Biden Signs First Package of FY 2024 Spending; To Unveil FY 2025 Proposals Monday
Vilsack at NFU | CPI | Midwest Council on Ag gets $2 mil. | WOTUS rule concerns | Rosendale announces retirement
Washington Focus
One down and a bigger one to go sums up the latest saga regarding completing fiscal year (FY) 2024 funding measures, which should have been finished by Oct. 1 last year. Meanwhile, the Biden administration on Monday will release its proposals for FY 2025, with several hearings on the topic this week. Most of the White House proposals, especially regarding tax hikes, will go nowhere.
The Senate passed the first six-bill minibus, sending the $460 billion package to President Joe Biden's desk where he signed it into law, averting a partial gov’t shutdown.
The Senate vote was 75-22, following votes on a handful of Republican amendments that failed on the floor. It approves full-year funding, through September, for the departments of Veterans Affairs, Agriculture, Interior, Transportation, Housing and Urban Development, Justice, Commerce and Energy.
The measure passed the House on Wednesday in a bipartisan 339-85 vote, with 207 Democrats and 132 Republicans supporting the bill.
“We’ve fully funded WIC so seven million moms and kids won’t be malnourished. We’ve built on the infrastructure law by providing billions to repair our roads and bridges and highways,” Senate Majority Leader Chuck Schumer (D-N.Y.) said ahead of the measure’s passage on Friday. “We’ll be able to hire more air traffic controllers and rail safety inspectors. And we’re taking care of our veterans with support for veteran’s homelessness, mental health, and women veterans.”
Congress now has two weeks (March 22) to fund the rest of the government (about 70%) for the remainder of the fiscal year. The second tranche includes some of the more controversial funding bills, including the Departments of Defense, Labor, Health and Human Services, Homeland Security. Completing the unfinished bills presents significant challenges, particularly due to their involvement with contentious topics like immigration. Additional obstacles include debates over lawmakers' earmarks for district projects, issues concerning lawmaker compensation, and policy riders, notably those addressing diversity, equity, and inclusion offices.
Of note: The minibus is in line with the spending caps deal reached between former Speaker Kevin McCarthy (R-Calif.), Senate Majority Leader Chuck Schumer (D-N.Y.) and President Biden last year. House Speaker Mike Johnson (R-La.) and Schumer reaffirmed the spending deal, which sets a $1.65 trillion spending top line and includes $69 billion in adjustments that were part of a “side deal” to raise the federal debt limit in 2023. Links for Ag spending details: Link to package | Ag bill summary | Ag bill summary | Ag: Explanatory Statement | Congressionally Directed Spending.
— Midwest Council on Agriculture secures funding for new agricultural policy center. The Midwest Council on Agriculture has secured $2 million from the FY 2024 Agriculture Appropriations bill (link) to establish a Midwest Agricultural and Food Policy Center. This initiative aims to fill the void in food and agriculture policy information in the Midwest, where despite its dense agriculture, there has been a lack of coordinated efforts in the policy arena, according to its proponents.
Former U.S. House Agriculture Committee Chairman Collin Peterson (D-Minn.) spearheaded this idea to leverage the agricultural power of the Midwest, with support from Sen. John Hoeven (R-N.D.). The center will complement the work of existing institutions like the Texas A&M Agricultural and Food Policy Center (AFPC) and the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI).
Based at North Dakota State University, the center will collaborate with Land-Grant Universities across the Midwest to research and address key policy areas such as crop insurance, dairy, livestock, and biofuels. The Land-Grant Universities in Iowa, Illinois, Indiana, Kansas, Michigan, Missouri, Minnesota, Nebraska, Ohio, South Dakota and Wisconsin will be key partners in the research and policy areas where they have the most expertise. This initiative received strong backing from over 80 members of the Midwest Council on Agriculture, promising positive advancements in agricultural advocacy throughout the region.
— NPPC’s Formica raises concerns over EPA’s WOTUS rule for farmers. During a recent public hearing on the implementation of the Waters of the United States (WOTUS) rule by the Army Corps of Engineers and the U.S. Environmental Protection Agency (EPA), NPPC chief legal strategist Michael Formica expressed ongoing worries about the rule's impact on producers.
