Senate Ag Committee Approves Farm Bill, McConnell Pledges Floor Action before July 4

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1 June 15, 2018 by Steve Kopperud SLK Strategies Senate Ag Committee Approves Farm Bill, McConnell Pledges Floor Action before July 4 In stark contrast to its House counterpart s markup of the 2018 Farm Bill, the Senate Agriculture Committee this week approved on a 20-1 vote its version of the omnibus farm package. Every Senator who spoke during markup, whether Republican or Democrat, praised committee Chair Pat Roberts (R, KS), ranking panel member Sen. Debbie Stabenow (D, MI) and their staff for the bipartisan nature of the bill. The bill is generally considered to be a moderate collection of minor changes to major programs, and holds the line on federal spending, neither increasing or decreasing overall program costs. The bill, the chairman s mark document, a section-by-section explanation and other documents can be found by going to and clicking on the Farm Bill icon. Sen. Charles Grassley (R, IA) was the lone no vote. He missed the deadline for filing an amendment to tighten payment limitations and to more specifically define which producers are actively engaged for the purposes of qualifying for government payments. He explained his amendment missed the deadline because he was making technical changes to make Roberts happy. Grassley s amendment will be a floor amendment, Roberts said. Over 180 amendments to the 1,006-page Senate Farm Bill were filed, and the committee accepted 66 of those as an en bloc amendment to the chair s markup vehicle. Most other amendments were talked about and withdrawn, with several likely to see floor action. That action could come as early as next week, but certainly before Congress recesses June 29 for its July 4 state work period, according to Senate Majority Leader Mitch McConnell (R, KY). Minority Leader Charles Schumer (D, NY), joined McConnell in praising the bill as a bipartisan product worthy of support, further assuring quick floor action. Roberts says he ll need just two days of floor time to advance the bill. This relatively short period suggests Roberts and McConnell are looking at restricting the number and kind of amendments which can be offered, with Roberts also signaling he s okay with a 60-vote majority to approve any amendment. This set-up allows he and Stabenow to more easily control amendments. McConnell, a member of the agriculture committee, has an extra incentive for getting the Farm Bill done quickly. The Kentucky lawmaker, who generally does not attend committee meetings, was front and center at this week s markup protecting language in the bill that would for the first time in over 40 years legalize industrial hemp farming in the U.S. by removing hemp from the federal list of controlled substances. Not only did McConnell successfully protect his hemp farming language, he

2 successfully amended the bill to ensure hemp, as a crop, qualifies for federal crop insurance and USDA research funding. Roberts and Stabenow worked almost seamlessly in handling amendments brought up in committee. They later pledged they would continue this approach during floor consideration of amendments. The most contentious discussion was on a proposed amendment by Sens. John Thune (R, SD) and Sherrod Brown (D, OH) that would boost payments under the Agriculture Risk Coverage (ARC) program to corn and soybean farmers, but pay for those enhancements by tinkering with the Price Loss Coverage (PLC) program, capping target prices at a 10-year average, effectively reducing benefits to peanuts, rice and cotton growers. Thune did not have a Congressional Budget Office (CBO) cost estimate for his amendment in time for the committee action, so said he will continue to revisit this issue on the floor. Roberts has publicly opposed the Thune-Brown action, saying he s concerned about the impact on land prices if PLC is modified. The two leaders also agreed to work with Thune on a separate amendment seeking to cap the Conservation Reserve Program (CRP) at million acres, up from the current cap of 24 million and the bill s proposed cap of 25 million acres. Thune s amendment would also tinker with rental rates and give greater haying and grazing flexibility on CRP acres. Dairy producers won greater federal largesse with committee approval of an amendment by Sen. Amy Klobuchar (D, MN) to refund millions of dollars paid by producers in for Margin Protection Program (MPP) income insurance. The premium refund is on top of about $100 million in MPP enhancements already included in the bill. Klobuchar also irritated southern committee members by successfully offering an amendment to restore full funding at 2014 levels -- $464 million over a decade to a series of biofuels programs zeroed out in the committee bill. She would pay for the funding by raiding a program that pays subsidies to cotton millers, with Sen. John Boozeman (R, AR) opposing her move. Accepted as part of the en bloc amendment were over 20 minor changes to the conservation title. Two changes would increase slightly funding for the Environmental Quality Incentives Program (EQIP) and another to increase the amount of EQIP funding set aside for socially disadvantaged farmers. Another would target CRP acres to highly erodible lands only. Another successful amendment offered by Sen. Heidi Heitkamp (D, ND) would allow USDA to spend Market Access Program (MAP), Foreign Market Development (FMD) and other trade promotion monies on market development in Cuba. Not part of the package, as Roberts and Stabenow promised, are changes to the Supplemental Nutrition Assistance Program (SNAP) program to require more federal food stamp recipients to either work or be in training to receive benefits. Instead, the Senate bill addresses waste, fraud and abuse in the program.

