Coronavirus lingers with elections around the corner
Wednesday, July 29, 2020
Posted by: Aaron Stauffacher, assoc. dir. of govt. affairs
We are over halfway through 2020 and looking back, COVID-19 and the plethora of ensuing new acronyms, consumed the first half of the year. CARES, PPP, EIDL and CFAP are ones you are likely familiar with and probably forever engrained with. As we look forward, we will see elected officials shift toward election season and government funding. But in any case, do not expect these acronyms to go away anytime soon, as Congress works towards agreement on another comprehensive COVID-19 response bill.
The process on the next major response package started back in May when the House of Representatives passed the HEROES Act. The $3 trillion legislation moved along party lines in the democratically controlled House. The Republican controlled Senate declined to move legislation in their chamber, wanting to see how prior response bills performed first. If you recall, agriculture fared quite well in the HEROES Act for a total of $33 billion spread across farm and food chain assistance, as well as nutrition programs. The major headline for farmers is the $16.5 billion in additional direct financial assistance with several supportive programs to alleviate specific commodity issues. Specific dairy provisions included:
- Dairy direct donation program to prevent milk disposal and facilitate rapid donations of displaced dairy products directly to feeding programs.
- Supplemental Dairy Margin Coverage payments for the 2020-2023 calendar years by updating production history to 2019 actual production. Prohibition to reopen DMC.
- Incentive to sign up for Dairy Margin Coverage for 2021-2023 marketing years by providing a payment worth 15 percent of annual premium costs.
In August, the Senate is working toward passing its own legislation, but started with a proposal only a third of the size of the HEROES Act at $1 trillion. Senate, House and White House representatives will likely negotiate a deal somewhere in the middle before the Senate ultimately acts. Much like the House bill, the Senate proposal reaffirms support for the dairy and agriculture communities. But instead of including specific commodity provisions, the proposal largely turns ag coronavirus response over to USDA by allocating $20 billion more in funds to aid impacted farmers and processors. Whether or not to include more specific provisions will come down to the negotiating table. However, do expect the USDA will receive more funding to help farmers and processors to deal with the fallout due to the pandemic.
On top of the additional assistance for the ag community, there are several items dairy farms should be aware of. Most notably, the Senate bill proposes to create legal protections for employers that continued to operate as critical infrastructure during the pandemic if they took reasonable precautions to protect employees and others from virus exposure. Like previous measures, this proposal continues to modify the Paycheck Protection Program (PPP) for further use. Noteworthy changes allow for second PPP loans and establishes a specific loan calculation for farmers who operate as a sole proprietor or self-employed and file a Schedule F.
After the Senate passes this legislation, the House and Senate will hammer out any discrepancies between the two chambers’ bills before each chamber approves the negotiated final bill. With Congress wrapping up its negotiations, watch for updates from Edge in the weeks ahead.
Congress will wind down its activities towards the end of August to focus on election efforts. Even though Congress is set on passing another trillion-dollar spending package in response to coronavirus, they still must fund the government for the start of the next fiscal year on October 1. In July, the House pushed its set of appropriations bills through the chamber. Among the numerous bills, we were glad to recognize several provisions supportive of dairy farmers. Members of the House, many within Edge’s footprint, offered amendments to further fund the Dairy Business Innovation Initiatives, cover expenses for the FDA to crackdown and enforce dairy standards of identity, and recognize the labor challenges our dairy farmers face. However, we should not expect Congress will reach its October 1 deadline as the Senate has not even begun its appropriations process. Look for Congress to agree on a continuing resolution to keep funds at current levels, setting up a major money showdown in the future.
Speaking of showdowns, the upcoming November election will be one for the record books. Three months away and it is already hard to escape the media coverage. No doubt the attention is on the race for the White House. However, I would also suggest you keep an eye on what happens in the race for majority control of the U.S. Senate. The next few months will be memorable, but for now, don’t write anything off. There is a still a lot of time left between now and November 3.
Aside from watching the election races, it is important to engage the candidates. No doubt COVID-19 has shifted campaign strategies, but candidates and their teams will still be providing opportunities for you to weigh in. Some will host in-person forums while others will have virtual events.
I encourage you to participate when you can. It is critically important for you to hear from the candidates themselves and for the candidates to hear from you. The Edge team is here to assist you.