed towards agriculture. Taking this into account, Vilsack stressed that any kind of carbon bank would need to be designed for farmers. “Today, this carbon market really is not designed and set up for farmers,” said Vilsack during the Agri-Pulse Ag and Food Policy Summit. “There’s a lot of paperwork involved there’s a lot of complexity involved. The actual payments are not necessarily significant and not enough to overcome the hassle that’s connected with the carbon market.”

 

     Noting there are more questions than answers, Vilsack said, “We’re going to listen, we’re going to learn, we’re going to take a look at ways it could be financed including but not necessarily limited to the Commodity Credit Corporation. Once we’ve decided on a plan, there will be a lot of outreach, there will be a lot of effort on our part to make sure that people understand how it’s going to work.”

 


FOOD & BEVERAGE INDUSTRY


 

— USDA increases SNAP benefits up to $100 per household with funding from American Rescue Plan. USDA on Monday announced a 15% increase in Supplemental Nutrition Assistance Program (SNAP/food stamp) benefits through September 2021, providing an estimated $3.5 billion to households experiencing food insecurity during the Covid-19 pandemic. The funding was part of the American Rescue Plan. The 15% increase in SNAP benefits will provide about $28 more per person, per month, or more than $100 more per month for a household of four, in additional SNAP benefits. “We cannot sit by and watch food insecurity grow in the United States,” said USDA Secretary Tom Vilsack. “The American Rescue Plan brings help to those hurting the most due to the pandemic. It increases SNAP benefits so households can afford to put food on the table. It invests in working people and small towns and small businesses to get the economy back on track. And it makes the most meaningful investments in generations to reduce poverty.”

 

— Food processing workers are now specifically eligible for coronavirus vaccines in at least 26 states, according to a review by the New York Times (link). Large companies like meatpacking giants increasingly are mounting mass vaccination efforts at their plants and offering incentives to employees.

 


CORONAVIRUS UPDATE


 

 Summary: Global cases of Covid-19 are at 123,719,955 with 2,724,465 deaths, according to data compiled by the Center for Systems Science and Engineering at Johns Hopkins University. The U.S. case count is at 29,869,517 with 542,949 deaths. The Johns Hopkins University Coronavirus Resource Center said that there have been 126,509,736 doses administered, 42,521,057 have been fully vaccinated, or 13.0% of the U.S. population.


— U.S. officials said AstraZeneca might have included outdated information from its Covid-19 vaccine trial, providing an “incomplete” view of the data. The National Institute of Allergy and Infectious Diseases said that the data and safety monitoring board had notified government agencies and AstraZeneca late Monday that it was “concerned” by information the drugmaker had released. "The DSMB expressed concern that AstraZeneca may have included outdated information from that trial, which may have provided an incomplete view of the efficacy data. We urge the company to work with the DSMB to review the efficacy data and ensure the most accurate, up-to-date efficacy data be made public as quickly as possible," the National Institute for Allergy and Infectious Diseases, headed by Dr. Anthony Fauci, said in a statement.

 

     Meanwhile, Regeneron said its antibody drug reduced Covid-19 hospitalizations and deaths by about 70% in a Phase 3 study.

 

— A third wave of Covid that is leading to renewed lockdowns in Europe, and a concern about rising U.S. cases that has paused some reopening plans, could be weighing on stocks and helping bonds as recovery and growth optimism ebbs. New York is now pausing plans to boost restaurant capacity to 50%. Germany is going into a hard lockdown over Easter.

 

— WSJ: Pfizer aims to expand its vaccine business by becoming a leader in the new gene-based technology behind its successful Covid-19 shots. The company will develop new shots using the technology, called mRNA, to target other viruses and pathogens beyond the coronavirus, Chief Executive Albert Bourla told the Wall Street Journal (link).

 


POLITICS & ELECTIONS


 

— Israelis go to the polls in a tightly contested election as a successful vaccine rollout failed to give incumbent leader Benjamin Netanyahu a clear edge.

 

— House Ag Committee member Vela not seeking re-election in 2022. Rep. Filemón Vela (D-Texas) said he will not seek re-election in 2022, likely setting up a battle for the seat that could loom large given the tight margin in the House. Vela previously had led the House Agriculture General Farm Commodities and Risk Management Subcommittee but does not currently hold any subcommittee leadership roles.

 

— Two conservative Republicans — Eric Greitens in Missouri and Mo Brooks in Alabama — announced Senate bids. In Missouri, Eric Greitens, the former governor who resigned after a scandal involving allegations of sexual misconduct and blackmail, said he would run for the seat being vacated by Senator Roy Blunt. And in Alabama, Rep. Mo Brooks, a staunch backer of former President Donald Trump, joined the race to succeed Sen. Richard Shelby, who has also said he will not seek re-election in 2022.

 

— D.C. statehood. Democrats and Republicans sparred Monday over statehood for Washington, D.C., with proponents saying residents were due full voting rights and critics calling it a partisan power grab.

 

— Some Democrats are noting concerns as the party plans to move forward with contesting an Iowa congressional race. Rep. Mariannette Miller-Meeks (R-Iowa) was sworn into the seat in January after her six-vote victory was certified by Iowa election officials. But her Democratic opponent, Rita Hart, has requested that the House investigate the race, and possibly seat her instead. Democratic leaders had approved plans to move forward with the review, but some Democrats are urging them to drop the matter over fears it will be tagged as hypocritical after opposing former President Trump’s attempts to overturn his election loss last year.
 


OTHER ITEMS OF NOTE     


 

— Evanston, Ill., approved the first phase of reparations program for Black residents. The Evanston City Council on Monday acknowledge the harm caused by discriminatory housing policies, practices and inaction going back more than a century. The 8-1 vote will make $400,000 available in $25,000 homeownership and improvement grants, as well as in mortgage assistance for Black residents who can show they are direct descendants of individuals who lived in the city between 1919 and 1969. Link for details.

 

— Ten people were killed on Monday when a gunman opened fire at a grocery store in Boulder, Colorado. It was the second mass shooting in the U.S. in less than a week, coming after the killings in Atlanta. A suspect in the Boulder shooting is in custody, although his motive remains unclear; the only identified victim was a police officer who was one of the first to respond to the scene.

 


 

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