Trump left Biden a $30 billion fund used for trade wars. Biden has other plans for it.

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The Trump administration used it to bail out farmers suffering from its trade wars. Now the Biden administration wants to deploy a $30 billion pot of money in the Agriculture Department to tackle climate change, support restaurants and kickstart other programs without waiting for Congress.

© Susan Walsh/AP Photo USDA nominee Tom Vilsack’s intentions with the Commodity Credit Corp. are expected to be a line of questioning during his Senate confirmation hearing.

Long hidden in obscurity as a Depression-era financial institution, the Commodity Credit Corp. is shaping up as one of the first focal points for how the Biden administration is quickly revamping flexible programs left behind by former President Donald Trump.

Before the Trump era, the CCC was used in narrow ways to support farm income and prices, like helping cotton growers with ginning costs and purchasing cheese to boost dairy farmers. It’s also used to fund certain conservation programs, foreign market development, export credit and commodity purchases.

It became a signature tool in the last administration, which used it to dole out billions in aid to farmers suffering from Trump’s trade wars and tariffs. It was also dipped into to provide financial relief to farmers hit by the pandemic.

Trump’s Agriculture secretary, Sonny Perdue, “certainly took the training wheels off,” said Scott Faber, senior vice president of government affairs for the Environmental Working Group, a human health and environment nonprofit.

Perdue dusted off the little-known fund and leveraged its authority to help out producers financially hurt by retaliatory tariffs through a combination of direct payments and commodity purchases that eventually ballooned farmers’ bottom lines. The billions paid out to farmers far eclipsed the massive 2008 auto bailout, and accounted for 40 percent of farm income in 2020.

That aggressive approach could now give Biden’s USDA nominee, Tom Vilsack, wide leeway to pursue his own priorities.

Biden officials have their own ideas about how the money should be spent, setting up a tug of war over its limited resources. The trick will be convincing Congress that the USDA has the authority to use funds from the CCC to create a “carbon bank” to pay producers for using sustainable farming practices to capture carbon in soil.

“Secretary Sonny sure made a strong play for the CCC, and it certainly seems like Secretary Vilsack ought to have that kind of influence on how it’s spent,” an agriculture lobbyist told POLITICO who was granted anonymity in order to speak freely.

But Vilsack could run into some problems before the USDA can start writing checks. His intentions with the CCC are expected to be a line of questioning during his Senate confirmation hearing, which is scheduled for Tuesday. The fund, which borrows from the U.S. Treasury, must be replenished through the congressional appropriation process.

Vilsack already indicated in an interview with the Storm Lake Times that he believes he will have significant executive authority through the corporation and he will “create demonstration projects that can be incorporated as full programs into the next farm bill in two years.”

New purposes for the CCC may extend to many different needs. In his stimulus plan, Biden identified the fund as a potential source of economic relief for restaurants as many have shuttered or scaled back operations during the pandemic.

The Agriculture Department declined to comment.

Senate Agriculture Chairwoman Debbie Stabenow told reporters Thursday that she believes Vilsack, when confirmed, will have the leeway to use the funds to create a carbon bank, making congressional action to expand its charter unnecessary.

“We’re looking closely at that,” she said. “My initial look is that he does have the authority, but we will certainly be following that further. We will take a deep dive on that but my initial look is that the secretary would have the ability to do that.”

During the Trump administration, the Agriculture Department’s allocation of trade aid payments, which went largely to the nation’s biggest row-crop farming operations, ran into criticism from Democrats on Capitol Hill. But Congress never attached any terms to how the money was spent and continued to replenish the bank’s annual $30 billion borrowing limit.

“You could argue that Congress didn’t authorize anything related to MFP [Market Facilitation Program] so why would they speak out now?’” said Ferd Hoefer, founder of Farm, Food, Environment Policy Consulting. “That will work itself out politically.”

Yet additional trade payments may not be completely off the table. While some signs indicate that parts of the farm economy have rebounded from their slump in 2020, such as rising corn prices, unsettled trade relationships could throw net farm income for a loop. And there will be a continued need to use the CCC to help producers and other parts of the food supply chain weather the pandemic.

“I don’t think we have a full sense of what’s ahead of us,” said John Newton, the American Farm Bureau Federation’s chief economist.

Therefore, if the Biden administration moves forward with the carbon bank idea, agriculture lobbying groups are anticipated to push Congress to add more money to the fund.

Newton said that “serious consideration” should be given to expanding the fund’s borrowing capacity, potentially up to $60 billion. “Somewhere in that neighborhood would increase the ability to provide financial and technical support for increased adoption of climate smart practices,” he said.

“Figuring out a way to revisit their borrowing capacity will allow us to do some very creative things with the CCC,” Newton said.

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