Farm Aid Package Close Via 2018 Farm Bill Extension; CR Into March Includes Disaster Aid

Note: Modified report today as I am in Kansas City to speak at a National Grain & Feed Assn. event. Then on to Champaign, Illinois, to speak at a meeting given by Strategic Farm Marketing.

— Farm-state officials continue to talk about a farm aid package along the lines we discussed Tuesday, including around $9 billion in direct payments for 2024 and another $1 billion for crop insurance rebates. Outgoing Senate Ag Chair Debbie Stabenow (D-Mich.) is pushing for specialty crop payouts and a budget baseline for her urban ag program. Once a final package is agreed, party leaders will have to sign on. All this, including one-year funding for so-called “orphan” programs, is part of extending the 2018 Farm Bill due to the inability of lawmakers to reach an agreement on a new measure. Last-minute changes are possible due to very liquid talks.

— Congress “races” to finalize funding bill before Dec. 20 deadline. Lawmakers are preparing to drop a stopgap measure tied to disaster relief this weekend, paving the way for Congress to pass the bill before the Dec. 20 funding deadline. House Appropriations top Democrat Rosa DeLauro (D-Conn.) expressed hope that the bill text will be posted over the weekend to allow for a vote next week ahead of the Christmas recess.

The stopgap is expected to extend funding into March, but negotiations over a disaster relief package, addressing Hurricanes Helene and Milton, have delayed progress. Speaker Mike Johnson (R-La.) acknowledged ongoing talks on all aspects of the bill, while Appropriations Chairman Tom Cole (R-Okla.) highlighted the urgency of avoiding automatic cuts set for April.

Sen. Thom Tillis (R-N.C.) noted disaster aid negotiations are nearing agreement, estimating the package at just under $100 billion. Tillis warned of intensifying pressure if the aid is not resolved promptly.

— RFK Jr. meeting with lawmakers in busy schedule. Robert F. Kennedy Jr., President Trump’s nominee to lead the Department of Health and Human Services (HHS), has a packed agenda with nearly two dozen meetings on Capitol Hill. One key meeting includes the incoming leader of the Senate HELP Committee, which could oversee his confirmation hearing. Sen. Chuck Grassley (R-Iowa) noted plans to discuss Kennedy’s impact on the agricultural sector but stated that their meeting will wait until January.

Of note: Kennedy continues to push people for key USDA roles under Brooke Rollins, Trump’s nominee to lead USDA. Mainstream ag lobbyists want production ag personnel in those top spots.

— House passes Water Resources Development Act (WRDA) of 2024. On Tuesday, the House of Representatives passed the WRDA Act of 2024 with overwhelming bipartisan support, voting 399-18. This legislation authorizes vital projects for the U.S. Army Corps of Engineers to enhance water infrastructure across the nation.

Key provisions:
• Project authorizations: $9.8 billion for 160 feasibility studies and 12 new or modified construction projects.
• Infrastructure improvements: Enhancements to ports, harbors, flood systems, and water-related infrastructure.
• Policy changes: Reforms benefiting counties and stakeholders.
• National dam safety program: Reauthorization through 2028 to bolster dam safety nationwide.
• Inland waterways: Measures to improve navigation reliability and freight capacity.

The Senate passed its version of WRDA 2024 unanimously on Aug. 1, authorizing $3 billion for 81 feasibility studies and 8 construction projects.

Next Steps: Both versions now head to a conference committee to reconcile differences. Stakeholders are optimistic about a final bipartisan bill likely included in an end-of-year legislative package.

— U.S. immigration surge: NYT analysis. An analysis by the New York Times, in collaboration with government officials and experts, reveals that the recent U.S. immigration surge is the largest in history. Here are seven major takeaways:

Record-high migration: Since 2021, net migration has exceeded eight million people, surpassing previous peaks in the late 1800s and early 1900s.

Population impact: Even after accounting for a larger population today, this surge slightly surpasses the migration rate during the Ellis Island era.

Foreign-born population record: As of mid-2023, 15.2% of the U.S. population was foreign-born, the highest since 1890.

Policy influence: President Biden’s welcoming policies were the primary driver, though global events like the crises in Haiti and Ukraine also contributed. A subsequent tightening of policies has slowed migration.

Unauthorized entries: About 62% of the eight million migrants entered the country illegally, per estimates from Goldman Sachs.

Political ramifications: Immigration played a significant role in the 2024 elections, fueling voter discontent and contributing to Republican gains, especially near the southern border.

End of the surge: Migration rates have declined sharply since mid-2024 and may drop further under expected stricter policies from the incoming administration.

