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Congress returns | FY 2015 appropriations | Tax incentive extenders | Employment report | FOMC | State of livestock sector
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Congress returns from a two-week spring break, with a Friday Employment report, continued work on FY 2015 appropriations work, a House panel markup of tax incentives and a House subcommittee hearing on the state of the livestock industry being the highlights of this week in Washington.
In the House, Republican leaders are planning for the Fiscal year 2015 appropriations process, with the first of the 12 bills expected to move to the floor soon while others are marked up in committee throughout May. The goal is to have all 12 of the measures passed on the floor by the time lawmakers leave for the August recess. In the House, for example, there are 43 working days scheduled between late April and the end of July.
On the appropriations front, House Majority Leader Eric Cantor (R-Va.) wants to bring the first two bills reported by the House Appropriations Committee to the floor in May – the usually bipartisan Military Construction-VA (HR 4486) and Legislative Branch (HR 4487). Committee Chairman Hal Rogers (R-Ky.) said his panel will begin marking up the other 10 soon, with a goal to have them all reported by the Memorial Day break.
House appropriators are slated to mark up the Fiscal 2015 Commerce-Justice-Science spending bill in subcommittee Wednesday. The draft bill text will be released Tuesday. The C-J-S spending bill, a catchall measure that funds NASA, the Justice Department, the Commerce Department and many federal research agencies, received $51.6 billion in Fiscal 2014. Its allocation has yet to be set for FY 2015.
Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) said her panel will start marking up its versions of the bills before Memorial Day. Senate Majority Leader Harry Reid (D-Nev.) said he has committed to give Mikulski floor time for the bills in both June and July.
On the transportation front, the solvency of the Highway Trust Fund (HTF) is also on Congress's radar to ensure continued funding for transportation construction projects prior to the August break. The coming insolvency of the HTF will require both chambers to find new revenues to fill the gap and keep money flowing for road and transit projects. As a starting point, the fund is said to require at least $8 billion just to cover the fund through December and make up for inadequate gas tax revenues. The Obama administration is expected to unveil some of its ideas, likely from Obama's budget proposal, for a four-year bill that spends heavily on transit, brings rail into the same trust fund and doubles TIGER infrastructure grants. But lawmakers prefer a bill that extends current road and transit programs at current spending levels plus inflation.
Regarding water resources, lawmakers involved in the reauthorization of the nation's surface transportation programs are also mulling the revenue issue. Shortly before the break, the leaders of the Senate Environment and Public Works Committee said they have an agreement on the broad outline of the reauthorization bill they plan to take up in May. While it deals with all policy matters covered by the legislation, the measure does not address the funding issue. That task, they said, will be left to the House and Senate tax-writing committees.
On Tuesday, a House Transportation and Infrastructure panel reviews recently approved "chief’s reports" from the Corps of Engineers on proposed construction projects. That could be an important procedural step toward finalizing a water projects bill because every navigation or flood control project that would be authorized by the pending Water Resources Development Act (WRDA) must first be cleared through all corps reviews, then get a chief of engineers signature on the final approval report. Conferees have tried to finalize a list of projects the bill would approve — including inland river lock construction, seaport dredging and mountain-area flood control work. Since the House passed its version of the water bill last fall, authorizing only projects with chief’s reports at the time of the Transportation and Infrastructure Committee markup, senators have wanted to add others and the corps has continued to finalize approvals. The last one to get a signed chief’s report earlier this month was the proposed Truckee River flood project for the Reno-Sparks area of Nevada, which has long been backed by Senate Majority Leader Harry Reid.
Action on some lapsed tax incentives will take place in both chambers. Senate leaders may bring up a package of tax extenders approved in the Senate Finance panel but the exact timeline is murky. The House Ways and Means Committee on Tuesday will markup a package of incentives to be permanently extended. The House panel markup on will focus on six bills that Republican members of the committee have introduced in recent weeks, following Chairman Dave Camp's (R-Mich.) request that lawmakers submit legislation for extenders they would like to see made permanent. The research credit, commonly known as the research and development credit, is the focus of a bill (HR 4438) by Rep. Kevin Brady (R-Texas). Camp has already proposed, through a tax overhaul draft released Feb. 26, to modify the credit and make it permanent. Among other potential items for the Ways and Means markup are several elements of the corporate tax code, including Section 179 expensing, look-through treatment of controlled foreign corporations and built-in gains of S corporations. Those are expired provisions that Camp proposed in his tax draft to make permanent in a broad overhaul.
Cantor told Republicans in a memo April 25 that the House will take up the R&D credit in May. "This will put American companies, especially American manufacturers, on par with their international competitors whom already have permanent R&D incentives," Cantor wrote, adding that similar tax bills will come to the floor in the coming months.
The House will also consider Senate-passed legislation (S 994) that would require the government to standardize its data. The measure, passed in the Senate by unanimous consent on April 10, also would compel the government to publish data in formats easily accessible to the public.
House Republicans are under pressure to take up a Senate-passed bill (HR 3979) to extend unemployment insurance benefits, but Speaker John Boehner (R-Ohio) has said the costs of such an extension would need to be paid for elsewhere in the budget and it would need to be accompanied by measures to boost the economy.
On the food stamp funding front, Boehner has said he expects the House to act to stop states from easing their eligibility requirements for energy assistance to make it easier for people to qualify for food aid, saying such moves amount to cheating on the December budget agreement. But the legislation will not advance in the Senate.
A House panel on April 30 will vote on a bill to expedite natural gas exports. The House Energy and Commerce Committee will vote on a bill (HR 6) that would automatically approve licenses to export natural gas to the 159 countries in the World Trade Organization. The bill, introduced by Rep. Cory Gardner (R-Colo.) also would immediately approve the 24 LNG export license applications pending at the Energy Department. The Subcommittee on Energy and Power approved the legislation on a 15-11 party-line vote earlier in April, and the bill is considered a priority of House Republican leaders who have called for the Energy Department to expedite the export approval process citing geopolitical turmoil in Ukraine. Under the Natural Gas Act, the Energy Department is required to grant an application to export natural gas to a country without a free trade agreement with the US unless it finds that the proposed export is inconsistent with the public interest. The Energy Department has conditionally approved six natural gas export applications that would total over 9 billion cubic feet a day of natural gas if all of the projects were completed, though industry analysts have said it is doubtful all of the export facilities that applied will be built.
A House Ag subcommittee on April 30 will review the state of the livestock industry, with a focus on livestock losses, including the PEDv situation in the US hog industry.
In the Senate, leaders want to offer legislation they developed with the White House to appeal to middle-class voters, including bills to extend UI benefits, reauthorize child care programs, and address pay equity. Reid said they are now preparing to move on to other key pieces of the strategy, beginning with legislation (S 1737) to increase the hourly minimum wage from $7.25 to $10.10 in stages. Ahead, Democrats also plan to offer other bills to make college more affordable by consolidating and lowering interest rates for student borrowers; protect Medicare from attempts to "end the Medicare guarantee" or raise the eligibility age for benefits; and close tax loopholes for companies located offshore.
On the Senate energy agenda, Reid said during a recent conference call with reporters that he plans to bring a bipartisan energy efficiency bill (S 2074) to the floor soon, which is similar to legislation pulled from the floor last September before the government shutdown. It would update model building codes and provide incentives for energy savings and authorize funds to increase conservation by federal agencies. Also expected to move to the floor in the next several weeks is a bipartisan measure (S 1468) recently reported from committee to develop a national manufacturing strategy and establish a network of centers for manufacturing innovation.
Energy legislation (S 2083) by Sen. Mark Udall (D-Colo.) would expedite approvals for WTO countries. The bill is expected to be the subject of a hearing held by Senate Energy and Natural Resources Committee Chairman Mary Landrieu (D-La.), who is a proponent of increasing LNG exports.
Nominations will also get the Senate's attention, including Sylvia Mathews Burwell to serve as secretary of Health and Human Services. Her nomination will be yet another debate over the merits of the Affordable Care Act.
Several economic issues come into focus this week, including the jobs picture and next two-day session of the Federal Open Market Committee (FOMC). The Wednesday gathering comes just days before the key Employment data arrives and so far, there’s no indication that the Fed is going to vary from their current path of keeping interest rates unchanged and continuing to reduce the stimulus effort. The economic data front includes the Pending Home Sales Index and Dallas Fed manufacturing update on Monday, with the S&P Case-Shiller Home Price Index and Consumer Confidence readings on Tuesday. Wednesday not only brings the FOMC meeting conclusion, but also the ADP private-sector jobs report, GDP, the Employment Cost Index and Chicago PMI readings. Thursday’s data flow is also packed with weekly jobless claims, Personal Income & Outlays, PMI and ISM manufacturing updates and Construction Spending. The key day, however, is Friday with the April Employment report along with Factory Orders. The jobs data and FOMC sessions will temper market action leading up to those events. In a somewhat surprising development, Fed Chair Janet Yellen is scheduled to make remarks on Thursday, though her comments may shy away from the FOMC situation as the blackout period won’t quite be lifted. Otherwise, the Ukraine/Russia situation remains a potential market mover along with economic data out of Europe or China.
For agriculture, the data for the week includes Monday’s Crop Progress report, monthly Ag Prices on Wednesday and the Weekly Export Sales update on Thursday. The latter remains of importance to the market as they gauge demand from China and other key buyers, especially after record weekly corn exports for the week ended April 17. The end of April arrives on Wednesday and that could affect trading activity. Beyond that, weather is rising in terms of market focus and this will test market views on planting the 2014 corn crop in particular as hefty rainfall is in the outlook through the end of the month. With minimal planting progress on corn and soybeans already, that could heighten market worries. Plus, the Plains HRW wheat weather situation remains one wheat traders will keep tabs on as they will get reports from the HRW Wheat Tour this week as well.
Monday, April 28
Congress returns from a two-week spring break.
President Barack Obama visits the Philippines through Tuesday.
ECB President Mario Draghi speaks at the joint conference of Germany's coalition government parties in Bonn.
Former Federal Reserve chair Alan Greenspan speaks before the Economic Club of New York.
Waters of the US. House field hearing. Federal Regulation of Waters: Impacts of Administration Overreach on Local Economies and Job Creation. Committee on Transportation and Infrastructure. In Altoona, Pa.
Economic reports: | Dallas Fed Mfg Survey | Selected Interest Rates (Federal Reserve) | Pending Home Sales Index | Dallas Fed Mfg Survey
USDA reports: Export inspections (AMS) | Crop Progress (NASS) | Milk Cost of Production (ERS)
Tuesday, April 29
Japanese markets closed for Showa day.
Federal Open Market Committee's two-day meeting on interest rates starts.
The Worldwatch Institute holds a symposium and launch of a new report "The State of the World 2014: Governing for Sustainability."
SEC. House hearing. Oversight of the SEC's Agenda, Operations, and FY 2015 Budget Request. Committee on Financial Services.
Transportation. House hearing. A Review of Recent United States Army Corps of Engineers Chief’s Reports and Post Authorization Change Reports. Subcommittee on Water Resources and Environment (Committee on Transportation and Infrastructure).
Pollinators. House hearing. To review current research and application of management strategies to control pests and diseases of pollinators. Subcommittee on Horticulture, Research, Biotechnology, and Foreign Agriculture (Committee on Agriculture).
Energy. House hearing: Oversight hearing on "American Energy Jobs: Opportunities for Skilled Trades Workers." Committee on Natural Resources.
Tax incentives. House markup. Ways and Means panel to markup permanent extension of lapsed tax incentives.
Economic reports: ICSC-Goldman Store Sales | S&P Case-Shiller HPI | Consumer Confidence
USDA reports: Dairy Products – Ann. (NASS) | Livestock & Meat Domestic Data (ERS)
Wednesday, April 30
Korean markets closed for Labor Day.
FOMC makes its policy announcement; no news conference afterwards. Most expect the market to concentrate on any changes to forward guidance.
Bank of Japan meets on monetary policy.
State of livestock industry. House hearing. Subcommittee on Livestock, Rural Development, and Credit (House Committee on Agriculture).
Energy. House hearing. "Examining the Effects of Liquefied Natural Gas Exports on US Foreign Policy." Subcommittee on Energy Policy, Health Care, and Entitlements (Committee on Oversight and Government Reform).
War on Poverty. House hearing. A Progress Report on the War on Poverty: Lessons from the Frontlines. Committee on the Budget.
FY 2015 budget – Forest Service. Senate hearing. Interior, Environment, and Related Agencies Subcommittee (Appropriations Committee). Witnesses: US Forest Service Chief Tom Tidwell; and US Forest Service Budget Director Tony Dixon.
Regulations. Senate hearing. To examine the first step to cutting red tape, focusing on a better analysis. Joint Economic Committee.
Energy reports: Weekly Petroleum Status Report (EIA) | Weekly ethanol plant production (EIA).
Economic reports: Weekly Mortgage Rates (Freddie Mac) | ICI weekly money market mutual fund data Weekly mortgage applications (Labor Dept.) | ADP Employment Report | GDP | Employment Cost Index | Chicago PMI | FOMC meeting announcement | Chicago Purchasing Managers Report | MBA Purchase Applications
USDA reports: Broiler Hatchery (NASS) | National Dairy Products Sales Report (AMS) | Announcement of Class and Component Prices (AMS) | Agricultural Prices (NASS) | Peanut Stocks and Processing (NASS) | Egg Products (NASS)
Thursday, May 1
Markets including China, Russia, Brazil, Germany, and India are closed for Labor Day or May Day.
Federal Reserve Chairwoman Janet Yellen speaks to Independent Community Bankers of America, in Washington.
Economy. House hearing. "Legislative Proposals to Enhance Capital Formation for Small and Emerging Growth Companies, Part II". Subcommittee on Capital Markets and Government Sponsored Enterprises (Committee on Financial Services).
Propane shortages. Senate hearing. To examine shortages on gas, focusing on a look into propane shortages this winter. Energy and Natural Resources.
Obama trade agenda. Senate hearing. To examine the President's 2014 Trade Policy Agenda. Finance Committee. Witness: US Trade Representative Michael Froman.
Rural economic development. Senate hearing. Subcommittee on Jobs, Rural Economic Growth and Energy Innovation (Senate Agriculture).
Transportation: Weekly Traffic of Major Railroads (Assn. Of American Railroads) | Grain Transportation Report (AMS).
Energy reports: Weekly US underground natural gas stocks (EIA)
Economic reports: Jobless Claims (Labor Dept.) | Personal Income & Outlays
USDA reports: Export Sales (FAS) | Dairy Products (NASS) | Commodity Costs and Returns (ERS)
NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.