Farmers have remained among the most stalwart of President Trump’s supporters. They helped him oust three red-state Senate Democrats in the midterms, defying November’s blue tide even as they bore the brunt of his trade war.
Now, with the government shutdown compounding farmers' pain, Trump on Monday made a special appeal to them to stick with him. The pitch — in an address to the American Farm Bureau Federation’s annual convention in New Orleans — reflects the president’s gamble that his base won’t waver as his confrontations with trading partners abroad and Democrats on Capitol Hill drag on.
Anecdotal evidence suggests he may be right. Sentiment in the crowd appeared to run in the president's favor. Among those in attendance:
— Steven McLeod, a livestock and small grain farmer from Kansas, tells my colleagues Annie Gowen and David Nakamura he’s “cautiously optimistic” Trump will conclude his trade offensive soon with a net win for farmers whose crops have been the target of retaliatory tariffs.
— Bob Schwenke, a Kentucky corn and soybean grower, struck a similar note, reasoning the short-term disruption of the trade war is worth it, because “a better trade deal will benefit the next generation to come.”
— Richard Musel, another corn and soybean farmer in the crowd, told the AP’s Jonathan Lemire that his business is “marginal” but he stands with Trump in the trade fight and blames Democrats for not funding the border wall.
— North Carolina farmers Lemuel and Shelby Ricks have endured a double whammy: They need relief from low commodity prices but can’t apply for Trump’s farm bailout because of the shutdown. They’re sticking with Trump anyway and plan to vote for him in 2020. “We’re not giving up on him now,” Shelby told Lemire.
In his speech, Trump leaned into his demand for border wall funding and an aggressive immigration crackdown. He also nodded toward the agriculture sector’s reliance on migrant labor by asserting he wants legal changes that “actually make it easier” to hire immigrants as temporary workers. And he said his administration is doing “everything in its power” to defray the effects of the shutdown on farmers.
But farmers are suffering now. The trade wars have crushed prices for their goods to the tune of billions of dollars. And the shutdown is pushing some to a breaking point, the New York Times’s Jack Healy and Tyler Pager reported last week. “Farmers and farm groups say that federal crop payments have stopped flowing,” they write. “Farmers cannot get federally backed operating loans to buy seed for their spring planting, or feed for their livestock. They cannot look up new government data about beef prices or soybean yields to make decisions about planting and selling their goods in an ever-changing global market.”
Trump signed an $876 billion farm bill into law last month that provides billions of dollars in aid to farmers. But shuttered Agriculture Department offices can’t implement programs included to protect farmers from price swings and other services.
The damage is a direct result of Trump policies. China and Europe designed levies they imposed on American exports in response to Trump’s tariffs to target farm states, a bid to hit the president in his base. It worked: For example, where China typically bought 60 percent of U.S. soybeans — grown by some 300,000 farmers —purchases have all but evaporated. And the shutdown is having a disproportionate impact in Trump territory. “Out of the 10 states with the most affected federal employees per 10,000, 6 voted for Trump,” an Axios analysis found.
Yet there’s little evidence so far that Republican senators in those states are feeling pressure from their voters to try to force an end to the shutdown.
“In general, rural and ag state voters have stuck with the president even when his policies caused them short-term pain,” Republican pollster Chris Wilson told The Post last week. “If the shutdown drags on, things will likely change if farmers and farm states start suffering lasting economic harm.”
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— Paralysis grips Washington. The Post's Bob Costa, Sean Sullivan and Erica Werner: "Trump’s dismissals of his own party’s calls for compromise and his seeming indifference to shuttered federal agencies left the snowbound capital paralyzed Monday, with lawmakers in both parties scrambling to jump-start talks but increasingly uncertain about Trump’s interest in ending the longest government shutdown in history...
"Trump’s unyielding stance and lack of an evident plan to broker an end to the 24-day impasse comes at a fragile moment for his presidency, following a weekend at the White House during which he lashed out at critics large and small on Twitter and faced deeper scrutiny of his relationship with Russian leaders."
Poll: Trump's losing. More from The Post: "A Quinnipiac University poll released Monday shows that 63 percent of American voters oppose shutting down the government to force funding for a border wall, with 56 percent saying Trump and Republicans are responsible for the shutdown, while 36 percent say Democrats are responsible. A majority of voters, the polling memo adds, remain opposed to a border wall."