(NYT; Analysis of data from the Congressional Budget Office and U.S. Census Bureau)

(NYT; Analysis of data from the Congressional Budget Office and U.S. Census Bureau)

(NYT; Department of Homeland Security)

— Biden faces pressure to act on immigration as Trump plans mass deportations. President Joe Biden is under growing pressure from Democratic lawmakers and allies to expand protections for immigrants in the U.S., amid concerns over Donald Trump’s pledge of mass deportations. Proposals include extending Temporary Protected Status (TPS), expediting DACA renewals, and addressing pending asylum cases. A Democratic Senate aide described the White House as “receptive” during private discussions. Meanwhile, Trump’s team is planning deportation facilities on 1,400 acres offered by Texas officials.

— Federal judge blocks Kroger/Albertsons merger, citing antitrust concerns. A federal judge in Oregon blocked the proposed merger of grocery giants Kroger and Albertsons, aligning with the Federal Trade Commission (FTC) in a decision that could potentially end the deal. U.S. District Judge Adrienne Nelson ruled that the merger, even with the planned sale of assets to C&S Wholesalers, would significantly reduce competition. “The proposed merger is likely to lead to unilateral competitive effects and is presumptively unlawful,” Nelson stated.

The decision follows similar rulings in Washington state, with another case pending in Colorado.

Kroger attorneys previously indicated that an injunction would effectively terminate the merger, though Nelson noted the companies could still pursue the merger through administrative proceedings. Both companies expressed disappointment and are evaluating their options. Nelson also criticized the divestiture plan to C&S Wholesalers, stating it was insufficient to maintain market competition.

Of note: The merger, announced in 2022, sought to combine the fifth- and tenth-largest retailers in the country. The companies own dozens of grocery chains, including Safeway, Vons, Harris Teeter and Fred Meyer. Supermarkets have been losing ground in recent decades to competition, and Kroger and Albertsons wanted to merge to better fight off Walmart and Amazon.

— Trump appoints Andrew Ferguson as FTC chair. Donald Trump named Andrew Ferguson as the next chair of the Federal Trade Commission (FTC). Ferguson, currently one of the FTC’s two Republican commissioners, will not require Senate confirmation. Under Lina Khan, the outgoing chair, the FTC has aggressively targeted big firms, especially tech giants, and sought to block mergers. While Ferguson is expected to continue scrutinizing tech platforms, he is likely to adopt a more business-friendly approach toward other industries, including artificial intelligence. Trump stated that Ferguson would oppose “Big Tech censorship.”

— Biden expected to block US Steel/Nippon deal on security concerns. President Joe Biden is expected to formally block the sale of US Steel to Nippon Steel later this month. The Committee on Foreign Investment in the U.S. (CFIUS) is set to refer the deal back to him by Dec. 22 or 23, according to Bloomberg. While the specific findings of CFIUS remain unclear, the referral suggests at least one panel member has raised national security concerns. US Steel shares have declined amid doubts about the deal’s approval, and Nippon Steel criticized the influence of politics over substantive security issues. Both Biden and President-elect Donald Trump have voiced opposition to the merger.

— GOP faces internal struggles on 2025 tax bill strategy. The Republican Party is divided over its approach to the 2025 tax bill, with Senate Republicans backing Majority Leader-elect John Thune’s (R-S.D.) proposal to address border security and defense priorities before tackling tax reform. However, House Republicans, grappling with a slim majority, remain unconvinced. This delay raises uncertainty about the extension of the 2017 tax code overhaul, potentially impacting taxpayers and preparers.

The split: Sen. Lindsey Graham (R-S.C.) supports prioritizing border security, while House Ways and Means Committee Chair Jason Smith (R-Mo.) warns that delaying tax legislation risks legislative inaction. The Wall Street Journal editorial board endorsed Thune’s strategy, cautioning against Smith’s approach as politically risky.

House Budget panel preview. A House Budget Committee hearing today will feature fiscal experts David Walker and Romina Boccia, who criticize recent bipartisan efforts to repeal provisions affecting Social Security benefits for public-sector workers. They warn these changes could worsen the deficit by $196 billion over a decade. Walker will also caution against President-elect Donald Trump’s proposal to exempt Social Security benefits from income tax, citing risks of insolvency for the Social Security Trust Fund.

Of note: House Speaker Mike Johnson (R-La.) Johnson plans to meet with Donald Trump at the Army/Navy game this weekend to discuss Republican strategies for the budget reconciliation process. House Budget Chair Jodey Arrington (R-Texas) suggests that if the Senate plan is adopted, the initial bill must be targeted and expedited, allowing time for the more complex economic package involving tax cuts and spending reductions.

— DGA report sparks debate over nutrition guidelines. The government’s Dietary Guidelines Advisory (DGA) Committee released its report, recommending reduced consumption of added sugars and red meat. The report highlights what it says is the link between unhealthy eating and rising rates of chronic diseases, calling for a shift in dietary habits to improve public health across the lifespan.

