Food Stamp Proponents Fear What’s Coming for Some States on March 1

WOTUS | Farm bill hearing | Supreme Court and student loan debt forgiveness program

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February 26, 2023 05:51 PM

WOTUS | Farm bill hearing | Supreme Court and student loan debt forgiveness program

Washington Focus

Lawmakers are back, and the issues remain the same: (1) Eventual need to either hike or postpone the debt limit; (2) Work on fiscal year 2024 appropriations bills; (3) continue hearings and behind-the-scenes work on a new farm bill. Meanwhile, a major food stamp/SNAP issue also takes center stage this week.

The Supreme Court on Tuesday will consider the fate of President Joe Biden’s student loan debt forgiveness program, which is currently on hold. Biden’s program would offer up to $20,000 of debt relief to millions of qualified borrowers, but it has been met with legal challenges since it was announced. The Biden administration issued the sweeping forgiveness policy using authority it claimed through the HEROES Act of 2003, which granted the Secretary of Education the power to forgive loans during national emergencies, a policy that originally stemmed from the Sept. 11, 2001, terrorist attacks.

An analysis by the New York Fed found that roughly $441 billion of federal student loans are eligible for forgiveness under the proposal, canceling about 30% of all outstanding federal student loan debt. That forgiveness proposal is now on hold after an injunction by the 8th U.S. Circuit Court of Appeals. On Tuesday, The Supreme Court of the United States final decision is expected by June 2023.

If the Biden Administration’s forgiveness plan survives the court challenge, it will mark the largest mass discharge of consumer debt in modern history, according to the New York Fed. About 40% of those with federal student loan debt would have a zero balance; even more would have a much smaller monthly payment.

But “if payments resume without debt relief, we expect both student loan default and delinquencies to rise and potentially surpass pre-pandemic levels,” warned Fed researchers. “We note a stark increase in new credit card and auto loan delinquency for borrowers with eligible student loans over the past few quarters, growing at a faster pace than those without student loans and those with ineligible loans,” they wrote. Those missed payments suggest that some federal student loan borrowers are having trouble meeting their monthly debt obligations. “We expect these delinquency patterns to worsen if federal student loan payments resume without relief,” said the report.

If student loan borrowers expect future debt cancellation, they may borrow even more, said researchers, which would increase debt balances even more sharply. “Absent direct policies to address this growing burden, taxpayers may be again called to for relief in the future,” they concluded.

Funding focus. The Committee on House Administration will hear from chairs and ranking members of each of the individual House committees on Tuesday and Wednesday about their respective biennial funding requests.

Food stamps/SNAP will be back in the news this week, and not just because of the traditional new farm bill debate about its funding. As of March 1, the emergency allotment for individuals and households enrolled in the federal Supplemental Nutrition Assistance Program, or SNAP, will end in 32 states, the District of Columbia, Guam and the U.S. Virgin Islands. The emergency allotments added almost three years ago allowed SNAP households to get an additional $95 or more (depending on household size and income) in monthly benefits.

Background: The boost to SNAP benefits was a temporary strategy authorized by Congress to help low-income individuals and families deal with pandemic hardships. The 2023 Consolidated Appropriations Act passed by Congress ends emergency allotments (EA) after the February 2023 issuance, per USDA’s Food and Nutrition Service. By March 2023, all households receiving SNAP benefits will return to getting pre-pandemic amounts — erasing the added supplement. That’s a decrease of anywhere from $95 to $250 per month for a given household. After the cuts, payments will go down to about $6.10 per person, per day, according to the Center on Budget and Policy Priorities. That’s around $2 a meal. Other SNAP waivers, such as the temporary student exemptions, are expected to remain in effect until the end of the federal public health emergency, which is expected in May. Some states already ended increased SNAP benefits. Eighteen states opted to end EA benefits before the March 2023 deadline, so SNAP recipients in those states will not see additional changes to their benefits as the program ends nationally. The states that previously ended EA benefits are Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kentucky, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee and Wyoming. Once the federal boost to SNAP benefits ends, some states may opt to use their own funds to provide residents with benefits that are higher than the federal minimum. For example, starting in March 2023, SNAP participants in New Jersey will receive a minimum of $95 a month in food assistance benefits, an increase of $72 per month over the federal minimum of $23 month. Several other states are considering similar legislation.

Food stamp proponents note the change comes when food prices in January increased 10% over the same month last year.

