You are here

Will Congress Close the Checkbook on Trump Tariff Payments?

A veritable footnote in the $4 trillion federal budget could become a top-line issue this week in the debate between lawmakers and the administration over government funding. House Democrats might refuse to provide money for the obscure USDA agency that has sent billions of dollars in cash to farmers and ranchers to mitigate the impact of the Sino-U.S. trade war.

The issue has simmered since June, when the White House said it wanted an earlier-than-usual replenishment of funding for the Commodity Credit Corp., nicknamed “USDA’s bank.” The Democrat-controlled House demurred then and may put off new CCC funding until late November or early December. In the interim, they are considering a short-term government funding bill that is free of all controversial riders. They could unveil the “clean” bill as early as today. The House calendar calls for debate and possible passage of the bill this week.

Democrats could be using the CCC as a bargaining chip against a government shutdown, or it could mark a moment when Congress exerts its power of the purse. A former USDA official questioned the optics: Do Democrats really want to shut down the Market Facilitation Program, as the trade-war payments are officially named, when they are trying to rebuild support in rural America?

House Republicans jumped on that interpretation. “Democrats are threatening to harm rural America in an attempt to damage @realDonaldTrump by preventing USDA from providing support to ag producers,” tweeted Texas Rep. Michael Conaway, former House Agriculture chairman. House Republican Leader Kevin McCarthy said, “Democrats are trying to squeeze American farmers … by blocking a program that helps them withstand China’s unfair trade policies.”

“The American people deserve a robust debate on the costs of the Trump trade war. The clean [funding bill] that House Democrats have circulated will keep the government open and provide time for Congress to have that debate,” a spokesman for House Appropriations chairwoman Nita Lowey told the Washington Post.

Agriculture is the only sector of the U.S. economy to receive a trade-war bailout and that’s because of the broad powers given to the CCC, created during the Depression to pay for New Deal farm subsidies. After revisions over the years, it can borrow up to $30 billion from the Treasury to support commodity prices and farm income. The Reagan administration tapped the CCC to finance an export subsidy program in the early 1980s. There has been uneasiness over the unprecedented scale of Trump’s trade-war spending; $10 billion for 2018 crops and livestock and promises of up to $16 billion for 2019 agricultural damage.

In the past, the White House budget office and strong-willed chairmen of the House and Senate appropriations committees held a firm grip on CCC spending. Jamie Whitten, House Appropriations chairman from 1979-93, specified in some appropriations bills how much the CCC could spend and on what projects, said a congressional staff worker. In 2010, Congress handcuffed USDA’s ability to use CCC money as emergency aid to growers. The restrictions grew out of Republicans’ view that a 2010 disaster package for Southern growers was intended to help re-elect Senate Agriculture chairwoman Blanche Lambert; she lost. Lawmakers removed the restrictions in 2018 as the request of Agriculture Secretary Sonny Perdue.

Although CCC funding might be left out of the short-term government funding bill, lawmakers would allow a replenishment in the normal process of funding USDA for the fiscal year ahead. The House passed in June a “minibus” bill funding eight federal departments, including USDA and the standard allocation of “such funds as necessary to reimburse the Commodity Credit Corp for net realized losses.”

The Senate Appropriations Committee is scheduled to vote this week on its USDA-FDA funding bill for the fiscal year beginning on Oct. 1.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
Read more about

Tip of the Day

Agronomy Tip: Continue Your Due Diligence

A man and a woman going over paperwork in the field. Make the right agronomic decisions for the best return on investment year-round.

Talk in Marketing

Most Recent Poll

What concerns do you have about using a farmland leasing/purchasing tool?