Path forward: The report will guide updates to the 2025 Dietary Guidelines, giving the next administration, potentially led by Trump appointee Robert F. Kennedy Jr., significant influence over the final recommendations. Kennedy is expected to prioritize reducing added sugars and ultra-processed foods in American diets.

Industry pushback: Agriculture groups and industry stakeholders, such as the National Cattlemen’s Beef Association, criticized the report’s focus on reducing red meat consumption. Ethan Lane from the association called the process “arbitrary,” citing insufficient scientific evidence.

Nutrition advocacy: Public health experts like Philip Kahn-Pauli praised the report for emphasizing produce, whole grains, and legumes. However, he acknowledged challenges in defining and evaluating the health impacts of ultra-processed foods, which could become a contentious issue under the incoming Trump administration.

Produce sector response: Organizations like the National Potato Council and International Fresh Produce Association expressed mixed reactions. While welcoming recommendations to increase fruit and vegetable intake, they opposed reductions in starchy vegetable consumption, questioning the practicality for everyday meal planning.

What’s next: Public comments on the report are open for 60 days. Meanwhile, stakeholders are preparing to influence the guidelines, ensuring their voices are heard before the report’s recommendations are finalized.

— Punchbowl News: Is David Scott done? It sure seems like it. House Ag Committee ranking member David Scott (D-Ga.) appears increasingly vulnerable in his bid to retain the top Democratic slot on the committee, concludes Punchbowl News. Amid mounting health concerns and missed votes, Scott has been absent from key candidate forums, leaving the field open for challengers Reps. Angie Craig (D-Minn.) and Jim Costa (D-Calif.). Based on our sources, Costa seems to have the inside track if there is a change.

Today marks a critical test for the 79-year-old lawmaker, as the Congressional Black Caucus (CBC) — historically a stronghold of support for Scott — holds its candidate forum. However, Scott has yet to confirm his attendance, raising questions about his commitment and viability.

Despite seniority and veteran status within the CBC, Scott’s health issues and lack of engagement have left some members undecided. His absence is stark against the active campaigning of his rivals, who have courted endorsements from groups like the Hispanic Caucus and the Progressive Caucus.

Of note: As the Democratic Women’s Caucus and Agriculture Committee meet today, Scott faces mounting speculation that he may withdraw from the race, a potential conclusion to an already beleaguered campaign.

— After helping push and implement trillions of dollars in payments, Yellen raises alarm over U.S. fiscal deficit. Janet Yellen, the U.S. Secretary of the Treasury, has expressed regret over the lack of progress in reducing the fiscal deficit during her tenure. Her concerns come amid a $1.8 trillion federal budget deficit for fiscal year 2024 — the third largest on record, surpassed only by pandemic-era deficits in 2020 and 2021. Key issues highlighted by Yellen:

Fiscal sustainability: Concerns about the long-term viability of current fiscal trends.

Deficit reduction: Emphasis on the urgency of addressing deficits in a high-interest-rate environment.

Primary fiscal deficit: The non-debt servicing deficit exceeds 3% of GDP and must be addressed.

Current fiscal context: The fiscal year (FY) 2024 deficit represents 6.4% of GDP, up from 6.2% in FY2023. Historically, this level is among the largest since the Great Depression, World War II, and the 2008 financial crisis.

Factors driving the deficit:
• Interest payments: Net interest on public debt surged 34% to $950 billion, second only to Social Security in federal expenditures.
• Entitlement programs: Social Security and Medicare remain significant fiscal pressures, costing $1.5 trillion and $869 billion, respectively.
• Defense spending: Reached $826 billion in FY 2024.

Challenges: Without reform, Moody’s projects deficits averaging 7% of GDP over the next five years, potentially nearing 9% by 2034. Public debt could rise from 97% of GDP in 2023 to 130% by 2034, with federal interest payments doubling relative to revenue and GDP.

— Trump to issue over 25 executive orders on first day in office: Reuters. President-elect Donald Trump is expected to sign more than 25 executive orders and directives on January 20, according to Reuters, citing two sources familiar with the effort. These actions are anticipated to focus on reversing Biden-era policies on the U.S. southern border, boosting U.S. energy production, reviewing federal hiring practices, and addressing protections for transgender students. Additional directives are planned in the following weeks. Trump’s team is reportedly preparing to counter legal challenges to some of these orders. For comparison, President Joe Biden signed 17 executive orders on his first day in 2021, many aimed at overturning Trump-era policies.

— NWS outlook: Widespread heavy rain and severe thunderstorm treats spreading up the East Coast today and through New England into tonight......A surge of cold air into the eastern U.S. today will be followed by a surge of arctic air into the northern U.S. through the next couple of days......Another round of significant lake effect snow expected through the next couple of days downwind of the Lakes.

(NWS)