Guest Columns

Industry Issues

Policy perspective: Major issues on the horizon

Michael Dykes

Michael Dykes is president and CEO of the International Dairy Foods Association. He contributes this column exclusively for Cheese Market News®.

Maybe it’s the pressure of the holidays, or the end of a year with battles over contentious issues like healthcare reform, but, regardless of the reason, Congress tends to get more active in the last quarter of the year, and 2017 will be no different. Debates on tax reform, the farm bill and trade negotiations are all accelerating as we approach the end of the year, not to mention a must-pass government funding bill to avoid a government shutdown.

After efforts to repeal and replace the Affordable Care Act have faltered, there is a lot of hope that tax reform will fare better. Meanwhile, there have been concerns the farm bill will be difficult to pass should the congressional budget require that more savings be squeezed out of its programs. On these counts, last week’s passage of a budget resolution for fiscal year 2018 by the Senate, and its anticipated passage in the House this week, makes success for both the tax package and farm bill more likely.

With the budget resolution creating a vehicle for tax reform through a legislative device called reconciliation, House Speaker Paul Ryan, R-Wis., is wasting no time getting the Republican tax plan to the House floor. Tax reform is what Republicans have been focused on from day 1, and it has been described by one member of House leadership as the “ultimate must-pass legislation for House Republicans.” Speaker Ryan plans to have the tax overhaul bill debated and passed by the House before leaving for Thanksgiving, sending it to the

Senate in time for that chamber to pass it before the end of the year.

Without getting into congressional budget minutia, I can tell you that the recently passed budget resolution allows the Republicans to pass their tax overhaul legislation with only 50 votes in the Senate (presuming the vice president breaks the tie). With only 52 Republican members in the Senate, the margin is slim for Senate Majority Leader Mitch McConnell, and I don’t think it’s hyperbole to say that everything is on the line for the Republicans as the 2018 election year is looming.

The final budget resolution did not include budget cuts for the House and Senate Agriculture Committees, making it a little easier for them to craft a farm bill. The House version of the budget resolution included a requirement for the Agriculture Committees to come up with $10 billion in savings. Given that the last farm bill saved tens of billions of dollars, finding further cuts would certainly have increased the degree of difficulty of passing a farm bill.

Farm bills are never easy as they require careful balancing among regional interests, as well as between the farm and nutrition programs. Right now, both the House and Senate Agriculture Committees are working hard to draft their own farm bills. Action in committee and perhaps even on the floor is a distinct possibility before year-end.

Hanging over all of this legislative activity are the North American Free Trade Agreement (NAFTA) modernization negotiations and the possibility that President Trump might withdraw from NAFTA and the U.S.-Korea Free Trade Agreement (KORUS FTA). Both the North American and South Korean markets are critical for the dairy industry. Mexico is our No. 1 market, accounting for more than $1 billion in U.S. dairy exports.

The fifth round of NAFTA modernization negotiations is going to start Nov. 17 in Mexico City, with talks between Canada, Mexico and the United States stretching into next year. It’s fair to say that the talks have been rocky so far, and President Trump has plainly stated that if a new deal can’t be reached, he’ll terminate NAFTA. Withdrawal from both NAFTA and KORUS has already been considered by the president this year, so IDFA is staying in close touch with those who care about dairy jobs in the administration and Congress.
With such weighty issues under consideration, one could almost be forgiven for forgetting that funding for the federal government expires on Dec. 8. Behind the scenes, members of the House and Senate Appropriations Committees are diligently working on an end-of-year package to fund the government for the remainder of fiscal year 2018. We are currently operating under what is called a “continuing resolution” that, in general, funds the federal government at current levels, but the tough decisions about which federal programs are going to be funded and at what levels still need to be made. The House will consider tax legislation before Thanksgiving, take a one-week recess and need to quickly turn its attention to this fiscal year 2018 appropriations bill, with the Senate following closely behind.

We know members of Congress and their staffs need to keep their energy and spirits up during this busy time, so we’re doing our part with a Celebration of Dairy Reception just steps from the Capitol planned for Dec. 6. Who knows? Maybe it’ll be some of our eggnog that fuels a productive end to 2017.


The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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