Background. Under previous administrations, efforts were made to expand the rule's authority, potentially subjecting farmers to permits for routine activities near water features. However, a 2023 Supreme Court ruling limited this authority to geographical features like streams and adjacent wetlands.
Despite this, Formica highlighted ongoing issues with the EPA's rule and its implementation. He emphasized the lack of clarity and consistency, making it impractical for farmers to seek guidance on the legality of everyday activities. Additionally, he raised concerns about the EPA's use of internal guidance not shared with the public, calling it "outrageous."
Reports from farmers indicate that the EPA continues to assert jurisdiction over streams far from navigable waters, even those not covered under previous rules, prompting ongoing uncertainty and frustration among agricultural communities.
— GOP Rep. Matt Rosendale of Montana unexpectedly announced his retirement from politics at the end of his current term, reversing his recent decision to seek re-election. This decision comes after a series of shifts in his political plans, including initially launching a Senate campaign in February but then suspending it due to lack of support, particularly from former President Trump, and later opting to run for his House seat instead.
Rosendale's tenure in the House, where he established himself as a staunch conservative, will come to an end with this decision. Notably, he was among the Republicans who sought to remove former Speaker Kevin McCarthy (R-Calif.) from his leadership position.
In a statement shared on social media, Rosendale cited a death threat made against him, although he did not provide specific details regarding the threat or any associated allegations. This announcement follows claims made by former Sen. Heidi Heitkamp (D-Neb.) that Rosendale withdrew from the Senate race due to rumors involving him and a 20-year-old staff member.
The sudden withdrawal of Rosendale from the race leaves the Montana GOP without a clear candidate for the upcoming election, signaling a significant development in the state's political landscape. We checked in with David Wasserman of the Cook Political Report with Amy Walter. He told us: “Elsie Arntzen, Troy Downing and Denny Rehberg are names to watch. It’s a safe GOP district.”
— Update on close Senate race in Arizona. A USA Today article (link) focused on the Senate race in Arizona, which has evolved into a showdown primarily between Democratic Rep. Ruben Gallego and Republican contender Kari Lake, a former TV news anchor. Initially, the race was anticipated to be a three-way competition involving incumbent and independent Sen. Kyrsten Sinema, but her decision not to seek re-election has altered the landscape.
Gallego, being the sole prominent Democrat in the race now, stands to benefit from unified party support previously diffused due to Sinema's candidacy, the article notes. With Sinema out, Democrats can openly back Gallego, potentially boosting fundraising efforts.
Meanwhile, Lake, despite garnering significant GOP support and fundraising, faces scrutiny over her campaign's discipline and approach. Her association with election denialism and divisive messaging could hinder her appeal to Arizona voters, especially in comparison to the late Sen. John McCain, whom some Republicans still admire, the article adds.
Gallego's challenge lies in positioning himself effectively to win over independent voters, given his more progressive stance compared to Sinema and Democratic Sen. Mark Kelly. However, Lake's spending patterns raise concerns about her campaign's sustainability in the long run.
Bottom line: The race is expected to be fiercely competitive, with both candidates vying for support across party lines while navigating the complexities of Arizona's political landscape. The article omits a huge issue: concerns about the number of illegal migrants crossing the border. That could be a key election-deciding issue.
— No Labels, a third-party group, advances plans for 2024 presidential ticket despite lacking a candidate. State ballot access and candidate selection pose logistical challenges, with efforts underway to overcome these hurdles. The organization is accelerating candidate outreach and will announce a selection process on March 14. Uncertainty persists on how third-party candidates will impact election without clarity on candidates and ballot access.
The group is considering picking Geoff Duncan, the Republican former lieutenant governor of Georgia, to lead a “unity” presidential ticket, the Wall Street Journal reports (link), citing people familiar with the discussions said.
Of note: No Labels has a well-financed effort to get on the ballot in all 50 states and is currently on 16, including the key swing states of Arizona and Nevada. No Labels leaders have said they will nominate a ticket if Joe Biden and former Donald Trump are the main parties’ nominees, as is now likely. The group’s leaders have said that their so-called “unity ticket” would have a Republican presidential candidate and a Democratic running mate.
— European farmers' unconventional protests threaten EU policies. Farmers across Europe have been protesting in unconventional ways, such as showering authorities with liquid manure and eggs outside the European Union headquarters in Brussels. This surge of agrarian protests poses a threat to key aspects of EU environmental and foreign policies and could potentially bolster far-right parties in the upcoming European Parliament elections, according to a Barron’s article (link).
