Next White House, Congressional Leaders Meeting on Debt Limit Set for Tuesday

Turkey election goes into runoff | Ukraine: Black Sea grain deal uncertain; no talks planned

USDA daily export sale: 100,000 metric tons soybean meal to Poland during 2022-2023 marketing year.

Lawmakers are cautiously optimistic that debt-limit talks will make progress this week, though they don’t expect an immediate breakthrough when President Joe Biden meets again with congressional leaders on Tuesday. The meeting will most likely lead to “another meeting,” Rep. Tom Cole (R-Okla.) said Friday. It’s unlikely there will be a handshake deal on spending levels at the end of the discussion, he said. “The staff is very engaged. I would characterize the engagement as serious, as constructive,” said Lael Brainard, head of the White House’s National Economic Council, on CBS’ Face the Nation. Rep. Michael McCaul, a Texas Republican, told ABC’s This Week: “I think defaulting is not the right path to go down. So I am an eternal optimist.’’ He added, “this is always a game we play, every Congress, you know, in daring each other to jump off the cliff. It’s a dangerous game.”

Eurozone industrial production weakens in March. The drop of -4.1% in Eurozone production in March likely overstates the weakness at the end of the first quarter, due to a curious decline in Ireland, says ING Economics. But, most major economies did post significant declines in production, signaling broad weakness for industry in March. Meanwhile, the European Commission raised its Eurozone inflation outlook and warned of “persistent challenges.”

Global investors seeking to trade China’s reopening will have a new strategic tool from Monday: onshore interest-rate swaps. More in China section. Meanwhile, Chinese authorities said they sentenced an American citizen to life in prison on espionage charges, in a case that could further strain relations between Beijing and Washington.

A group of former Soviet republics has emerged as a major transshipment hub for U.S. and European computer chips, lasers and other products with civilian and military uses headed for Russia, according to Western officials and data compiled by the Wall Street Journal. More in Russia/Ukraine section. Meanwhile, the U.S. and its allies are grasping for ways to further tighten the screws on Russia’s economy as the invasion of Ukraine grinds on despite the broad sanctions the West has already levied on the Kremlin. The U.K. said it would give long-range attack drones to Ukraine as President Volodymyr Zelenskyy landed in Britain as part of a tour of European allies aimed at replenishing Kyiv’s war chest.

Ukraine says Black Sea grain deal uncertain; no talks planned this week. See Russia/Ukraine section.

Two big mergers aim to reshape the commodities market. The pipeline operator Oneok has agreed to buy Magellan Midstream Partners for $18.8 billion in cash and stock to create one of America’s biggest providers of natural gas storage and transportation. Meanwhile, the Australian gold miner Newcrest Mining plans to acquire a top rival, Newmont, for $17.8 billion.

Reaction to the Supreme Court’s Calif. Prop 12 ruling continues. See Livestock section.

CME Group Inc. is prepared to leave Chicago if the city and state take steps that are perceived as “ill-conceived,” its chief executive officer said in an interview. Mayor Brandon Johnson is being sworn into office after proposing new taxes, including one on financial transactions.

McDonald’s is liable for a “dangerously hot” chicken nugget that caused a child to suffer second-degree burn. Meanwhile, USDA is weighing a ban on chocolate milk and other flavored milks in elementary and middle school cafeterias. More on both in Food section.

The presidential election between Turkish President Recep Tayyip Erdogan and challenger Kemal Kilicdaroglu appears headed for a May 28 runoff. Neither candidate has reached the 50% threshold required to avoid a second round of voting, though both sides claimed to be in the lead.

Voters in Thailand’s general election backed pro-democracy parties and rejected the military-backed government. The two largest parties, Move Forward and Pheu Thai, will probably enter coalition talks, though the military establishment may not cede power graciously. Move Forward — which won the most votes and was founded by progressive young Thais in 2018 — wants to shrink the military and amend a law that criminalizes criticism of the monarchy.

Equities today: Global stock markets were mixed to firmer overnight. U.S. stock indexes are pointed toward firmer openings. Japan’s Topix index was set for its highest close since August 1990. Goldman strategists are bullish on the nation’s fundamentals and solid earnings. In Asia, Japan +0.8%. Hong Kong +1.8%. China +1.2%. India +0.5%. In Europe, at midday, London +0.5%. Paris +0.4%. Frankfurt +0.3%.

U.S. equities Friday and week: All three major indices finished with losses even after lifting of their lows into the close. The result was the Nasdaq eking out a gain of 0.3% for the week, while the S&P 500 was 0.3% lower and the Dow lost 1.1%. On Friday, The Dow was down 8.89 points, 0.03%, at 33,300.62. The Nasdaq fell 43.76 points, 0.35%, at 12,284.74. The S&P 500 declined 6.54 points, 0.16%, at 4,124.08.

Agriculture markets yesterday:

• Corn: July corn futures rose 4 cents to $5.86 1/4 and nearer the session high. For the week, July corn fell 10 1/4 cents.
• Soy complex: July soybeans fell 15 1/2 cents to $13.90, ending 46 1/2 cents lower on the week, while July meal rose $1.50 to $432.90, gaining $6.80 week-over-week. July soyoil ended 163 points lower at 49.52 cents, losing 481 points on the week.
• Wheat: July SRW wheat futures rose 7 3/4 cents to $6.35 and nearer the session low. For the week, July SRW lost 25 1/4 cents. July HRW rose 35 1/2 cents to $8.77, hitting a 5.5-month high and closing near mid-range. For the week, July HRW rose 34 cents. July spring wheat futures ended the week at $8.46, which represented a daily advance of 9 1/4 cents and a weekly rise of 10 cents.
• Cotton: July cotton rose 91 points to 80.53 cents but gave up 337 points on the week.
• Cattle: June live cattle futures ended the week at $164.40, up $1.45 on the day and $2.475 on the week. August feeder futures leapt $2.90 to a Friday settlement of $228.975; that represented a weekly jump of $7.55.
• Hogs: The lightly traded May hog contract went off the board at noon (CDT) Friday having edged up two cents to $76.625. It will cash-settle against Friday’s official hog index quote after it’s posted Tuesday. June hog futures rose 22.5 cents to end the week at 84.10. That marked a weekly rise of 32.5 cents.
  

Ag markets today: Wheat futures posted strong gains overnight, while soybeans traded solidly higher, and corn was mixed amid bull spreading. As of 7:30 a.m. ET, corn futures were trading fractionally lower to 4 cents higher, soybeans were 5 to 10 cents higher, SRW wheat was 14 to 15 cents higher, HRW wheat futures were 21 to 26 cents higher and HRS wheat was 19 to 20 cents higher. Front-month crude oil futures were modestly higher, and the U.S. dollar index is around 200 points lower this morning.

Market quotes of note:

• Fund managers have cut their stock holdings to their lowest levels relative to bonds since 2009. Yet, to some, the doom and gloom is a sign of hope. “You’ve got all this money on the sidelines,” said Nancy Tengler, chief investment officer of Laffer Tengler Investments. “In our view, when bearishness is that universal, it’s historically always been a great time to look for opportunities.”
  
• Fed Governor Philip Jefferson said progress on core inflation is “discouraging” and disinflation in core goods prices is taking longer than expected. More FOMC speakers appear at an Atlanta Fed confab from today, including Raphael Bostic, Tom Barkin, Lorie Logan and Austan Goolsbee.
  
• The debt limit debate is bad for markets either way, according to Morgan Stanley’s Michael Wilson. He says many are framing the event as “a lose-lose” given the volatility it’s likely to cause, even though most expect the situation will be resolved. He predicts sharp swings in equity markets.
  
• A recession and a credit crunch could spark $1 trillion of corporate debt defaults, according to Bank of America. They added that even if a full-blown downturn doesn’t hit in the coming years, a credit crunch would only be delayed, not averted.
  
• Higher interest rates aren’t as good for banks as they were in the past, Apollo’s Torsten Slok says in a note. “It used to be the case that higher long-term interest rates was positive for banks because higher long rates meant wider net interest margins. But since the Fed started hiking rates last year, this correlation has broken down.” Slok says higher rates are now unfavorable for banks because they have a negative impact on their assets, “and higher rates and an inverted yield curve increases the risks of a recession and hence credit losses.”
  
• More banking mergers? “If the stress continues, the banking regulators are going to have to permit M&A,” said Jonathan McKernan, a Republican on the board of the Federal Deposit Insurance Corp. He said regulators should also consider letting private-equity firms take positions in banks.
  

On tap today:

• Federal Reserve Bank of New York’s Empire State survey is expected to fall to minus 5 in May from 10.8 one month earlier. (8:30 a.m. ET)
• USDA Weekly Grain Export Inspections report, 11 a.m. ET.
• Bank of England virtual Q&A with Chief Economist Huw Pill at 12 p.m. ET
• WSJ Live Q&A: Energy Secretary Jennifer Granholm discusses America’s route to a clean energy future. 2:15 p.m. ET
• USDA Crop Progress report, 4 p.m. ET.
• Fed speakers: Atlanta’s Raphael Bostic opening remarks at an Atlanta Fed conference at 8:45 a.m. ET, Minneapolis’s Neel Kashkari to ACEC’s Minnesota Transportation Conference & Expo at 9:15 a.m. ET, and governor Lisa Cook to the U.C. Berkeley Spring 2023 Economics Commencement at 5 p.m. ET.
• China’s retail sales, industrial output and fixed-asset investment figures for April are due out at 10 p.m. ET.

Industrial production in the Eurozone experienced a significant decline of 4.1% month-over-month in March 2023, larger than the market consensus, which anticipated a 2.5% decrease. The magnitude of the decline was the most substantial since the pandemic-induced plunge, driven by a sharp decrease in the production of capital goods, including buildings and equipment used in the production of goods and services, which saw a notable drop of 15.4%. Among the economies within the Eurozone, Ireland experienced the most significant losses, with a plunge of 26.3% in output. Other countries that observed declines in industrial production were Germany (-3.1%), the Netherlands (-1.7%), France (-1.1%), and Italy (-0.6%). However, Spain’s industrial production saw a positive growth of 1.4%.

EU revises GDP and inflation forecasts higher. The European Commission revised its growth forecasts for the bloc’s economy in May 2023. The EU is expected to grow by 1% in 2023, compared to the previous winter forecast of 0.8%. For 2024, the revised forecast indicates a growth rate of 1.7%, up from the previous projection of 1.6%. Specifically, the German economy is projected to expand by 0.2% in 2023 and 1.4% in 2024. In terms of inflation, the Eurozone forecasts were revised upwards. The projected inflation rate for 2023 is now 5.8%, an increase from the previous estimate of 5.6%. For 2024, the forecasted inflation rate is 2.8%, up from 2.5%. The European Commission emphasized that as inflation remains high, financing conditions are expected to tighten further.

Convention halls across the country are filling up again, restoring a vital source of economic fuel that had been cut off during the pandemic and was slow to recover in many cities. The Events Industry Council, a federation of meeting-industry trade groups, said conference and hotel demand in North America surpassed 2019 levels in the fourth quarter. The Wall Street Journal reports (link) from Las Vegas, where conference spending flows to taxi drivers, waiters and even Elvis impersonators.

Market perspectives:

• Outside markets: The U.S. dollar index was weaker, with the yen and British pound all firmer against the greenback. The yield on the 10-year U.S. Treasury note firmed to trade around 3.50% with a higher tone in global government bond yields. Crude oil futures have moved higher, with U.S. crude trading around $70.75 per barrel and Brent around $74.90 per barrel. Gold and silver futures were slightly weaker, with gold trading around $2,016 per troy ounce and silver around $24.13 per troy ounce.

• The cost of insuring against a U.S. sovereign default has shot up to its highest since 2009, at around $7.40 for every $100 worth of Treasuries, according to S&P Global Market Intelligence.

• Gold mining giant Newmont will pay $19.2 billion to buy Australian rival Newcrest Mining, consolidating its position as the world’s biggest bullion producer and boosting its copper resources. The Denver-based miner will aim to increase cash flows by $2 billion in the two years after the deal closes through portfolio optimization. The transaction is the largest in the gold mining sector to date, and is just awaiting regulatory approval to go ahead. Newcrest’s shares rose 1.9% in Sydney on Monday after the deal implied a 30% premium to the company’s closing price of A$22.45 per share on Feb. 3.

• Oneok, an American pipeline firm, will buy Magellan Midstream Partners for $18.8 billion, creating one of the biggest oil and gas companies in the United States. The deal will allow Oneok, currently a transporter of natural gas, entry into Magellan’s crude-oil transportation business.

• White House envoy optimistic port talks to produce deal soon. A tentative agreement covering longshore workers at the largest U.S. ports is within reach after a year of negotiations between the union and employers, according to a Biden administration official involved in the talks cited by Bloomberg. Many importers and retailers have diverted cargo away from West Coast ports since contract negotiations began last May, worried about potential supply chain disruptions caused by labor actions or lockouts.

• The number of wildfires rose in Canada’s main oil-producing province over the weekend as a heat wave brought hot, dry conditions, prompting officials to warn of more blazes to come. Canadian oil and gas company Pipestone Energy said wildfires have disrupted oil production at its facilities in the Grand Prairie region of Alberta, leading to around 20,000 barrels per day (bpd) of production to be temporarily curtailed. But other companies restarted production last week.

• NWS weather outlook: Above-normal temperatures expand from West into Central U.S... ...Additional heavy rain and flooding possible for parts of the Southern Plains and Mid-Mississippi Valley into Monday... ...Heavy rainfall threat moving east into the lower Ohio and Tennessee Valleys on Tuesday.

Items in Pro Farmer’s First Thing Today include:

• Wheat and soybeans strengthen, corn mixed overnight
• Rainy weekend for some, more rains this week
• Record April NOPA crush figure expected
• Cash cattle fundamentals weakening
• Cash hog index picking up a little steam

— Ukraine says Black Sea grain deal uncertain; no talks planned this week. Ukraine says no talks are planned this week regarding an extension of the Black Sea grain deal, which is set to expire May 18. Olha Trofimtseva, a foreign ministry ambassador at large, said: “The situation overall (after talks last week) has not changed much, and we receive quite conflicting information about the grain deal and the possibility of its continuation.”

— Russia tried to destroy a U.S.-made Patriot air defense system in Ukraine last week with a hypersonic missile, two U.S. officials told CNN. The attack failed, and the Ukrainian military instead intercepted the missile using the Patriot system, the officials said, marking their first known successful Ukrainian use of the advanced air defense system only weeks after it arrived in [the] country.

— Yevgeny Prigozhin, the chief of Wagner Group, offered to share the location of Russian troops with the Ukrainian government, the Washington Post reported on Sunday (link), citing leaked American intelligence documents. He asked that, in return, Ukraine should withdraw its soldiers from the area around Bakhmut, where Wagner mercenaries have been taking heavy losses. The newspaper said Ukraine rejected the offer.

— President Zelenskyy is pledging to oust Russia from all of occupied Ukraine. Ukraine’s president vowed to reclaim the entire country while on his first visit to Germany since Russia attacked Ukraine last year, a trip that signaled that the tense relations between Kyiv and its biggest military and financial backer in Europe are thawing. Speaking alongside German Chancellor Olaf Scholz, resident Volodymyr Zelenskyy said Ukraine wouldn’t attack Russian territory but seek to recapture all occupied areas, including Crimea, the peninsula that Moscow annexed in 2014. He said that goal would be possible by the end of the year.

— Ukraine’s president, Volodymyr Zelenskyy, arrived in London for talks with Rishi Sunak, Britain’s prime minister. Ahead of the meeting, Britain’s government said it would send hundreds of new long-range attack drones to Ukraine. Sunak said it was a “crucial moment in Ukraine’s resistance” and vowed not to “let them down.” Britain is the latest stop in Zelenskyy’s tour of Europe, after visits to Italy, Germany and France.

— Sanctions end around. Russian customs data shows that millions of dollars of aircraft parts made by Boeing, Airbus and others were sent to Russia last year. Illicit trade networks are facilitating the flow of aircraft parts made by Boeing and Honeywell to sanctioned Russian airlines, bolstering the country’s economy, the New York Times reports (link). Meanwhile, the Group of 7 and the EU this week plan to announce new bans on Russian gas imports (link).

— A group of former Soviet republics has emerged as a major transshipment hub for U.S. and European computer chips, lasers and other products with civilian and military uses headed for Russia, according to Western officials and data compiled by the Wall Street Journal (link). U.S. and European Union exports of sensitive, so-called dual-use goods to countries in Russia’s neighborhood rose sharply in 2022. So did these countries’ shipments of these products to Russia. The data suggest Moscow continues to acquire crucial Western goods as it seeks to keep its economy afloat and its war machine running.

— The U.S. Treasury had just $88 billion of leeway left on May 10, down from about $110 billion a week earlier. Janet Yellen will update Congress within two weeks regarding the so-called “X-date” relative to the debt limit.

— The number of migrants seeking to cross the U.S./Mexico border dropped 50% Friday and Saturday from earlier last week, Homeland Security Secretary Alejandro Mayorkas told CNN. Border agents reported about 6,300 encounters Friday and 4,200 Saturday.

— China’s central bank injected funds, and global investors get a new tool to help them hedge exposure to the nation’s bond market. Some regulators in China will take a pay cut, and Hong Kong banks scrambling for mortgage clients are offering big rebates.

Details: The PBOC injected liquidity into the financial system for the sixth month in a bid to bolster economic growth. It added a net 25 billion yuan ($3.6 billion) via its medium-term lending facility, contrary to expectations it would skip a net injection for the first time this year. It kept its one-year MLF interest rate unchanged. Meanwhile, global investors seeking to trade China’s reopening got a new strategic tool: onshore interest-rate swaps that had an annual turnover of $3 trillion last year. The so-called Swap Connect program between mainland China and Hong Kong gives overseas funds with easier access to the derivatives that can help them hedge bond exposure.

— China’s Family Planning Association, a government body, will launch pilot projects in more than 20 cities to promote a “new era” of child-rearing. The schemes will encourage marriage and recommend that people share parenting responsibilities. It is the latest attempt by the Communist Party to boost China’s birth rate; in 2022 the country’s population shrank from the previous year for the first time in six decades.

— What is next after Supreme Court bombshell ruling in favor of Calif. Prop 12 pork program. The NPPC on Friday rushed a “zoom” call, not giving much advance notice of the event.

What NPPC said post-SCOTUS ruling. In essence, they are still picking up the pieces as the decision surprised them the way it came out. Regarding possible legislation to address Prop 12, NPPC CEO Bryan Humphreys said all options are on the table. “There are a number of conversations going on,” he said. “And we received comments from members of Congress who are just as frustrated by this ruling as we are. And so at this point, we haven’t ruled anything out.”

NPPC is having talks with officials in California and Massachusetts. Both were stayed by the courts in implementing Prop 1 until resolution of the Supreme Court case —California’s not until July 1, and Massachusetts’ until 30 days after the Supreme Court decision.

One concern to pork producers: Proposition 12 would allow private attorneys to enforce its provisions through lawsuits, meaning lawyers who think they see a violation of the measure could sue farmers, farmers markets, grocery stores or food stands. Similar “private rights of action” have allowed lawyers to shake down thousands of small businesses by filing drive-by lawsuits. These suits often force business owners either to pay a settlement or to incur devastating legal fees. On many occasions, businesses have simply closed rather than face either outcome.

The U.S. pork and ag industry, some say, misread the fate of California’s Prop 12 from the start, not providing necessary funding and personnel to defeat the initial California initiative. Prop 12 was written, funded and marketed by the Humane Society of the United States (HSUS). It was passed by more than enough votes, some say, because the HSUS used tactics to push people into voting, “yes.” The Prevent Cruelty California Committee, along with the HSUS, raised over $13 million in funds to campaign for this proposition. They also paid people to gather enough signatures to get the proposition onto the ballot; the cost to get the required signatures — 365,800 total, was reported at $2,199,613.72.

The Wall Street Journal, in an editorial (link) titled The Supreme Court’s Pork Chops, wrote: “Who says the Supreme Court marches in ideological lockstep? On Thursday a mixed majority upheld a California regulation that imposes enormous burdens on out-of-state pig farmers and carves up interstate commerce. The result will not be more constitutional clarity.” It adds: “Justice Gorsuch is right that the dormant Commerce Clause is a judge-made doctrine and state laws shouldn’t be struck down merely because they impose incidental costs on out-of-state business, as many do. But California’s rules impose a substantial burden on interstate commerce by any measure, which was a key concern of the Constitution’s Framers.”

The WSJ editorial concludes: “Justice Gorsuch writes that Congress, under its Commerce Clause authority, can pass a law that overrules state regulation like California’s. That’s a good message to send to Capitol Hill. But until that happy day, and especially in this polarized era, the majority opinion will embolden more states to impose their social policies on the commerce of other states. The Court’s majority also offers no clear guidance to lower-court judges who will have to decide challenges to those state laws. Don’t be surprised if the policy preferences of judges replace the judge-made doctrine the Court has now thrown over the side.”

— McDonald’s is liable for a “dangerously hot” chicken nugget that caused a child to suffer second-degree burn. Attorneys representing McDonald’s argued the nuggets — claimed to be over 200 degrees — were hot to avoid salmonella poisoning. A second trial will determine damages in a case that drew comparisons to the $2.7 million hot coffee lawsuit from 20 years ago. Link for more via Forbes.

— More U.S. consumers eat three or more snacks a day than two years ago, and last year’s U.S. snack sales rose 11% from the year prior, according to market-research firm Circana. That has translated into big business for snack makers such as Hershey and Mondelez International, which saw sales grow 30% and 22%, respectively, between fiscal 2019 and 2022 — outpacing other major food companies. A host of startups are aiming new products at America’s snacking habit, while established food companies including Campbell Soup and Kellogg are trying to make further inroads into the snack market. Link to more via the Wall Street Journal.

— USDA is weighing a ban on chocolate milk and other flavored milks in elementary and middle school cafeterias. Concern over the amount of added sugars children consume has sharply divided parents, child-nutrition specialists, school-meal officials and others, the WSJ reports (link). Supporters of restricting flavored milk say it has added sugars that contribute to childhood obesity and establish preferences for overly sweet drinks. But opponents, including the dairy industry and many school districts, say removing it will lead to children drinking less milk.

— USDA extends comment period on proposal to declare salmonella an adulterant in some uncooked chicken products. USDA’s Food Safety and Inspection Service (FSIS) said it will extend the public comment period on its proposed determination to declare Salmonella an adulterant in breaded stuffed raw chicken products when they exceed a very low level of Salmonella contamination. The comment period was originally set to end June 27, but the agency said it will hold the comment period open until July 27 “in response to requests from industry associations for additional time to determine and formulate comments on the impact of the proposal.”

— Gov. Roy Cooper (D-NC) vetoed a bill Saturday that would have banned abortions in the state after 12 weeks of pregnancy, following its approval by the General Assembly earlier this month, testing North Carolina’s GOP-led legislature after some Republicans suggested they would protect abortion rights.

— A Gerber baby formula that was recalled for possible contamination was still distributed to some U.S. retailers after the initial notice, according to the FDA. The products have not been linked to any illnesses, but the company is encouraging parents to check any products they have at home and discard those that may be affected.

— Something to remember re: 2024 Senate races. In 2022, all but one Senate race went the same way as the outcome of the 2020 presidential race in the state. If that dynamic holds, Republicans would net three seats and have a 52–48 majority.

— President Biden is facing a lack of enthusiasm among young voters, who were key to his White House win in 2020, the WSJ reports (link). Interviews with students at colleges and universities, some of whom supported Biden in 2020, found many worried about his age and performance in office, the WSJ notes. While most voters had concerns about Donald Trump winning another term, some said they wanted to explore other options in the Democratic primary and might not show up on Election Day if Biden and Trump are on the ticket.

— Turkey’s president looks headed toward a runoff two weeks from now, as his reported lead narrowed to 49.39% compared with Kemal Kilicdaroglu’s 44.97%. The opposition said its parallel count showed Kilicdaroglu just ahead. The Turkish lira held close to record low levels of 19.6 per USD on Monday as investors digest the elections results. Turkey could head to a runoff vote on May 28 after both President Erdogan and opposition candidate Kemal Kilicdaroglu failed to achieve enough votes to win the first round.

— The Thai opposition won the country’s election and is set to wrest power from a military-backed coalition, but with Pita Limjaroenrat’s Move Forward set to be the largest party, not Thaksin Shinawatra-linked Pheu Thai. Party chief Pita Limjaroenrat won backing from the Pheu Thai party that finished second. The baht rallied.

— In India, Congress won its biggest major-state election victory over the BJP since 2014.

— House Republicans are likely to mark up several fiscal year (FY) 2024 spending bills in the Appropriations Committee on Wednesday and Thursday, including Military Construction-VA, Legislative Branch, Agriculture and Homeland Security. There is no deal on FY 2024 spending levels currently.

Senate appropriators are moving more slowly. Committee leaders want a bipartisan agreement on top-line spending levels, but they can’t finalize an agreement while debt-limit talks continue. It’s not clear whether they’ll have to move forward with funding bills before a debt-limit deal comes to fruition, said Sen. John Hoeven (R-N.D.), ranking member of the Agriculture-FDA Subcommittee. “We’ve talked about marking to a number where we just said, ‘OK, we’ll pick a number to move forward with the committee work, knowing that that will change once we get an agreement on debt ceiling and the budget,’” Hoeven said. “So the question is whether we’re going to have to do that or if they’re actually going to get some agreement soon. I think either way we’re going to try to work forward with the committee progress.”

— Clean Water Act hearing. A House Transportation and Infrastructure subcommittee will hold a hearing Tuesday on the future of the Clean Water Act, and what has already been accomplished under the law. The Senate Environment and Public Works Committee on Tuesday has scheduled a hearing on how the U.S. Army Corps of Engineers is able to respond to drought, conservation, and other water management issues.

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