Stacy Dean, deputy undersecretary for USDA, acknowledged that the emergency benefits had proved “powerful” for recipients. “That can’t be underscored enough in the difference it’s made in mitigating increases in hunger and addressing economic hardship and poverty,” Dean said. She added that while the program’s expiration “will be very difficult,” the extra aid it delivered “was always designed to be temporary.”

Program costs. More than 42.3 million people participated in SNAP as of October, the latest period for which federal data is available. Participation hadn’t previously surpassed that level since the summer of 2020. The program’s total cost for fiscal year 2021 was $113.68 billion, according to the Congressional Research Service. That included nine months of a 15% increase to the maximum benefit as part of the emergency allotments.

Other ag-related events on tap this week include, with our analysis:

Monday: American Enterprise Institute forum, “The State of the Farm Economy.” The conservative think tank usually goes against many mainstream ag programs, so expect the same.
Tuesday: National Ethanol Conference, through Thursday. We already know all the lingering biofuel issues, and they again will be discussed this week. What we need is decisions on some of those issues from the Environmental Protection Agency.
Tuesday: House Ag Committee hearing, “Uncertainty, Inflation, Regulations: Challenges for American Agriculture.” Too bad the Ag panel can’t do much about all those topics. The obvious key to a new farm bill is how much funding the two Ag panels will have. While most assume “baseline funding,” a few others say Ag panel leaders should press leaders in their party and the White House for additional funding due to the obvious failure of Title 1 to keep up with farmer safety net needs. They say put a chunk of the billions of dollars spent on ad hoc disaster programs (which is not included in the farm bill baseline) over the past few years into a modified farm bill baseline. The need is there. The arguments in favor of doing so are there. So, let’s see if ag leaders lead on this important issue, rather than get bogged down, as usual, with myopic policy issues.
Tuesday: House Transportation and Infrastructure Committee meeting to consider a resolution of disapproval for the Biden administration’s Waters of the U.S. (WOTUS) rule. The sound and fury will come for sure. Key is when the Supreme Court rules on the matter. Note: The Congressional Review Act provides an expedited process for striking down regulatory measures, but it must pass both houses of Congress and then be signed by the president. Even if the resolution clears the House, it will have hurdles in the Senate and President Joe Biden would very likely veto it. This is an example of how Congress spends time on issues that take time and go nowhere, but then complain they do not have time to finish a farm bill or appropriations bills on time.
Wednesday: Senate Ag Committee hearing on farm bill conservation and forestry programs. Only in Washington can there be approved legislation in 2022 provide around $20 billion in additional conservation program funding and then in 2023, face more calls for more funding. To use a favorite term among Democrats/White House: where is the equity?

Critical minerals. The House Natural Resources Subcommittee on Energy and Mineral Resources on Tuesday will hold a legislative hearing on the Permitting for Mining Needs Act of 2023. The bill, introduced by Rep. Pete Stauber (R-Minn.), aims to revisit the National Environmental Policy Act and bolster the domestic production of critical minerals used for clean energy, along with defense and technology needs. The legislation has backing from the National Mining Association and would cut the environmental assessment process for hardrock mining permitting to no more than 12 months, set the timeline for environmental impact statements to a maximum of two years and designate a federal agency to review the applications.

EPA confirmation hearing. Senate Environment and Public Works Committee will hold a confirmation hearing on Wednesday for Joseph Goffman, who was nominated by President Joe Biden to head the EPA’s Office of Air and Radiation, where he has been leading on an acting basis since January 2021. Sen. Bernie Sanders (I-Vt.) has threatened to vote against Goffman until the EPA commits to use funding from the Inflation Reduction Act (IRA) to support residential rooftop solar power. On that front, EPA recently introduced plans for the Greenhouse Gas Reduction Fund, which will use $7 billion in funding from the IRA to award competitive grants for states, tribes and municipalities to deploy rooftop solar, community solar and solar storage projects.

Antitrust report card. The Technology Policy Institute will host its Antitrust Conference on Monday, with sessions focused on economics at antitrust agencies, reassessing the need for antitrust legislation and a Biden administration antitrust midterm report card. Speakers include Susan Athey, principal expert at the Antitrust Division of the Department of Justice; and Aviv Nevo, director of the Bureau of Economics at the Federal Trade Commission.

President Joe Biden and German Chancellor Olaf Scholz are expected to meet Friday at the White House to discuss efforts to bolster support for Ukraine.

India’s government this week hosts the G20 group of countries as it welcomes foreign ministers, including U.S. Secretary of State Antony Blinken. India’s non-aligned role, as a democracy that chooses not to challenge Russia’s aggression in Ukraine, leaves it either isolated or in a useful swing position.

Tuesday is Election Day in Chicago, where incumbent Mayor Lori Lightfoot faces a slate of eight challengers, all Democrats, including six Black candidates — the city’s racial split is very roughly one-third black, one-third Latino and one-third white. Crime has dominated the debates so far, and all of the candidates back increasing the police budget. Lightfoot is one of four Black mayors leading the four largest cities in America. Unless one wins over 50% of the vote, which nobody thinks is likely, the top two will compete in a run-off on April 4.

An autobiography by Florida Gov. Ron DeSantis (R) is set to be released Tuesday amid speculation that he’s gearing up to launch a 2024 presidential bid.

The Conservative Political Action Conference (CPAC) will begin Wednesday just outside Washington, DC. Billed as “the largest and most influential gathering of conservatives in the world,” CPAC will feature speeches from the three Republican presidential candidates who have announced their intention to run, as well as former Secretary of State Mike Pompeo, who has said he’s also considering a bid for the presidency.

Calendar of Key Events

Monday, Feb. 27

• Vice President Kamala Harris to highlight “progress on the administration’s efforts to expand affordable high-speed Internet nationwide.”

• State of the farm economy. American Enterprise Institute for Public Policy Research discussion on “The State of the Farm Economy.”

• Rural broadband. Fiber Broadband Association virtual discussion on “How Connect2first and Other Rural Utility Providers are Deploying Broadband to Their Communities Faster.”

• Rebuilding Ukraine’s economy. Atlantic Council discussion on “How to Sustain and Rebuild Ukraine’s Economy.”

• Antitrust issues. Technology Policy Institute 2023 Antitrust Conference including remarks by Susan Athey, principal expert at the Justice Department’s Antitrust Division; and Aviv Nevo, director of the Federal Trade Commission’s (FTC) Bureau of Economics; and several former FTC officials.

• Clean energy. Aspen Institute roundtable event on “Reimagining American Clean Energy Innovation.”

• Immigration issues. Society for Human Resource Management 2023 Employment Law and Compliance Conference, with Doug Rand, senior adviser at U.S. Citizenship and Immigration Services, participating in a discussion on “Current Employment-Based Immigration Issues.” Runs through Tuesday.

• Russia suspension of START treaty. Brookings Institution discussion on “Russia suspends its participation in New START: Arms control and risk reduction in the current moment.”

• Europe’s support for Ukraine. Atlantic Council discussion on “As long as it takes: The European Union’s support for Ukraine.”

Tuesday, Feb. 28

• Challenges for rural America. House Ag Committee hearing on “Uncertainty, Inflation, Regulations: Challenges for American Agriculture.”

• Oversight of U.S. military support for Ukraine. House Armed Services Committee hearing on “Oversight of U.S. Military Support to Ukraine.”

• Conflict in Ukraine. Senate Armed Services Committee hearing on “Conflict in Ukraine.”

• Response to Turkey’s earthquake. Atlantic Council virtual discussion on “International Response to the Earthquake and How Will Turkey Move Forward?”

• FY 2024 budget: Small Business. House Small Business Committee meeting on Committee Budget Views and Estimates for FY 2024.

• Oversight plans for 118th Congress. House Administration Committee meeting on the Committee Oversight and Authorization Plan for the 118th Congress.

• Sustainable energy. Business Council on Sustainable Energy and BloombergNEF briefing on the 11th edition of the “Sustainable Energy in America Factbook.”

• U.S./China issues. House Science, Space and Technology Committee hearing on “United States, China and the Fight for Global Leadership: Building a U.S. National Science and Technology Strategy.”

• Combatting China’s aggression. House Foreign Affairs Committee hearing on “Combating the Generational Challenge of CCP (Chinese Communist Party) Aggression.”

• Sanctions and export controls. Senate Banking, Housing and Urban Affairs Committee hearing on “Advancing National Security and Foreign Policy Through Sanctions, Export Controls, and Other Economic Tools.”

• U.S. border issues. House Homeland Security Committee hearing on “Every State is a Border State: Examining Secretary Mayorkas’ Border Crisis.”

• Energy legislation. House Energy and Commerce Energy, Climate, and Grid Security Subcommittee markup of several pieces of energy-related legislation.