The EU's Green Deal, championed by European Commission President Ursula von der Leyen, aimed at revolutionizing farming practices to address pollution and climate change. However, challenges such as Russia's natural gas cutoff, soaring energy and fertilizer prices, and high-interest rates have strained farmers' financial resources, prompting them to push back against stringent environmental regulations.
Von der Leyen, eyeing a second term, has made concessions in response to farmers' grievances, proposing to freeze pesticide reduction plans and offering exemptions to fallow land requirements. This retreat from ambitious environmental goals has drawn criticism from environmental advocates.
Farmers' concerns also extend to cheap imports, with the EU's free trade deal with South America's Mercosur bloc and the influx of Ukrainian agricultural products raising alarms. These issues have sparked complex political debates and delicate diplomatic maneuvers.
— President Biden's State of the Union: Tax hikes and fiscal policy agenda. President Biden's State of the Union address underscored his commitment to an agenda resembling his first term, albeit with intensified measures, particularly in taxation, the Wall Street Journal notes in a commentary item (link).
Biden proposes increasing taxes, as seen in his Inflation Reduction Act, aiming to augment existing levies. For instance, he seeks to raise the excise tax on stock buybacks from 1% to 4%, potentially incentivizing corporations to pursue dividends or acquisitions instead.
Additionally, he advocates raising the IRA's book minimum tax on large corporations from 15% to 21%, while also proposing a corporate tax rate hike from 21% to 28%.
However, critiques suggest that such tax hikes could curtail business investment and wage growth, potentially leading to lower tax revenue.
Biden's push for a new 25% minimum tax on billionaires, targeting individuals with wealth exceeding $100 million, further amplifies concerns over wealth taxation.
The WSJ commentary adds that despite Biden's claims of aiming to reduce the federal deficit, his proposed tax measures may not significantly mitigate it, especially amid plans for increased spending.
While the passage of these measures remains uncertain, Biden may possess leverage over tax policy due to expiring provisions of the 2017 tax reform in 2025. Regardless, a second Biden term, the WSJ concludes, could entail even greater fiscal expenditures than the first, significantly impacting the nation's financial trajectory.
Hearings and Other Events for the Week
Monday, March 11
Tuesday, March 12
Wednesday, March 13
Thursday, March 14
Friday, March 15
Economic Reports and Events for the Week
This week, the spotlight shifts to the consumer as retailers unveil their quarterly results and the federal government releases crucial retail data. Dollar Tree and Williams-Sonoma are set to report on Wednesday, followed by Dick’s Sporting Goods, Dollar General, and Ulta Beauty on Thursday. Investors will keep an eye on inflation trends with the release of the Consumer Price Index on Tuesday. Additionally, tech earnings reports are on the horizon, with Oracle scheduled for Monday and Adobe on Thursday.
Of note: The communications blackout period around the March 19-20 FOMC meeting went into effect at midnight on Saturday, March 9 and runs through midnight on Thursday, March 21. Fed speakers will be absent from the public engagement calendar this week.
Tuesday, March 12
Wednesday, March 13
Thursday, March 14
Friday, March 15
Key USDA & international Ag & Energy Reports and Events
Ag reports of note this week: Statistics Canada will publish its seeded area data for several crops, such as wheat, barley and canola, on Monday. Also this week: Brazil’s Conab issues production, area and yield data for corn and soybeans (Tuesday) and the International Grains Council’s report (Thursday).
In the energy sector, Saudi Aramco on Sunday unveiled its 2023 full-year earnings. OPEC will publish its monthly Oil Market Report on Tuesday, with the U.S. Energy Information Administration releasing its Short-Term Energy Outlook, or STEO, the same day. The International Energy Agency will publish its equivalent report on Thursday.
Monday, March 11
Ag reports and events:
Energy reports and events:
Tuesday, March 12
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Wednesday, March 13
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Thursday, March 14
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Friday, March 15
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KEY LINKS |
WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | California phase-out of gas-powered vehicles | RFS | IRA: Biofuels | IRA: Ag | | Russia/Ukraine war, lessons learned | | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | New farm bill primer | | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum |