House ‘minibus’ | Senate health-care vote? | FOMC | NAFTA hearing | Crop insurance | CFTC nominees
The House will depart for the summer recess once its weekly agenda is completed while the Senate will remain in session another two weeks. The FOMC has a two-day meeting ending Wednesday.
In the House, members will consider a $789 billion “minibus” (HR 3219), a combination of spending measures for Defense, Energy and Water Development, Military Construction-VA and the Legislative Branch. The bill includes controversial funding for Trump’s border wall, which Democrats have strongly opposed. Many amendments and late-night votes are expected on the House minibus. House Republican leaders voiced confidence they have the votes to pass the four-bill appropriations package before the August recess, although some conservatives say they are holding off on support as they attempt to influence a separate budget process.
WOTUS, biofuels language. The four-item appropriations bill, the Make America Secure Appropriations Act, includes language that would authorize the Corps of Engineers and the Environmental Protection Agency to bypass the notice-and-comment procedures required by the Administrative Procedure Act to withdraw the Waters of the U.S. (WOTUS) rule. The measure would also mostly abolish a joint project between the Department of Energy, USDA and the Navy to reduce the cost of military biofuels.
The House will also take up several veterans’ bills, including S 114 on funding for VA Choice program, a measure that has been mentioned as a possible future vehicle bill for debt limit legislation. HJRes 111 would overturn a Consumer Financial Protection Bureau rule to make it easier for consumers to sue banks.
Russia sanctions. The House may vote on a new Russia sanctions bill in response to cyber-hacking and Russian aggression in Ukraine. The Senate version of the bill (S 722) would restrict U.S. investment in energy projects that share Russian investment, and the House wants to ease those restrictions. Critics say the sanctions would hamper U.S. industry and stifle energy shipments to European countries.
Senate Republican leaders may vote on revised health-care legislation, but it is unclear what plan if any has enough votes to pass any measure. Vice President Mike Pence hosted a round table discussion last week with HHS Secretary Tom Price and conservative group leaders to discuss urging the Senate to vote for a procedural motion on the health care bill this week. “Congress needs to do their job. Every member of the U.S. Congress needs to vote to begin the debate to repeal Obamacare,” Pence said.
Sen. Susan Collins (R-Maine) voiced her frustration about the Senate approach on Face the Nation yesterday. “We don’t whether we’re going to be voting on the House bill, the first version of the Senate bill, the second version of the Senate bill, a new version of the Senate bill, or a 2015 bill that would have repealed the Affordable Care Act now, and then said that somehow we will figure out a replacement over the next two years,” she said. “I don’t think that’s a good approach to facing the legislation that affects millions of people and one-sixth of our economy.”
A failed vote this week won’t be the end of the repeal debate, Sen. John Thune (R-S.D.) said on Fox News Sunday: “We are going to vote to repeal and replace Obamacare ... it’s not a question of if, it’s a question of when.”
Nominations. The Senate is expected to vote as early as Monday on the nomination of David Bernhardt to be deputy secretary of the Interior Department. The Energy and Natural Resources Committee voted 14-9 in June to advance Bernhardt’s nomination.
Former directors of the Congressional Budget Office (CBO) recently sent a letter to congressional leaders expressing their “strong objection to recent attacks on the integrity and professionalism of the agency.” Link to letter. “We write to express our strong objection to recent attacks on the integrity and professionalism of the agency and on the agency’s role in the legislative process,” the former CBO directors wrote. The agency’s economic estimates have proven to be “more accurate, on average, than estimates or guesses by people who are not objective and not as well informed as CBO’s analysts,” they wrote. Republicans have expressed frustration with the CBO for projecting relatively anemic economic growth in the coming decade as they try to devise a path to a balanced budget. The Trump administration is projecting a growth rate that is about 50% higher — a rate that would generate an additional $2 trillion in revenue over 10 years.
In agriculture-related hearings, the Senate Ag panel on Tuesday will hold a hearing on “Commodities, Credit and Crop Insurance: Perspectives on Risk Management Tools and Trends for the 2018 Farm Bill”. On Wednesday, the House Ag Committee holds a hearing on renegotiating NAFTA and opportunities for agriculture. On Thursday, the Senate Ag Committee will hear from three CFTC nominees — two Republicans, former Agriculture Committee aide Dawn DeBerry Stump and Brian Quintenz, who previously was a House GOP adviser; and one Democrat, Russ Behnam, an adviser to Sen. Debbie Stabenow (D-Mich.).
In energy-related hearings, the House Science Joint Subcommittee on Environment and Subcommittee on Energy hold a hearing Tuesday examining advancements in biofuels. On Wednesday, the House Committee on Energy and Commerce Subcommittee on Energy reviews the operation of U.S. wholesale electricity markets. The House Natural Resources Committee’s Energy and Mineral Resources Subcommittee will hold a Thursday hearing on three bills, including a measure (HR 1778) aiming to ensure that no future coal moratorium on federal lands can take effect without a joint resolution of approval from Congress and another bill (HR 3117) that would bar the executive branch from considering the social cost of carbon, which seeks to add up in monetary terms the quantifiable costs and benefits of emitting carbon dioxide.
Water rights. The Senate Energy and Natural Resources’ Public Lands, Forests and Mining Subcommittee will hold a Wednesday hearing on 16 bills, including one that would change the way federal agencies can negotiate with businesses that operate on federal lands. The bill, S 1230, would disallow agencies from forcing these businesses to give up their water rights as a condition of their granting a permit. The House Natural Resources Committee approved a similar bill last month.
Other hearings on tap include sessions on states regulating beyond their borders, advanced biofuels, a balanced budget and international financial reform.
On the Federal Reserve front, the Federal Reserve Open Market Committee (FOMC) holds a two-day meeting (Tuesday and Wednesday). No interest-rate policy change is expected.
With no FOMC press conference, the post-meeting statement will be the only source of information for traders and others to assess. The statement will be watched for any timing mention relative to the Fed starting to scale back its massive balance sheet. Most expect that will happen in September, but a move next week or announcement of when that action will happen would be of note. Market expectations for another interest-rate move before the end of this year have fallen below 50% following disappointing U.S. economic data. The Fed said in its last post-meeting statement that it was “monitoring inflation developments closely” as it continues to undershoot the central bank’s 2% target.
With the Fed blackout period ending, at least one Fed speaker is on tap — Minneapolis Fed’s Kashkari (2017 voter).
On Thursday, the Senate Banking panel holds a session on the nominations of Randal Quarles to be a member of the Federal Reserve Board of Governors and Joseph Otting to be Comptroller of the Currency.
Trade policy issues include the U.S. and U.K. beginning post-Brexit trade talks, with British negotiators traveling to Washington. Liam Fox, the United Kingdom’s secretary of state for international trade, has a busy schedule which includes a speech at the American Enterprise Institute this morning; meetings with Commerce Secretary Wilbur Ross, House Ways and Means Committee Chairman Kevin Brady (R-Texas) and other members of Congress; and dinner with U.K. and U.S. business representatives. He will host a breakfast with members of Congress on Tuesday to highlight a new report showing the strong ties between the U.K. and each of the 435 U.S. congressional districts.
Energy supply. The U.S. Energy Association — a group of public and private energy-related organizations, corporations, and government agencies — will hold its 10th annual Energy Supply Forum on Thursday. Scheduled speakers include Rep. Joe Barton (R-Texas) and Vincent DeVito, the counselor for energy policy to Interior Secretary Ryan Zinke.
At the White House, on Tuesday, President Trump hosts Lebanese Prime Minister Saad Hariri.
Several important economic updates are ahead, including several data releases on housing and the initial reading on second quarter GDP, which comes Friday. The first reading on the second quarter GDP is expected to show more economic growth from the tepid first quarter, but still will not likely be enough to shift our expectations for the 2017 GDP outlook very much.
On the agriculture report front, the Wheat Quality Council’s U.S. spring wheat tour begins Monday in Fargo, North Dakota, with final yield estimates expected on Thursday. The International Grains Council’s monthly market outlook is due Thursday, along with EU’s Monitoring Agricultural Resources bulletin on crop conditions. On Tuesday, USDA releases its update on food prices.
