Policy Updates: Trumps Asks GOP Senators Who Should Lead Fed

Currency manipulation | Hold put on some USTR nominees | Ag Guestworker program | Trump battles some GOP senators | Disaster aid | ARC yield changes proposed | Markets



— Mexico open to currency manipulation provision NAFTA. Inclusion of a provision in NAFTA aimed at preventing currency manipulation is not objected to by Mexico, but Economy Minister Ildefonso Guajardo cautioned such a provision cannot impact monetary policy decisions. The next round of talks will take place in Mexico City in November, and Guajardo said Mexico needs to define its positions ahead of that session. "Mexico must set out all its proposals and respond to the ambitions of our trading partners on every issue," he noted. Should the talks not produce a successful outcome or President Donald Trump triggers the process of pulling out of NAFTA, Guajardo said farm products and petrochemicals would be most affected imports by Mexico, reiterating Mexico needed to make clear it would tap alternative markets for such products if needed.

— Wyden puts hold on some USTR nominees over NAFTA. Sen. Ron Wyden (D-Ore.) has put a hold on some nominees for positions at the Office of the US Trade Representative (USTR) as he said that folks are in the dark about NAFTA negotiations. "It's my intention to not support moving from the committee any additional trade nominees until federal law is complied with and the summaries are actually updated," Wyden said at a hearing on Kevin McAleenan to head the US Customs and Border Protection agency. The block would apply to two deputy positions at USTR — Dennis Shea to be US ambassador to the World Trade Organization and C.J. Mahoney to be deputy USTR for China, Africa and the Western Hemisphere.

The action, however, would not impact other trade nominees including McAleenan and those of Gregg Doud to be the USTR chief ag, Jason Kearns to be on the U.S. International Trade Commission and Jeffrey Gerrish to be a deputy USTR. Doud and Kearns were approved by voice votes by the panel Tuesday and Gerrish was approved on a 15-11 vote.

— House Judiciary ag guestworker markup continues today. The House Judiciary Committee today will hold a second day of markup on immigration legislation after a contentious session Tuesday was recessed after two hours of debate. The legislation, HR 4092 (115), authored by panel chair Bob Goodlatte (R-Va.) would revamp and expand the agricultural guest-worker program. Democrats took issue with several provisions in the measure, including a requirement that employers would have to pay workers coming in under an H-2C visa program at 115% of the federal minimum wage for most jobs and 150% for meat and poultry processing jobs. Democrats argued that provision would result in a sharp fall in wages for such workers compared to current levels. The bill would scrap the H-2A program and would exempt those workers from the Fair Labor Standards Act and would not require employers to provide transportation and housing. Some speculated the markup recess reflected a lack of Republican votes to move the measure forward. Even if it does leave the committee, its fate in the House and beyond is uncertain at best. A final bill is not expected to be sent to President Trump.

The committee adopted by voice vote an amendment by Rep. Mike Johnson (R-La.) requiring the Homeland Security and Agriculture departments to submit a study within three years after the bill becomes law to House and Senate Judiciary committees on H-2C workers’ compliance with provisions of the program. This includes the requirement that they return to their home country and whether some remain in the United States illegally after their visas end.

Goodlatte rejected criticism of the legislation, saying the new H-2C farmworker visa program will streamline the process for farmers, ranchers, food processors and other employers to hire foreign workers. It would also end requirements, he said, that create an “artificially inflated wage rate” and impose housing and transportation costs on employers. “A guest worker program should help farmers who are willing to pay a fair wage for law-abiding, dependable workers, not punish them,” Goodlatte said. The Virginia Republican, also a senior Agriculture Committee member, said he has heard complaints from farm groups about the H-2A visa program for a number of years.

— War of words erupts between Trump and some GOP senators. President Donald Trump is facing increasing criticism from his own side of the political aisle. GOP Sen. Jeff Flake of Arizona, who is not seeking re-election, launched a blistering attack on Trump, saying the president’s behavior was “dangerous to democracy.” The increasingly public split in the party is coming just when Trump and GOP congressional leaders are trying to get a tax-cut plan done by the end of the year.

Other GOP senators have verbal arguments with Trump include Senate Foreign Relations Chairman Bob Corker (Tenn.) and Senate Armed Services Chairman John McCain (Ariz.).

But President Trump enjoys public support from most of the 49 other Senate Republicans and 239 House Republicans, including every person in elected leadership. Trump supporters note the president got standing ovations from Senate Republicans, with Corker in the room, at this week’s meeting with the lawmakers. What some of those same lawmakers say privately about Trump is another matter.

— Second disaster aid bill clears Senate. A $36.5 billion disaster aid package is on its way to President Donald Trump's desk after senators overwhelmingly voted on Tuesday to clear the emergency bill. The final tally was 82-17 with only Robert Menendez ( D-N.J.) not voting. He was back home at his corruption and bribery trial. The bill is the second disaster aid package Congress has cleared since late August, when the first of three hurricanes began wreaking havoc throughout the Gulf Coast states, the U.S. Virgin Islands and Puerto Rico. When combined with the first supplemental spending bill, which appropriated $15.25 billion, the federal government will have approved $51.75 billion in emergency spending thus far to assist with hurricane and wildfire recovery.

Details. The bill (HR 2266) provides $18.67 billion for FEMA’s disaster relief fund, $16 billion in debt forgiveness for the National Flood Insurance Program, $1.27 billion in supplemental nutrition assistance funds for low-income Puerto Rico residents and $576.5 million for wildfire suppression.

The bill includes provisions intended to make it easier for farmers to reorganize their debts under bankruptcy law. The language, pushed by Sens. Chuck Grassley (R-Iowa) and Al Franken (D-Minn.) address a court ruling by clarifying that capital gains taxes owed on the sale of assets during bankruptcy should be treated as general unsecured claims. The legislation also blocks the IRS from vetoing a farmer’s reorganization plan.

The Office of Management and Budget is expected to submit a third disaster aid request to Congress in November, and could be followed by additional requests. Those aid packages may need to include different types of funding to satisfy lawmakers from Texas, Florida and Puerto Rico, who have asked for additional aid to assist with recovery.

— ARC yield changes proposed. A bipartisan Senate proposal intended to address complaints about payment disparities in the Agriculture Risk Coverage (ARC) program was introduced by Sens. Joni Ernst (R-Iowa) and Heidi Heitkamp (D-N.D.). The bill would not alter the formula for ARC revenue but it proposes several changes. One would base county yields on Risk Management Agency data. Another would allow Farm Service Agency state committees to adjust yield data when there are unusual variations.

— Markets. The Dow Jones industrial average ticked sharply higher Tuesday, closing up 167.8 points following positive quarterly results from several companies — it was the blue-chip index's best gain of October and the seventh gain in the past eight sessions.

The U.S. 10-year hit a 7-month high. The benchmark yield is up 3 basis points at 2.45%, its highest since March.

The U.K. economy grew by 0.4% in Q3, bringing the year-on-year growth rate to 1.5%, and potentially boosting the chances of a rate hike by the Bank of England.

Vice President Mike Pence cast a tie-breaking Senate vote late Tuesday to block new regulations allowing U.S. consumers to sue their banks, handing a big victory to Wall Street and other big financial institutions. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau (CFPB), the watchdog created by Congress in the aftermath of the financial crisis. CFPB Director Richard Cordray, a Democrat appointed by Obama, said 'Wall Street won and ordinary people lost.'"

— Other items of note:

  • No clear potential new leader after Xi. As China's Communist Party Congress wraps up in Beijing, President Xi Jinping broke with tradition by unveiling a new leadership lineup that included no clear potential heirs, raising the chances that he might seek to stay in office beyond 2022. A stronger Xi will now be able to push through bold economic and financial reforms as he also enshrined his name and doctrine into the party's constitution.
  • The House will vote tomorrow to back the Senate's budget resolution which is crucial to helping push the GOP's effort for tax reform later this year. The House Republicans aim to introduce a tax bill on Nov. 1.
  • Fed head. President Trump reportedly asked Republican senators on Tuesday for a show-of-hands on which candidate they prefer to lead the Federal Reserve. He reportedly asked the group if they prefer Fed Governor Jerome Powell or Stanford professor John Taylor, according to a Wall Street Journal account.
  • Nestle to leave GMA. Just months after a similar decision by Campbell Soup, Nestle is leaving the Grocery Manufacturers Association (GMA), a lobby group that represents hundreds of food companies in Washington. The move comes during as food manufacturers are facing new labeling requirements, like GMO ingredients and nutrition values, as some consumers shun conventional packaged food.
  • Hillary Clinton's campaign and the DNC helped pay for research leading to the infamous Russia dossier, which contains allegations of President Trump's ties to the country and possible interference by the Kremlin in the campaign, a source confirmed to NBC News.

 

 
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