- FarmPolicy - http://farmpolicy.com -

Budget Issues; and Farm Bill Issues

Budget Issues: Continuing Resolution- FY 2011- Political Background

David Rogers reported on Saturday at Politico that, “More a battering ram than a budget, a giant government-wide spending bill passed the House early Saturday morning, packing $60 billion in Republican spending cuts together with scores of legislative riders to impede President Barack Obama in carrying out his policies.

“Final passage came on a 235-189 vote shortly before dawn, capping an all-night session and marathon week during which literally hundreds of amendments were debated.”

Mr. Rogers explained that, “The open process — and largely civil tone — represent a victory for Speaker John Boehner (R-Ohio). But by moving so far right to appease his large freshman class, Boehner picked up no Democratic votes and sacrificed what many saw as his best shot of scoring a quick win in the Senate at the expense of Obama.

“Instead, Senate Democrats will be more united now and Majority Leader Harry Reid (D-Nev.) stronger after Saturday’s margins. And the real question becomes: can Reid, Boehner and Obama pick their way through the coming weeks without falling into a government shutdown?

“The $60 billion in reductions are concentrated in the last six months of this fiscal year and represent a 14 percent cut that will severely impact Obama’s agenda at home and abroad,” the Politico article said.

David Herszenhorn reported in Saturday’s New York Times that, “With just two weeks to go before the stopgap measure now financing the government expires, and Congress in recess next week, party leaders conceded that there was not enough time to forge a deal and that a short-term extension would be needed to avert a shutdown…[T]he House speaker, John A. Boehner of Ohio, has said that he would not agree to a short-term extension without added cuts in spending, which is now being held generally at 2010 levels. Democrats have not shown any willingness to give ground, apparently betting that Republicans will be held responsible for a shutdown, as they were in 1995.”

Paul Kane reported in Sunday’s Washington Post that, “The debate over the size and scope of the government now moves to the Senate, where leaders have already said that the House plan cuts way too deep and that they are planning a far more modest proposal. But with the Senate out of session all next week, senators have left themselves just a few days to take up a bill before March 4, when the stop-gap measure that is currently funding the government expires.”

The Post article noted that, “Some lawmakers are hopeful that [Sen. Minority Leader Mitch McConnell’s (R-KY)] renewed friendship with the White House, particularly his former Senate colleague, Vice President Biden, could pave the way for a deal similar to the one struck in December that led to large bipartisan votes for a tax-cut package. Last week, while backing his House GOP colleagues, McConnell signaled a desire for another round of private talks similar to those that he and Biden held in December that led to the tax deal.”

Kathleen Hennessey and Lisa Mascaro reported in Sunday’s Los Angeles Times that, “The two chairmen of the powerful House and Senate Appropriations committees, Rep. Harold Rogers (R-Ky.) and Sen. Daniel K. Inouye (D-Hawaii), have been in conversations as the process has evolved. The White House is also expected to play a role.

“‘Neither house of Congress is in a position to dictate terms to the other, so I remain hopeful that we will come to a sensible accommodation,’ Inouye said.”

Meanwhile, House Budget Committee Chairman Paul Ryan (R-WI) discussed these issues yesterday (MP3- 1:32) on the CBS News Program Face the Nation.

Budget Issues: Continuing Resolution- FY 2011- Agricultural Provisions

-Ethanol

David Shepardson reported on Saturday at The Detroit News Online that, “The U.S. House voted overwhelmingly to bar the Environmental Protection Agency from moving ahead with allowing a higher blend of ethanol in the nation’s gas tanks.

Just before 2 a.m. today [Sat.], the House voted 28[5]-13[6] to block the EPA from spending any money to carry out a waiver to allow E15 to be sold at the nation’s fueling stations. Currently, most gas stations sell E10 — which is 10 percent ethanol.”

The amendment was sponsored by Rep. John Sullivan (R-OK), who indicated in a statement on Saturday that, “Putting E15 into our general fuel supply could adversely impact up to 60% of cars on the road today– leading to consumer confusion at the pump and possible engine failure in the cars they drive…[M]y amendment put the brakes on E15 for the rest of the fiscal year, giving Congress time to address these questions and ensure consumer safety at the pump.”

(Note: Recall that EPA approved E15 for model year 2007 and newer cars and light trucks back in October; in November, Reuters news reported that, “Livestock producers and food industry groups filed a suit on [Nov. 9] seeking to overturn a U.S. decision to allow higher levels of ethanol in gasoline, saying it could push up food prices.” And in January, EPA okayed E15 for vehicles built from 2001 to 2006.)

Des Moines Register writer Philip Brasher pointed out that, “That House vote on ethanol is hardly the last word on the issue, because the broader legislation faces strong opposition from the Democratic-controlled Senate and the White House. But the bipartisan, 285-136 vote to stop the increased use of ethanol does demonstrate the challenges the industry faces in preserving its government incentives.”

Chris Clayton reported on Saturday at the DTN Ag Policy Blog that, “The House voted early Saturday morning to prevent spending any federal funds for the rest of the fiscal year on construction of blender pumps or an ethanol storage facility. The vote had 78 Democrats joining 183 Republicans to get 261 votes approving the amendment.

“Rep. Jeff Flake, R-Ariz., brought forward the amendment late Friday night as part of a marathon session of debates that had begun Friday morning.”

“Rep. Tom Latham, R-Iowa, spoke in opposition to Flake’s amendment, saying it limits consumer choice and is another attack on the nation’s progress to move toward energy security. Without the blender pumps, most Americans would continue with just E10, and continue to import more oil,” Mr. Clayton explained.