• House Judiciary oversight plan. House Judiciary Committee meeting on “The Committee on the Judiciary Authorization and Oversight Plan for the 118th Congress.”

• Transportation and Infrastructure panel markup. House Transportation and Infrastructure Committee markup of several items, including “The Authorization and Oversight Plan for the Committee on Transportation and Infrastructure — 118th Congress”; the “FY 2024 Views and Estimates of the Committee on Transportation and Infrastructure” and more.

• Ways and Means markup on budget, other issues. House Ways and Means Committee markup of HR 1163, the “Protecting Taxpayers and Victims of Unemployment Fraud Act”; the “Views and Estimates Letter to the Committee on the Budget”; and the “Oversight Plan for the 118th Congress.”

• Energy issues hearing. House Natural Resources Energy and Mineral Resources Subcommittee hearing on the “Transparency and Production of American Energy Act of 2023”; and HR 209, the “Permitting for Mining Needs Act of 2023.”

• Homeland Security oversight. House Homeland Security Committee meeting on the “Committee’s Oversight Plan for the 118th Congress.”

• Ukraine oversight. House Appropriations Defense Subcommittee hearing on “Ukraine Oversight.”

• Covid situation. House Oversight and Accountability Select Coronavirus Pandemic Subcommittee hearing on “Roundtable — Preparing for the Future By Learning From the Past: Examining Covid Policy Decisions.”

Wednesday, March 1

• Farm bill hearing: Conservation and forestry. Senate Ag Committee hearing on “Farm Bill 2023: Conservation and Forestry Programs.” Terry Cosby, chief of the Natural Resources Conservation Service, Zach Ducheneaux, administrator Farm Service Agency, and Randy Moore, chief of U.S. Forest Service to testify.

• Debt limit. Washington Post Live virtual discussion on “The Debt Limit, Bipartisanship and the GOP.”

• FAA nominee. Senate Commerce, Science and Transportation Committee hearing on the nomination of Phillip Washington to be administrator of the Federal Aviation Administration.

• EPA nominee. Senate Environment and Public Works Committee hearing on the nomination of Joseph Goffman to be assistant EPA administrator for air and radiation.

• FCC issues. Final day of the ACA Connects, America’s Communications Association 2023 Summit with the theme “Shaping the Future,” with remarks from FCC Commissioner Nathan Simington and FCC Commissioner Brendan Carr.

• Russia’s invasion of Ukraine. Washington Post Live holds a virtual discussion on “World Stage: Ukraine,” focusing on the war one year on, U.S. support for the country and the stakes for the global order.

• U.N. oversight. House Appropriations State, Foreign Operations and Related Programs Subcommittee hearing on “Oversight Hearing — United Nations.”

• Economic costs of rising seas. Senate Budget Committee hearing on “Rising Seas, Rising Costs: Climate Change and the Economic Risks to Coastal Communities.”

• Russia’s war in Ukraine one year later. The United States Institute of Peace (USIP) holds a discussion on “One Year Later: Russia’s War Against Ukraine.”

• U.S./-China tensions. The International Institute for Strategic Studies (IISS) holds a discussion on “US-China Tensions: New Implications for the Indo-Pacific.”

Thursday, March 2

• Transatlantic trade. American Enterprise Institute for Public Policy Research discussion on “Transatlantic Trade and Cooperation in Times of Global Turmoil.”

• SEC meeting. Securities and Exchange Commission teleconference of the Investor Advisory Committee.

• Putin and Russia’s war in Ukraine. Center for a New American Security virtual discussion on “Russian Political Stability: Assessing How the Kremlin’s War in Ukraine is Affecting Putin’s Hold on Power.”

• Pandemic lessons. Washington Post Live virtual discussion on “Lessons from the Pandemic,” focusing on pandemic preparedness and the resiliency of the global health system.

• China/Russia relations. Institute of World Politics lecture on “No Limits Partnership: The China/Russia Information Nexus.”

• Battle for Ukraine. Johns Hopkins University Paul H. Nitze School of Advanced International Studies virtual discussion on “Democracy in 2023: The Battle for Ukraine and Other Challenges.”

Friday, March 3

• 2023 trade agenda. Washington International Trade Association 2023 Congressional Trade Agenda.

• Clinton Foundation. 2023 Clinton Global Initiative University annual meeting.

Key Economic Reports and Fed Speakers for the Week

Several Federal Reserve officials will speak this week and if recent history is any barometer, what they say or don’t say could be market moving. Meanwhile, data this week on home prices and pending sales will gauge real-estate health.

