April 22, 2018

Climate Legislation; Crop Production; USAID Nomination; and Financial Reform

Climate Legislation

Jim Snyder reported yesterday at The Hill Online that, “Democratic supporters of climate legislation on Tuesday battled critics who argue cutting carbon emissions will hurt the economy and cost jobs.

“The setting was a Senate Finance Committee hearing on climate change and job creation that served as another reminder of how the debate over carbon has as much to do with the economy as with the environment, especially as unemployment levels rise.”

Mr. Snyder explained that, “Much of the focus on Tuesday centered on a study paid for by the American Council for Capital Formation (ACCF) and the National Association of Manufacturers (NAM), both critics of climate bills in Congress.

“It projected a significantly higher cost to the overall economy from climate legislation than have studies done by the Energy Information Administration (EIA), Environmental Protection Agency (EPA) and Congressional Budget Office (CBO).

Margo Thorning, an economist at ACCF, said climate legislation could cost between 1.7 million and 2.4 million jobs by 2030 as companies shift overseas to cut their energy costs. Households could have $1,200 less to spend annually.”

The Hill article added that, “Senate Finance Committee Chairman Max Baucus (D-Mont.), whose support is thought to be critical to the ultimate success of climate legislation in the Senate, referred to the ACCF/NAM study as an ‘outlier,’ noting other government studies suggested more modest costs.

EPA, for example, has said the costs to households could be as low as $80 a year.

Thorning defended her study and said others make overly optimistic assumptions about the availability of technologies, like carbon capture and sequestration at coal plants, that will reduce emissions.”

To listen to an exchange between Chairman Baucus and Dr. Thorning regarding some details of the study, just click on this audio link (MP3-5:31).

In addition, Senator Pat Roberts (R-Kansas) participated in yesterday’s Finance Committee meeting on climate change. In part, Sen. Roberts focused on the meaning of “green” jobs and the impact climate legislation could potentially have on Kansas specifically, as well as on Rural America in general, to listen to a portion of his discussion from yesterday’s hearing, just click on this audio link (MP3-2:49).

Sen. John Kerry (D-Mass.) followed Sen. Roberts in the discussion at yesterday’s Finance Committee hearing.

In his Hill article, Jim Snyder reported that, “Sen. John Kerry (D-Mass.), a Finance Committee member and lead author of the Senate climate bill, said the ACCF/NAM study was not credible.

He also noted that none of the studies weigh the costs that global warming may have on the economy, from lower crop yields to greater damage from more intense storms to higher insurance premiums.

“Kerry noted a new International Energy Agency estimate that notes for each year the world delays addressing climate change there will be an added $500 billion to the costs of reducing greenhouse gases.”

Reuters writers Richard Cowan and Timothy Gardner reported yesterday on the Senate Finance Committee hearing and added that, “Margo Thorning, chief economist at the American Council on Capital Formation, said job losses under the House of Representatives’ climate change bill may total 80,000 in 2020 and between nearly 1.8 million to more than 2.4 million in 2030.

“Senator John Kerry, the Democrat who is working with Republicans and fence-sitting members of his own party on a compromise climate bill, shot back at Thorning: ‘Your studies aren’t credible. You don’t take into account the cost of inaction.’”

To listen to an exchange between Sen. Kerry and Dr. Thorning, just click on this audio link (MP3-7:47).

Meanwhile, Bloomberg writer Simon Lomax reported yesterday that, “Iowa Senator Charles Grassley, who leads the Republicans on the finance committee, said under a carbon cap-and-trade program, ‘high energy prices will result in a net loss of jobs that otherwise would have been created or sustained.’

“Under the proposed legislation to limit greenhouse gas emissions, ‘there will inevitably be winners and losers’ and Senate Democrats should ‘stop trying to sell this policy as if it will have no cost for Americans and accept the basic economic principle that there’s no such thing as a free lunch.’”

John Stanton reported yesterday at Roll Call Online that, “Senate Finance ranking member Chuck Grassley (R-Iowa) warned Tuesday that Chairman Max Baucus’ (D-Mont.) pending climate change bill should realistically reflect the economic costs of reducing carbon emissions and not be centered on ‘purported environmental benefits.’

“Grassley’s remarks came during the opening of the Finance Committee’s first climate change hearing since the Environment and Public Works Committee passed its version of an ambitious climate change bill last week. The Finance Committee is expected to complete its bill in the next several months, and Majority Leader Harry Reid (D-Nev.) will eventually combine the two panels’ measures and several others into one package for consideration next year.

“‘This isn’t the Environment Committee so this isn’t the place for a detailed examination of the purported environmental benefits of any climate change proposal, although that is an important part of the equation,’ Grassley said. ‘This committee’s expertise is in the costs and economic impacts of new taxes. It therefore has the relevant expertise for evaluating the costs associated with climate change legislation.’”

Senator Grassley also appeared yesterday on the AgriTalk Radio program with Mike Adams. As part of yesterday’s discussion on the show, Mike Adams asked Sen. Grassely about climate issues and the Senator also took a call from a listener who expressed concern about his utility bill increasing if climate legislation became law.

As part of his response to the caller, Sen. Grassley indicated that, “This [climate change] is a religion with the people that are promoting it, so they don’t necessarily look at the facts…”

To listen to this portion of yesterday’s AgriTalk radio program, just click here (MP3-3:11).

Sen. Grassley also held a press briefing with agricultural reporters yesterday where the following exchange regarding agricultural offsets and climate legislation took place:

“QUESTION: Earlier this morning, Senator Harkin and five other senators introduced the Clean Energy Partnership Act, which basically, I think, would add the equivalent of the Peterson Amendment to the House climate change bill. It would add that to the Senate bill.

“And I wondered if you support that legislation. I know you have similar goals, but I wondered if you supported that bill.

“GRASSLEY: I think that every — if it — let me start over again. If it is as you just said — what Congressman Peterson did in the House — and they want to do it to the Senate bill, I would say yes. I would support that. But you’ve got to go way beyond that, I think, to give agriculture the credit that it ought to have.

“And I believe even Congressman Peterson would — would have in mind some things that — that he would have done beyond what got done in the House of Representatives. So I’m exploring other things that need to be done that would go beyond what Congressman Peterson did, because that would be a minimum.

And even — even after you do those things, don’t forget that most of the people that are looking at the impact of cap-and-trade on agriculture are seeing agriculture come out negatively.

“QUESTION: Can you elaborate just a little bit on what — what some of the things are that you’re exploring?

“GRASSLEY: Yes. Well, at least one I can give you right now, and that would be that we get more credit for what we’re doing for minimum tillage and no tillage.”

Also yesterday, Reuters writer Doug Palmer reported that, “The United States must include a tariff or some other ‘border measure’ to protect U.S. manufacturers from unfair foreign competition as part of legislation to address climate change, Senate Finance Committee Chairman Max Baucus said on Tuesday.

“‘We can not allow our manufacturing industries to fade as result of trade with countries that refuse to negotiate global solutions to global concerns,’ Baucus said in a speech.”

In other perspectives on Senate climate legislation, Nebraska GOP Senator Mike Johanns indicated earlier this week that, “The Environment and Public Works (EPW) Committee, which has the lead on the [Kerry-Boxer] bill in the Senate, approved its 1,000-page bill last week even though the Environmental Protection Agency (EPA) was not given enough time to conduct an analysis. It baffles me how the Committee could support this far-reaching legislation without knowing how it will impact the very people we serve and our economy as a whole.

The EPW bill has been fishy from the start. When it was first introduced, it included hundreds of blanks and draft text, which made any sort of real analysis impossible. They later filled in the blanks and sent it to EPA, the agency that will be primarily charged with implementing its provisions. EPA did not respond with an analysis because it was given too tight of a deadline. Instead, it offered a 30-page, self-described ‘paper’ with a ‘discussion’ about the potential impact of the legislation.”

Sen. Johanns added that, “I don’t mean to raise too much alarm-the bill was only passed out of one committee and has yet to come to the Senate floor. But how can the rest of the Senate be expected to make an informed decision on how they are going to vote when the EPW Committee itself did not have the benefit of complete analysis before they voted on the bill?”

Juliet Eilperin reported yesterday at the Capitol Briefing Blog (The Washington Post) that, “One of the key Republican senators involved in the global warming debate on Capitol Hill said Tuesday the Senate will have to ‘start from scratch’ in terms of crafting climate legislation.

“Sen. Richard Lugar (Ind.), the top Republican on the Foreign Relations Committee, met Tuesday with United Nations Secretary General Ban Ki-moon, along with the panel’s chairman, John Kerry (D-Mass.), and Sen. Joseph I. Lieberman (I-Conn.), who are working to forge a bipartisan compromise on climate legislation.

Lugar said he welcomed the opportunity to discuss global warming, but he emphasized that his constituents are more focused on the economy and did not see the bill authored by Kerry and Senate Environment and Public Works Committee Chairman Barbara Boxer (D-Calif.) as politically viable.”

With respect to the UN Secretary General’s visit to Washington, Reuters writers Richard Cowan and Timothy Gardner reported yesterday that, “U.S. Senator John Kerry said on Tuesday he will try to ‘outline’ a compromise climate control bill before December’s international global warming conference and U.N. Secretary-General Ban Ki-moon gave an upbeat assessment of Washington’s intentions.

“‘From what I heard today, there is great support in the Senate for action on climate change,’ Ban told reporters following a meeting with a small group of senators in the U.S. Capitol to encourage them on.”

Meanwhile, Justin Lofton reported at the Ada Evening News Online (Oklahoma) earlier this week that, “[Sen. Jim] Inhofe [R-Oklahoma] said he still intends to attend the 2009 Copenhagen Climate Conference.

“‘I’m always the spoiler at this thing. Last night I was on the Larry Kudlow show. He said, ‘Inhofe is the one-man truth squad going to Copenhagen.’ So when Barbara Boxer, John Kerry and all the left get up there and say, ‘Yes. We’re going to pass a global warming bill,’ I will be able to stand up and say, ‘No, it’s over. Get a life. You lost. I won,’’ Inhofe said.”

Crop Production

Scott Kilman reported in today’s Wall Street Journal that, “The slowest harvest season in decades across the Midwest and South forced the U.S. Agriculture Department to trim its huge production forecasts and raise its price outlook for everything from corn and rice to cotton.

“The USDA said in its monthly crop report Tuesday that it expects U.S. corn farmers to harvest 12.9 billion bushels, down 1% from its October forecast.

“While corn production would still be the second highest on record, and up 7% from last year, [related corn graph from yesterday’s Crop Production report] demand for corn to make things such as ethanol fuel is so strong that the department’s economists raised the price they expect U.S. farmers to receive on average to $3.55 a bushel, give or take 30 cents. That is up 6% from the one-month-old forecast.”

(Note: A complete summary of corn related estimates from yesterday’s monthly report is available here).

Mr. Kilman added that, “In the Mississippi Delta, where some areas received 400% of normal rainfall in October, the potential yield of cotton and rice fields is shrinking, too. The USDA Tuesday cut its one-month-old cotton production forecast by 3.8% to 12.5 million bales, each of which weighs 480 pounds [related cotton graph from yesterday’s Crop Production report]. Government forecasters shaved their one-month-old forecast of U.S. rice production by 1%.”

Today’s Journal article indicated that, “By Sunday, farmers in the major corn states had managed to harvest just 37% of that crop compared with 82% on average by that point over the past five years. This harvest is the slowest since at least the mid-1970s, when the federal government began tracking harvest progress.

“In addition to lower-than-expected yields, the rainy fall is stinging recession-weary farmers who now are spending more on propane to dry their crops than they had planned. The rain delay also means some farmers won’t be able to clear their fields of corn and soybeans in time to plant wheat this fall.”

With respect to soybeans, the AP reported today that, “The department pegged the soybean crop at a record 3.32 billion bushels, up 2 percent from the October forecast…” [related soybean graph from yesterday’s Crop Production report].

For a more in-depth analysis of yesterday’s crop reports, see this overview by University of Illinois Agricultural Economist Darrel Good- “Larger Soybean and Smaller Crop Forecasts.”

USAID Nomination

Mark Landler reported in today’s New York Times that, “After months of delays because of tangled vetting procedures, the Obama administration on Tuesday named a former executive with the Bill and Melinda Gates Foundation to run its main foreign aid arm, the United States Agency for International Development.

“The official, Rajiv J. Shah, a medical doctor and health economist now at the Agriculture Department, would take over an agency whose power and profile have eroded in recent years, but which is enmeshed in some of the administration’s toughest challenges, including Iraq, Afghanistan and Pakistan.

“Dr. Shah’s appointment, if confirmed by the Senate, would bring an end to 10 months of leadership drift at the agency that has deeply frustrated Secretary of State Hillary Rodham Clinton. Mrs. Clinton placed development at the heart of her diplomatic agenda, but she has struggled to find a candidate who could navigate the exhaustive confirmation process.”

Financial Reform

An update posted yesterday at stated that, “Breaking with both the House and the Obama administration, the chairman of the Senate Banking Committee unveiled a draft financial regulatory overhaul Tuesday that would consolidate federal regulatory authority over financial institutions.

“Christopher J. Dodd, D-Conn., circulated his draft to lawmakers, staff and financial industry representatives on Tuesday morning. It would consolidate banking regulation into a single agency — removing the regulatory power from the Federal Reserve, Office of Thrift Supervision (OTS), Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC).”

Binyamin Appelbaum and Brady Dennis reported in today’s Washington Post that, “The bill would effect an overhaul of government far exceeding the reforms proposed by the Obama administration this summer or those under consideration by the House. It would bulldoze the existing regulatory establishment, stripping power from agencies including the Federal Reserve and the Federal Deposit Insurance Corp., and erect in its place a triumvirate of new regulators with sweeping, unprecedented powers.

“Administration officials and House leaders have described some parts of the plan as untenable. Industry groups, Republicans and regulators have attacked much larger portions as unnecessary or irresponsible. Dodd said Tuesday that the bill is a draft, intended to start conversation, but that he believes the proposed reforms are necessary.”

In a joint statement released yesterday regarding the financial proposals, Agriculture Committee Chairman Blanche Lincoln (D-Arkansas) and Ranking Member Saxby Chambliss (D-Georgia) indicated that, “We commend Chairman Dodd and the Senate Banking Committee staff for putting together this draft legislation and taking an important step towards the much-needed reform of our financial system. The Senate Agriculture Committee will play a significant role in the effort to provide oversight and transparency to our nation’s financial regulatory system and will begin to take action next week with a hearing on this issue. We look forward to working closely with the Banking Committee as the Senate Agriculture Committee considers our portion of this legislation.”

Keith Good

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