TSA staff spread thin. Alison Sider at WSJ: “The partial government shutdown rippled through the U.S. transportation system Monday as staffing issues closed a security checkpoint at Houston’s largest airport and the world’s biggest hub in Atlanta suffered unusually long lines. The issues at several airports stem largely from a shortage of Transportation Security Administration staff, who have been calling in to say they wouldn’t be showing up for work in recent weeks and whose absences accelerated over the weekend.
“Houston’s George Bush Intercontinental Airport said it didn’t have enough TSA staff to work all checkpoints and said its Terminal B screening point would remain closed Monday after shutting down Sunday. Meanwhile Hartsfield-Jackson Atlanta International Airport, the world’s busiest airport by passenger traffic, reported delays of more than an hour at checkpoints early Monday... The TSA’s unplanned absence rate hovered at around 5% the week leading up to Friday, when the agency’s workers missed their first paycheck. On Monday, the rate was 7.6%, up from 3.2% on the same day a year ago.”
— Senate GOP struggles with Russian sanctions vote. CNN's Donna Borak, Ted Barrett and Jeremy Herb: "Senate Republican leaders are facing serious concerns from rank-and-file members about a Democratic bill that would reverse the Trump administration's plan to ease sanctions on three companies with ties to Russian oligarch Oleg Deripaska, a close Kremlin ally. A key vote on the measure, which Minority Leader Chuck Schumer can force under the 2017 Russia sanctions law, is expected at some point Tuesday, and will give Democrats another chance to blast Republicans over [Trump’s] relationship with Russian President Vladimir Putin…
"The growing concerns about potential Republican defections come amid a new wave of questions about Trump's relationship with Putin in the wake of a bombshell New York Times report that the FBI in 2017 decided to investigate why Trump took actions that seemed to benefit Russia."
— Stocks fall for just the third time in January. Bloomberg News's Randall Jensen and Reade Pickert: “U.S. stocks declined as weak Chinese trade data fueled concerns about slowing global growth. Treasuries were little changed and the dollar dropped. The S&P 500 fell for only the third time this month, led by technology companies after China’s slumping exports fueled worries about the growing impact of the U.S.-China trade war on worldwide growth... Citigroup said the trading environment was starting to improve, helping to boost the bank’s stock and other financial shares."
For investors, cash is king. CNBC's Liz Moyer: “Cash is becoming the king as investors flee volatile stock markets. Assets in money market mutual funds have swollen to $3.066 trillion, their highest level since March 2010, driven by retail investors. The money fund assets had spent much of the last decade in the $2 trillion range but tracked above $3 trillion again in mid-December, coinciding with a late-2018 market downturn that resulted in the S&P 500 posting a 6.2 percent drop for the year, its worst showing in a decade.”
Don't fear a recession, Morgan Stanley says. CNBC's Patti Domm: “Morgan Stanley equity strategists believe the stock market priced in an earnings recession when it plunged to December’s low, and it is very likely to retest that level. But the strategists, led by Mike Wilson, also say in a note that there is nothing to fear in a potential recession, and investors should 'embrace it.' As earnings revisions come down, the analysts expect the S&P 500 to fall back to the lows, and that would be a time to buy.
“To play these next moves, Wilson and the strategists warn investors that the S&P should hit resistance and they should lighten up if it gets to 2,600 to 2,650. But once the market responds to the worsening earnings picture and returns to recent lows in the 2,400 area, investors should jump back in and buy cyclical names."
— Yellen warns of a slowdown. Bloomberg's Anne Riley Moffat: “On paper, it still looks like a dynamite macroeconomic environment in the U.S. But outside the numbers, some cracks are starting to emerge, said Former Federal Reserve Chair Janet Yellen. 'All the hard data that we have on economic activity suggests that things are in good shape,' Yellen said during an onstage interview at the National Retail Federation’s annual trade show in New York City. But while 2018 was a good year, in 2019 'almost all economists are forecasting a slowdown,' she said. 'The global economy was firing on all cylinders in 2018 and now looks like we’ve got less strong and less synchronized global growth.’ Yellen... cited downside risk in Europe, global trade tensions and an apparent slowdown in China as key factors to watch in 2019."
More Yellen: Fed may be done hiking. "If there is a downturn in the global economy and that spills into the U.S. ... It's very possible we may have seen the last interest rate hike of this cycle," she said.
— May's Brexit deal faces certain defeat. Bloomberg's Thomas Penny and Robert Hutton: "Prime Minister Theresa May is set to see her Brexit deal rejected in the biggest Parliamentary defeat for a British government in 95 years after her last minute pleas for support appeared to fall on deaf ears. The battle now is over not whether May loses, but how badly… A defeat by more than 220 votes could see sterling fall to $1.225, according to Neil Jones, head of hedge-fund currency sales at Mizuho Bank. Meanwhile, a margin of less than 60 would leave some room for hope, several EU officials said last week, and the bloc may look at fresh ways of making the agreement more palatable to get it across the line."
— DOJ moves to restrict online gambling. The Post's Tom Hamburger, Matt Zapotosky and Josh Dawsey: "The Justice Department late Monday issued a legal opinion that could further restrict online gambling even as some states have been moving to embrace it — a restriction long sought by GOP megadonor Sheldon Adelson, who controls one of the world’s largest casino empires. The opinion from the Justice Department’s Office of Legal Counsel, which will probably be tested in the courts, reversed an Obama-era opinion that declared that the Wire Act applied only to sports gambling."
— China's trade slump means the pressure is on. Bloomberg News: “China’s exports slumped in December as a rush of orders to beat expected tariffs showed signs of fading and as domestic buyers succumbed to a worsening economic outlook. The worse than expected figures, with exports falling 4.4 percent in December from a year earlier, set a grim domestic backdrop for China’s negotiators as they seek a deal to end the stand-off with the Trump administration...
“At the same time, China’s overall trade surplus with the U.S. hit a record in 2018, underscoring the political imperative to cut a deal ahead of a March 1 deadline after which [Trump] has threatened to impose additional tariffs on Chinese goods. The numbers show how the world’s biggest trading nation is being hit by a confluence of slowing global growth and by uncertainty linked to the trade war factors that are expected to linger in the near term, at least.”
China ramps up economic support. WSJ: "Chinese officials said they would step up efforts to spur economic growth this year, as signs continue to show the country’s economic slowdown has deepened. Beijing intends to improve credit availability for smaller companies, accelerate infrastructure investment and cut taxes, said officials at a briefing Tuesday."
And asks state firms to avoid travel to the U.S. More from Bloomberg: "China asked some state-run enterprises to avoid business trips to the U.S. and its allies and to take extra precautions to protect their devices if they need to travel, according to people familiar with the request... They said the warning extended to the other countries in the Five Eyes intelligence-sharing pact: the U.K., Canada, Australia and New Zealand."
— Trump predicts a deal. Jeff Mason and Tim Ahmann at Reuters: “Trump on Monday predicted the United States would reach a deal with China to end a tit-for-tat trade war, saying Beijing wants to negotiate and that talks are going well. 'We’re doing very well with China,' Trump told reporters at the White House. 'I think that we are going to be able to do a deal with China. . . . China wants to negotiate.' . . . Trump has vowed to increase tariffs on $200 billion worth of Chinese imports on March 2 if China fails to address intellectual property theft, forced technology transfers and other non-tariff barriers.”
U.S. trade rep, affected by shutdown, will continue with negotiations. Bloomberg's Andrew Mayeda: “The U.S. Trade Representative’s office said trade negotiations will continue even as the agency implements a backup plan to deal with a lapse in funding amid a partial government shutdown. USTR is carrying out its contingency plan to respond to the lapse of funding appropriated from Congress, the agency said on Monday. 'Excepted personnel will ensure USTR continues to conduct operations, including trade negotiations and enforcement,' it said."
- "Trump denies working for Russia, calls past FBI leaders ‘known scoundrels.'" The Post's John Wagner and Karoun Demirjian.
- "Did Trump try to cover up the Trump Tower meeting coverup?" The Post's Philip Bump.
- "Attorney General nominee promises to allow Mueller to finish his work." NYT's Katie Benner.
— Ivanka to help lead World Bank prez search. WSJ's Josh Zumbrun and Alex Leary: "Ivanka Trump, [Trump’s] daughter and senior White House adviser, will help Treasury Secretary Steven Mnuchin and acting chief of staff Mick Mulvaney lead the process of selecting the next World Bank president. Ms. Trump isn’t a candidate for the position but will 'help manage the U.S. nomination process as she’s worked closely with the World Bank’s leadership for the past two years,' according a White House representative. The selection is shaping up as a test of the Trump administration’s international clout. The World Bank president has always been an American, but this outcome isn’t guaranteed. The abrupt resignation of the bank’s president Jim Yong Kim has created an opportunity for countries seeking a non-American to lead the World Bank."
AEI's Jim Pethokoukis asks the key question:
— PG&E faces collapse. WSJ's Russell Gold, Katherine Blunt and Rebecca Smith: “PG&E Corp. equipment started more than one fire a day in California on average in recent years as a historic drought turned the region into a tinderbox. The utility’s unsuccessful efforts to prevent such blazes have put it in a state of crisis. The fires included one on Oct. 8, 2017, when nearly 50-mile-an-hour winds snapped an alder tree in California’s Sonoma County wine country. The tree’s top hit a half-century-old PG&E power line and knocked it into a dry grass field, a state investigation found. The line set the grass ablaze, sparking what became known as the Nuns Fire.
“It was among at least 17 major wildfires that year that California investigators have tied to PG&E. Data from the state firefighting agency, Cal Fire, show the fires together scorched 193,743 acres in eight counties, destroyed 3,256 structures and killed 22 people. California’s largest utility, with a history of safety and maintenance problems, has been scrambling for five years to reduce fire risks. It has been overwhelmed by the threat’s severity and the challenge of shoring up thousands of miles of aging power lines and cutting and trimming millions of trees in a service area larger than Florida . . . Sunday evening, PG&E announced that Chief Executive Geisha Williams was stepping down and that John Simon, the company’s general counsel, would serve as interim CEO until a replacement is found. On Monday, the company said it plans to file for bankruptcy protection by the end of the month.”
— Notorious hedge fund takes aim at Gannett. NYT's Edmund Lee and Tiffany Hsu: “A New York hedge fund known for gutting newsrooms is backing a hostile takeover bid for Gannett, the publisher of USA Today and 100 other newspapers. The unsolicited offer, worth over $1.3 billion, would create the largest newspaper company in the United States and further consolidate a struggling industry. In an open letter to the Gannett board, MNG Enterprises, which is owned by the hedge fund Alden Global Capital, offered on Monday to pay $12 cash per Gannett share, a 23 percent premium on the company’s closing price on Friday. Gannett shares were trading about 19 percent higher around midday... Critics have described Alden as a 'destroyer of newspapers' that is prone to 'savage' layoffs and as 'one of the most ruthless of the corporate strip-miners seemingly intent on destroying local journalism.' "
— Supreme Court rejects CFPB challenge. Reuters's Lawrence Hurley: "The U.S. Supreme Court on Monday turned away a Texas bank’s constitutional challenge to the structure of the U.S. Consumer Financial Protection Bureau, passing up a case that could have led to more presidential power over an independent agency that [Trump’s] administration already has weakened. The decision by the justices not to hear an appeal by State National Bank of Big Spring may not be the final word on the matter as three other cases involving the CFPB are heading toward the high court.
- The Heritage Foundation hosts an event on "the constitution and economic freedom" on Tuesday in Washington.
- Brookings hosts an event on the "top priorities for Africa in 2019" on Thursday in Washington.
- The Center for Strategic and International Studies hosts an event on the Indian economy in 2019 in Washington on Thursday.
- The Wilson Center hosts an event on the "domestic and international impacts of kleptocracy" in Washington on Thursday.
- The Bipartisan Policy Center hosts "Energy Innovation: Fueling America’s Economic Engine" in Washington on Thursday.
- The Bipartisan Policy Center looks at "The Year Ahead for Capital Markets" on Jan. 22 in Washington.
- The Heritage Foundation hosts "Taxing Wars: The American Way of War Finance And the Decline of Democracy" in Washington on Jan. 28.
— From The New Yorker's Ivan Ehlers:
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