Monday, Feb. 27

Census Bureau releases the durable goods report for January. Economists think that new orders for manufactured durable goods declined 3%, to $278 billion.
The National Association of Realtors reports the number of home sales based on contract signings in January. Pending home sales rose in December from the previous month, ending a string of six consecutive months of declines.
Federal Reserve Governor Philip Jefferson will present on “Recent Inflation and the Dual Mandate” at Harvard University.
Earnings from Occidental Petroleum, Workday and Zoom Video Communications.

Tuesday, Feb. 28

Conference Board releases its Consumer Confidence Index for February. The consensus estimate is for a 109.2 reading, slightly higher than January’s. The index has rebounded from the 2022 low in July, buoyed by a strong labor market. In January, nearly half of respondents said that jobs were “plentiful,” while only 11.3% said that jobs were “hard to get.”
S&P CoreLogic releases its Case-Shiller National Home Price Index for December. Expectations are for home prices to show a 4.9% increase, year over year, following a 7.7% gain in November. Annualized home-price growth peaked at a record 20.8% last March and has decelerated every month since then.
Institute for Supply Management (ISM) releases its Chicago Business Barometer for February. The consensus call is for a 45 reading, roughly even with the January data. The index has had five consecutive monthly readings below 50, indicating a contracting economy, but this hasn’t shown up in the gross-domestic-product data, with fourth-quarter GDP growing at a seasonally adjusted annual rate of 2.7%.
Earnings from Target, Bank of Montreal, Bank of Nova Scotia, Monster Beverage, AutoZone and Ross Stores.

Wednesday, March 1

MBA Mortgage Applications
S&P Global and the Institute for Supply Management release February surveys of purchasing managers measuring activity in the U.S. manufacturing sector. Preliminary survey data showed the U.S. manufacturing sector contracting but at a slower pace. ISM releases its Manufacturing Purchasing Managers’ Index for February. Economists forecast a 47.9 reading, in line with the January figure. The index has been below the expansionary level of 50 since November.
The Commerce Department reports on construction spending in January. Construction spending fell in December from the prior month, with declines in both residential and nonresidential outlays.
Earnings from Salesforce, Royal Bank of Canada, Lowe’s, Dollar Tree and Okta.

Thursday, March 2

Jobless Claims: The Labor Department reports the number of workers filing for unemployment benefits, a proxy for layoffs, in the week ended Feb. 25. Initial jobless claims ticked down in the prior week, remaining below the 2019 prepandemic average.
Fed Balance Sheet
Money Supply
Fed Gov. Christopher Waller will discuss his economic outlook at the Mid-Size Bank Coalition of America conference.
earnings from Costco, TD Bank, Anheuser-Busch Inbev, Kroger, Dell, Hormel Foods, Hewlett Packard, Best Buy, Burlington Stores, Macy’s, Sprouts Farmers Market, Victoria’s Secret & Co., Nordstrom, Six Flags and Utz Brands.
EU releases February inflation figures for the eurozone. The bloc’s consumer prices were 8.5% higher in January from the same month a year earlier, the third straight month of easing eurozone inflation

Friday, March 3

S&P Global and the Institute for Supply Management (ISM) release February surveys of purchasing managers measuring activity in the U.S. services sector. ISM releases its Services PMI for February. Expectations are for a 54.5 reading, about one point less than previously. The services sector has held up better than the manufacturing sector, as there is still pent-up demand from pandemic restrictions.
Atlanta Fed President Raphael Bostic delivers remarks at the Racial Inequality Conference at the University of California-Santa Barbara.
Richmond Fed President Tom Barkin will speak at the Stanford Institute for Economic Policy Research.
Fed Governor Michelle Bowman takes part in a panel on Design Issues for Central Bank Facilities in the Future at the Chicago Booth Workshop on Market Disfunction.

Key USDA & international Ag & Energy Reports and Events

The United Nations’ monthly food price index is scheduled on Friday. On the international ag front, there is sugar conference in Dubai and a seminar in Singapore that will discuss the Asia grain and animal feed market.

For the energy sector, International Energy Week will draw senior figures from across the industry, investors and government to London. Japan and China also host major energy conferences.

Monday, Feb. 27

Ag reports and events:

Export Inspections
Chickens and Eggs
Peanut Stocks and Processing
Trout Production
Dubai Sugar Conference, day 1
Earnings: Olam, FGV