3 Conaway Counting Votes on House Farm Bill Revote as Early as Next Week With House leadership having scheduled votes on two competing immigration bills early next week satisfying the demands of the conservative GOP Freedom Caucus the defeated House Farm Bill could come up for reconsideration as early as next Thursday, sources say. House Agriculture Committee Chair Mike Conaway (R, TX) is actively whipping votes in advance of the action. If the scheduling fates align, both House and Senate Farm Bills could be voted on in the same week. Once set for floor action, action will be simple: Within moments of the bill s defeat May 18, House Speaker Paul Ryan (R, WI) moved to reconsider the bill, allowing him to bring it up for another vote. A June 22 deadline was set for this reconsideration vote. Once on the floor, there will be two votes: The first will be to approve the motion to reconsider; the second will be an up or down vote on the identical bill defeated in May. There will be no general debate or amendments allowed. The bill is expected to pass this go-around, with Freedom Caucus leadership saying the group s members will vote for the bill if leadership sticks to its pledge on immigration votes, including a vote on a bill by Rep. Bob Goodlatte (R, VA). Farm Bill conference committee action between the House and Senate will begin as soon as possible, with staff meeting as soon as both bills are approved by their respective chambers. The deadline for getting a 2018 Farm Bill to the President s desk is September 30. Failing that, Congress will have to approve a one-year extension of current law, and any program with a Congressional Budget Office (CBO) score of less than $50 million a year in mandatory funding will lose baseline protection and will be suspended until a new Farm Bill is enacted. Ryan Sets Immigration Bills for Floor Votes Next Week, Third Bill with Ag Labor Likely in July House Speaker Paul Ryan (R, WI) acquiesced to conservative GOP member demands this week scheduling two competing immigration bills for floor action ahead of a revote on the once-defeated Farm Bill. The action comes as a discharge petition to move as many as four immigration bills to the floor failed to garner the needed 218 votes. Neither of the two bills is expected to pass; if one does succeed, it s highly unlikely the Senate would consider it, said a senior Hill staffer. Ryan s office said the two votes are aimed at resolving the border and immigration issues that have split the Republican caucus for over two weeks, and give the Speaker a shot at controlling his majority position moving forward. The Speaker s office also confirmed there will be a third immigration vote in July on another bill, this one to include agriculture labor needs. Our farmers and ranchers must have access to a legal and

4 reliable workforce in order to provide the world with a safe and abundant supply of food, said Rep. Dan Newhouse (R, WA). However, that bill could also cover particularly contentious issues, including the mandatory use of E-Verify to determine worker citizenship status, a requirement generally opposed by the business community. At issue are two nearly polar approaches to reauthorizing federal protections against deportation for illegal immigrants brought to the U.S. as minor children, so-called dreamers. House Republican conservatives will first get floor action on the so-called Goodlatte bill. House Judiciary Committee Chair Bob Goodlatte s (R, VA) bill, opposed by Democrats and several moderate Republicans, seeks to reinvent the H-2A agriculture seasonal worker visa program and move it to USDA, provide funding for the U.S.-Mexico border wall, and proposing a fix to reinstate federal protections against deportation of dreamers. The second vote will be on work-in-progress compromise bill designed to appeal to moderate Republicans and Democrats, while also amenable to the White House. The bill will likely include a more liberal dreamers fix that would allow granting nonimmigration status or a conditional visa as a path to legal citizenship status, while also ending the current practice of separating minor children from their parents at the border. The bill will include $23.4 billion for a border wall, eliminate the visa lottery system, and end chain migration, all priorities of President Trump. Trump Makes Good on Tariff Threat, Hits China with $50 Billion in New Levies Taking a giant step closer to an all-out trade war and adding fuel to the confusion and worry over U.S. trade policy, President Trump late this week made good on his threat and slapped about $50 billion in tariffs on Chinese exports to the U.S. The list of targeted Chinese products released by the U.S. Special Trade Representative (USTR) on Friday includes 1,012 mainly industrial products subject to a new 25% tariff. The first 818 products will see new tariffs July 6, with the remaining items under a secondary review, USTR said. USTR Robert Lighthizer said the U.S. will set up an exemption process for some U.S. companies which rely on Chinese imports. The White House said Trump was taking the action in light of China s theft of intellectual property and technology and its other unfair trade practices. The U.S. will no longer tolerate losing our technology and intellectual property through unfair economic practices, the president said in a statement. The Chinese government said it will respond in kind to any action by the U.S. to impose new tariffs. If the U.S. takes unilateral and protectionist measures that harm Chinese interests, we will respond immediately by taking the necessary decisions to safeguard our legitimate rights and interests, said Foreign Minister Geng Shuang. The Chinese further explained any offers made to date to buy more U.S. agricultural and energy products are void if the U.S. goes ahead with new tariffs. While touting my great friendship with President Xi of China, Trump said he ll impose even more tariffs on Chinese goods if that country retaliates, with unwelcome actions to include new tariffs on

5 U.S. agricultural products, general goods and services, raising non-tariff barriers or taking punitive actions against American exporters or American companies. Meanwhile, the National Corn Growers Assn. (NCGA), the National Association of Wheat Growers (NAWG), the American Soybean Assn. (ASA), the Association of Equipment Manufacturers (AEM) have tired of talking to the White House and are asking Congress to step in to block Trump s trade actions. Sen. Bob Corker (R, TN) continues to seek support a bill that would block any president from imposing tariffs without congressional approval. Agriculture Secretary Sonny Perdue said this week USDA has developed a formula for calculating losses by farmers and ranchers if their products get hit with tariffs by overseas customers, but stopped short of telling reporters how that system would work. That s why we hold these things in our back pocket, Perdue said. They (producers) will not bear the brunt of any trade disruption. The total allocated to make farmers whole in a trade war is said to be about $30 billion. In addition to Chinese tariffs on U.S. agriculture exports, Canada, Mexico and the European Union (EU) are threatening similar action over U.S. imposition of 25% tariffs on imported steel and 10% tariffs on imported aluminum. The China tariff move was unilaterally opposed by most national business groups, including the U.S. Chamber of Commerce, which said, This is not the right approach. Senate Finance Committee Chair Orrin Hatch (R, UT) is not thrilled with the action, though he supports action to yoke up China on technology issues, and House Ways & Means Committee Chair Kevin Brady (R, TX) said of the move, I am concerned these new tariffs will instead hurt American manufacturers, farmers, workers and consumers. Senate Minority Leader Charles Schumer (D, NY), however, called the Trump action on the money, adding China is our real trade enemy. NAFTA Talks to Continue Over Summer; Perdue in Canada to Make Nice Canada s Foreign Minister Chrystia Freeland this week confirmed the U.S., Mexico and Canada will continue to negotiate to get NAFTA 2.0, with those talks continuing through the summer. Meanwhile, Agriculture Secretary Sonny Perdue was in Canada this week to smooth the troubled waters resulting from last week s name calling by U.S. trade officials at Prime Minister Justin Trudeau after Trudeau said his country would not be pushed around by U.S. tariff actions on steel and aluminum. Canada s retaliatory tariffs against U.S. exports in reaction to the steel/aluminum levies come into effect July 1. Freeland s remarks about the on-going NAFTA talks came after she met personally with U.S. Special Trade Representative Robert Lighthizer this week. She said the three nations have a mutual commitment to continue NAFTA talks, but no dates have been set. We re going to make a real push over the summer, she said. All three countries are clear that meaningful progress has been made to date and we need to keep working hard to get a deal on a modernized NAFTA, Freeland said, working to separate NAFTA 2.0 from the steel/aluminum tariff battle. Unresolved NAFTA issues include dairy, automobiles, the U.S. demand for a five-year sunset provision, intellectual property, labor rules and dispute settlement.

6 She dismissed the likelihood the U.S. and Canada could hammer out a bilateral trade deal, given Congress would have to approve the treaty, implementation difficulties would abound and such action would raise a collection of thorny issues that could be hard to sort out. Senior White House economic advisor Larry Kudlow said last weekend, the U.S. will not withdraw from NAFTA because we are heavy into negotiations. However, he said it remains possible a deal is not achievable, but that bilateral treaties between the U.S. and Canada and the U.S. and Mexico might work. Pruitt May be Subject of Oversight Hearings EPA Administrator Scott Pruitt s seemingly unending list of ethical and legal troubles is starting to cost him Republican support on Capitol Hill, and even President Trump, while still publicly supporting the former Oklahoma attorney general, says, I m not saying he s blameless. So far, no one is asking for Pruitt s resignation. The furor over Pruitt s behavior has reached the point that several GOP Senators want to see Pruitt brought back before the Senate Environment & Public Works Committee for an oversight hearing to answer questions. They say the allegations of improper behavior are distracting from Trump s agenda. However, committee Chair John Barrasso (R, WY) says he has no immediate plans to call Pruitt before his panel. Sen. Charles Grassley (R, IA) and Sen. Joni Ernst (R, IA) have both been strong critics of Pruitt over his handling of EPA s small refinery hardship waiver program, with Grassley going so far to threaten to call for Pruitt s resignation if he didn t cease issuing the waivers. New scandals swirling around Pruitt include allegations he asked his staff to get Republican donors to help find his wife a job, having an aide try and buy a mattress from the Trump International Hotel in Washington, DC, having staff research apartments, asking an aide to contact an Oklahoma energy consultant to help him get tickets to last January s Rose Bowl game, and getting staff to help his daughter get a White House internship. The Office of Special Counsel is reportedly considering how Pruitt uses his staff and whether there are political goals in his office operation, the New York Times reports. On the House side, Rep. Elijah Cummings (D, MD), ranking member of the Oversight Committee, went to the energy consultant, who acknowledges helping Pruitt get Rose Bowl tickets, but says he doesn t lobby EPA, to provide copies of all communications surrounding the exchange. EPA Notes EPA Sends WOTUS Rewrite to OMB; States, Groups File, GA Court Acts EPA and the Army Corps of Engineers completed their draft rewrite of the controversial waters of the U.S. (WOTUS) rulemaking and sent it to the Office of Management & Budget (OMB) for interagency review. Meanwhile, 15 agriculture groups banded together to file suit in federal court to declare the old WOTUS rule illegal, joining 14 states, led by North Dakota, seeking to get oral arguments scheduled in their separate court action. In a related development, the U.S. District Court in Georgia, issued a

7 preliminary injunction preventing the Obama rule from being implemented in 13 states. A third suit against WOTUS is pending in federal court in Texas. The Trump administration is seeking to define EPA and Corps authority under the Clean Water Act (CWA) to apply to a much narrower set of U.S. waters. Today, we are taking an important step toward issuing a new WOTUS definition and answering President Trump s call to ensure that our waters are kept free from pollution while promoting economic growth, minimizing regulatory uncertainty and showing due regard for the roles of the federal government and the states under the statutory framework of the CWA, said Administrator Scott Pruitt in a statement. Separate rules are keeping the Obama administration version of WOTUS from going into effect while the agency jumps through the hoops to repeal and replace the rule. Pruitt Doesn t Plan to Reallocate RFS Waiver Gallons; Says He has E15 Authority: Farmers South Dakota farmers this week reported EPA Administrator Scott Pruitt said he doesn t plan to reallocate the biofuels gallons reflected in small refinery hardship waivers to other biofuel mandates. And in other remarks made in the Midwest this week, Pruitt reportedly told producers he believes EPA has the administrative authority to allow E15 to be sold year-round, and that the agency s delay in making the final decision on E15 is why the ethanol industry is rankled. One industry exec called for Pruitt s resignation, referring to him as dead man walking. On the waiver gallons issue, in question are millions of gallons of biofuels that, absent the waivers from the Renewable Fuel Standard (RFS) blending mandate, would have been taken up by refineries. The reallocation is a major demand of the biofuels industry who contend the waivers have been issued to small refineries owned by major oil companies, and which Agriculture Secretary Sonny Perdue has branded demand destroyers. Pruitt said he s been told by administration attorneys he may not have the legal authority to reallocate the gallons. Contact Us Kathy Zander, Executive Director Roxanne Rice, Finance Director Phone: 605/ Fax: 605/ info@sdaba.org Website: