Inside D.C.

Congress dithers over election year COVID 19 aid

The fact no media outlet or network talking head, and only a handful of social media trolls have linked the global outbreak of the novel coronavirus (COVID 19) to the farm-to-fork food chain is one of the few rays of sunshine for both the industry and consumers in a very murky new reality. 

A second nugget is the March 20 declaration by the Department of Homeland Security (DHS) that food/agriculture is officially one of 16 “essential critical infrastructure workforces.”  While most assume this, apparently “guidance” was needed because some state and local governments were set to classify some ag segments as “non-essential businesses.”  DHS told state/local leaders not to interfere in the farm/food supply chain when restrictions to stem COVID 19 transmission are contemplated or imposed

Congress has enacted two bail-out packages.  One spends $100 billion on paid leave, unemployment insurance, tax breaks/forgiveness and free COVID 19 testing; the other provides $8.3 billion in emergency spending to primarity reinforce the public health system.  These are the first two stepss of a three-step strategy to toss an economic life preserver to industries decimated and employees laid off, fired or otherwise unemployed due to government actions to stem the spread and control COVID 19.

The third step is congressional blessing of the mother of all federal economic bailout packages — $2.6 trillion in new spending, loans, grants, tax breaks, etc. It’s expected to be approved March 25 after three days of classic congressional dithering and deal cutting.  

For perspective, the current total U.S. deficit is $1.6 trillion and change; our total national debt is a record $22 trillion.

Last week featured Trump talking about a $500-billion economic stimulus package, translated by Capitol Hill Republicans to mean a $1-trillion package.  That total, once seized upon by Senate lawmakers of both political stripes, morphed into a $1.6-trillion bill, only to be trumped by Democrat demands which pushed the price tag to roughly $2 billion. Once deals are cut, the price tag will sit north of $2.6 trillion.

Democrats blocked the first two versions of the Senate GOP bill,forcing the chamber to “negotiate” for three days over “corporate bailouts,” executive salaries, stock buybacks and the future of the Market Facilitation Program (MFP).

While Agriculture Secretary Sonny Perdue continues to say there likely won’t need to be a third tranche of MFP payments to keep farmers and ranchers financially whole, farm groups nevertheless called on Congress to ensure the MFP money is in the USDA account.  Sen. John Hoeven (R, ND), chair of the Senate ag appropriations subcommittee, assured producers money to replenish Commodity Credit Corp. (CCC) emergency borrowing authority will be part of the deal.  And the GOP wants to expand the CCC pot from $30 billion to $50 billion.

Democrats told Republicans lawmakers they won’t accept the MFP increase unless two things happen:  First, the universe of commodities eligible for MFP payments expands to include specialty crops, like the ones grown in agriculture committee ranking member Sen. Debbie Stabenow’s (D, MI) state.  Second, the GOP will have to eat an increase in the $15 billion already earmarked for expanding federal food stamp benefits. There is also about $9 billion slated for child nutrition programs.  Hoeven wants the CCC increase badly enough he agreed to rewrite the authorizing MFP funding language to make it crystal clear not just livestock interests would get help, but other crop producers as well.

The bill may also carry language extending sign-up periods for various farm support and insurance programs, expanded commodity/producer eligibility for various government largesse, and efforts to generally ensure eligibility for farmers, small/medium agribusinesses and others to take advantage of loan/loan guarantee/grants and federal tax breaks. 

The devil is in the details and we won’t know what actually makes the cut until the final legislation is parsed.  Be assured Congress will approve it and Trump will sign whatever winds up on his desk as the final deal. He’ll sign, but only after blasting Democrats on both sides of the Hill for spending federal dollars like drunken sailors and on pet projects not COVID 19 related. 

Two things to remember in all of this:  It’s an election year in which not just Congress, but the White House is up for grabs.  COVID 19 is an historic event, and both Trump and Congress will be judged on how they handle it — and they know it.

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