Policy Updates and Issue News January 2018

The U.S economy is off to a good start this year according to the major professional services and accounting from CliftonLarsonAllen. Here are several factors that will influence the 2018 economy:

Positives

• Employment is strong
• Housing market is firm
• Risk of recession appears low
• Consumer and small business confidence is high
• S. corporate earnings are positive

Negatives

• Stocks and bonds 7-10 year returns are expected to be lower than historical averages
• Geopolitical risks (terrorism) are present
• S. policy uncertainty (trade, health care, immigration, etc.)

In April, 2017, President Trump established the Interagency Task Force on Agriculture and Rural Prosperity chaired by Secretary of Agriculture Sonny Perdue. On January 8, 2018, the President and Secretary Perdue traveled to Nashville where the President delivered his Rebuilding Rural America   address, his first major speech targeted toward agriculture and rural areas. The President and Secretary Perdue took this opportunity to unveil the task force recommendations to the annual meeting of the American Farm Bureau. While there, the President also signed two executive orders making rural Broadband connectivity a priority of the Administration. Burton Eller was invited to represent the National Grange as a VIP guest of the White House for the President’s speech and signing of the executive orders.

The major Task Force on Agriculture and Rural Prosperity recommendations are:

• Achieving e-Connectivity for Rural America (fundamental catalyst to transform rural America)
• Improving Quality of Life (education, health services, rural housing, infrastructure, community resiliency)
• Supporting a Rural Workforce (available, reliable, trained, skilled, educated)
• Harnessing Technological Innovation (sound science, biotechnology, research, development, productivity)
• Developing the Rural Economy (access to capital, natural resources, regulatory reform, global market, infrastructure, tax reform)

Work Officially Begins

The House Agriculture Committee plans to officially begin work February 14 on the 2018 Farm Bill.  Unofficial work on the bill has been ongoing for months at the staff and leadership levels at both the House and Senate Agriculture Committees.   As Grangers know, farm bill legislation covers much more than farms and farmers; it also includes conservation, trade, forestry, energy, credit for beginning farmers, infrastructure, jobs, research, and nutrition. In fact, 80 percent of farm bill spending is for food assistance and feeding programs. The more traditional role of the farm bill protects against farm losses due to natural disasters through disaster assistance and crop insurance. It also provides a cushion for the individual producer who suffers a poor yield or low prices through a series of farm payment programs tied to specific commodities.

Dairy and Cotton “Fixes”

The safety net /loss protection programs for dairy and cotton in the last farm bill have not worked as envisioned. As a result, dairy and cotton producers have suffered disproportionate price loss compared to other commodities. Lawmakers hope to address stronger provisions for dairy and cotton in a disaster relief bill or an omnibus spending bill to get these costly provisions out of the way before the farm bill debate heats up. Should that not happen, dairy and cotton could become stumbling blocks in farm bill negotiations later on.

Food Stamps and Crop Insurance in Play

Supplemental Nutrition Assistance Program (SNAP), or food stamps, continues to consume the lion’s share of farm bill expenditures with 42 million people receiving SNAP benefits.   USDA and some Republican members of Congress are looking at work requirements for able-bodied SNAP recipients.    Another large farm bill expense item is crop insurance where USDA subsidizes premium costs to the producer. Several groups and some Democratic members of Congress are calling for an annual subsidy cap of $50,000. With calls from constituents to fund new farm bill programs and expand crop insurance for beginning farmers, vegetable growers and organic producers amid tough budget constraints, Congress will be challenged to find savings wherever they can. SNAP and crop insurance will be major hurdles for farm bill negotiations. The $1.5 trillion tax cut passed by Congress last month could make passing a farm bill more difficult by starving programs of funds.

ObamaCare Becomes More Acceptable

Congress has steadily been taking the sting out of ObamacCare. In the last two months, they have repealed the law’s insurance mandate and delayed a slew of controversial taxes including the so-called Cadillac tax on high-cost private health plans. More popular provisions of the law, including subsidies to help people buy coverage, expansion of Medicaid, and protections for people with pre-existing conditions, remain in place. People who qualify for the subsidies can find affordable coverage but those who do not qualify face much higher premium costs.

CHIP Agreement Passed

With strong bipartisan support, Congress has extended the Children’s Health Insurance Program (CHIP) through 2023. The $124 billion federal expenditure will provide six years coverage to nearly 9 million children and 275,000 pregnant women.

Work Requirements for Medicaid?

Guidelines could be released soon by the Trump Administration to require Medicaid recipients to work in order to receive coverage. Work requirements would only take effect if a state chooses to apply for a waiver from the federal government to impose work requirements. Currently nine states are applying to impose work requirements.

Immigration Shutters the Government

While not readily apparent to the public, the three day government shutdown in mid-January was more about immigration than funding the government. The bottom line was that Senate minority Leader Schumer (R-NY) and President Trump reached an impasse on an immigration deal. Schumer wanted to protect 700,000 so-called Dreamer/DACA immigrants from deportation and offered the President a $25 billion border wall. We’re not sure what the President’s counter offer was, but it caused Schumer to pull back his border wall offer and the federal government closed down for three days.

Congress Looks for Agreement

Behind the scenes, lawmakers from both parties continue to look for common agreement ground. A bipartisan group of Senators, Flake (R-AZ), Durbin (D-IL), and Graham (R-SC), are working on a deal that includes legal protection for Dreamers, border security, and restrictions on family migration also known as “chain migration.”   On the House side, a group of 150 representatives are supporting a bill by Goodlatte, (R-VA), Labrador, (R-ID), McSally (R-AZ) and McCaul, (R-TX).

Their package would allow DACA recipients a three-year renewal of legal status, but with no special pathway to citizenship (though they could apply for citizenship through normal legal pathways). It would also reduce legal immigration by 25 percent, add border control agents, and deny certain funding to so-called “sanctuary cities”.   The big question is whether Congress will attempt major comprehensive immigration reform or settle for a few targeted reforms like Dreamers and border wall.

Ag Workers Included

The House bill also includes the AG Act that was reported out of the House Judiciary Committee in October and strongly supported by the agriculture and food communities. The AG Act creates a new H-2C program that authorizes a 2-year work permit for work in agriculture, establishes an E-Verify system, caps worker numbers at 450,000 and requires health insurance coverage.   The National Grange is a member of the Agriculture Workforce Coalition and is working to include the AG Act in any immigration legislation considered by Congress.

Legislation to upgrade our nation’s neglected highways, bridges, broadband, locks, dams, water systems and other public assets may have a good chance to garner bipartisan support from Congress. The tax bill is done. Next come the budget (the continuing resolution expires February 8) and immigration battles. Infrastructure brings up the rear of major legislative initiatives for 2018 and is far less partisan than taxes, budgets and immigrants. Every congressional district has serious infrastructure concerns.

President Trump pushed his $1.5 trillion infrastructure plan in his State of The Union address. His plan calls for 25 percent of infrastructure funding to be devoted to rural areas defined as areas with less than 50,000 population. A key question is how much funding would come from the federal government and how much would need to be funded by public-private partnerships. The National Grange is a member of the Rebuild Rural Coalition which is pushing for several rural infrastructure priorities including rural Broadband deployment.

“Common sense is not so common.”
Voltaire

“It is the ability to take a joke, not make one, that proves you have a sense of humor.”
Max Eastman

“Good health and good sense are two of life’s greatest blessings.”
Publilius Syrus

“The three great essentials to achieve anything worthwhile are hard work, stick-to-itiveness and common sense.”
Thomas Edison

“Horse sense is the thing a horse has which keeps it from betting on people.
W.C. Fields