A news release from the Renewable Fuels Association indicated on Saturday that, “Last night, political science trumped physical science. The fact remains ethanol is a thoroughly tested, safe, and effective motor fuel. Americans spend nearly $1 billion a day importing oil, often from hostile regions of the world. If the chaos in the Middle East teaches us anything, it should be that America must forcefully begin down the path of energy self-reliance. Increasing the use of domestic renewable fuels like ethanol is the first, and arguably, the easiest step we can take.”

– Environmental Protection Agency (EPA- Regulations)

Ben Geman reported on Friday at The Hill’s Energy Blog that, “The House approved a GOP amendment to federal spending legislation Friday that would block fiscal year 2011 funding for EPA’s implementation of greenhouse gas regulations.

“The vote was 249-177.

“The amendment — sponsored by Texas Republicans Ted Poe, Joe Barton and John Carter — overlaps with a similar provision already in the underlying fiscal year 2011 spending plan.”

Darren Goode reported on Saturday at Politico that, “The debate over EPA’s climate regulations will not go away easily, however. Senate Democrats like Mary Landrieu will be pursuing language in the upcoming fiscal 2012 spending bill and elsewhere to block the agency’s greenhouse gas emissions plan.

“Sen. John Rockefeller (D-W.Va.) said Tuesday that he is planning to counter House Republicans’ efforts and offer his two-year delay as an alternative to the House spending bill language.

“Rockefeller has six Democratic co-sponsors for his bill, and has said he’s confident he can get the 60 votes needed to clear the Senate.”

Meanwhile, Chris Clayton reported on Saturday at the DTN Ag Policy Blog that, “Also early Saturday morning, the House voted 255-168 on an amendment by Rep. Kristi Noem, R-S.D., to prevent the EPA from regulating agricultural dust, a major thorn in the side of lawmakers from rural America.”

Mr. Clayton added that, “[T]he House also voted 230-195 to eliminate funding from EPA actions on the Chesapeake Bay watershed. Rep. Bob Goodlatte, R-Va., who offered the amendment, to eliminate said the EPA was placing arbitrary limits on nutrients and an expansion of authority under the Clean Water Act would devastate local economies. Goodlatte said individual states and communities are better suited to establish water goals than the EPA.”

Saturday’s DTN update added that, “Rep. Tom Rooney, R-Fla., also got a similar amendment passed to eliminate funding for EPA’s total maximum daily load of nutrient requirements in Florida as well. Those regulations actually do not go into effect until March 2012.

“Another amendment by Rep. Tom McClintock, D-Calif., blocks implementing funds for a Klamath Dam removal and sedimentation study as part of the TMDL for that river basin. Environmentalists and others want to remove dams along the Klamath River. That amendment passed 215-210 in a vote that caused a round boos in the chamber of the House by Democrats.

-Farm Subsidies

David Rogers reported on Friday at Politico that, “Rep. Ron Kind (D-Wis.) fared better but still lost after Republicans lined up more than 2-1 against his amendment to end the practice of the U.S. paying $147 million a year to Brazilian cotton interests to protect growers at home.

“The unusual arrangement grew out of a WTO ruling that the current U.S. cotton program is illegal, and until a new farm bill is written next year, the administration has agreed to the added payments so as to forestall much bigger retaliatory trade sanctions affecting a wider array of American industries.”

Friday’s article noted that, “Rep. Mike Conaway — from Texas cotton country and a member of both the RSC and the House Agriculture Committee — argued that what Kind proposed amounted to ‘a vote to institute a trade war with Brazil’ and would jeopardize intellectual property rights of American companies.

“‘What’s really ironic in this debate is that cotton prices are at an all-time high in the market place,’ Kind answered. ‘And there is still the built-up resistance in this institution to get to the hard work of reforming these farm subsidy programs.’”

And Chris Clayton reported on Saturday at DTN that, “The House of Representatives voted Friday night against an attempt to cap farm-program payments at $250,000 as part of the budget resolution to cut $61 billion out of federal spending this year.”

The DTN article stated that, “House Agriculture Committee Chairman Frank Lucas, R-Okla., said it was wrong to cut farm-program payments now. It should be done in the context of the 2012 farm bill.

“‘Why are we making policy decisions in an appropriations bill?’ Lucas asked. ‘This amendment changes current law. This is a decision that needs to be made in the context of the next new farm bill. We’ll consider the farm bill next year in an open and transparent manner…[B]ut I guess the opponents of farm programs will not be satisfied with that until every last marking tool has been eliminated. I know it’s a popular parlor game in some circles to see how far you can jerk farmers around, but making these changes mid-stream in a five-year farm bill is disruptive to market decisions producers have made in some cases years ago.”

Budget Issues: FY 2012 Budget

Jonathan Weisman reported in Saturday’s Wall Street Journal that, “Responding to public unease about the country’s fiscal standing, six senators including [Majority Whip Richard Durbin (D-IL)] are negotiating a deficit-reduction framework. They are betting that worries about federal red ink—expected to exceed $1.6 trillion this fiscal year—will put once-untouchable factors, such as entitlement spending and tax increases, into the mix.

“One proposal, built off the presidential debt commission’s recommendations, would establish caps on discretionary and entitlement spending. Lawmakers would then have to draft legislation to meet those caps or face automatic, across-the-board spending cuts if they fail.”

Senators Saxby Chambliss (R-GA) and Mark Warner (D-VA), two other members of the so called “Gang of Six” (along with Sen. Durbin, Budget Committee Chairman Kent Conrad (D-ND), Mike Crapo (R-ID), and Tom Coburn (R-OK)), appeared last week on the PBS NewsHour to discuss the attempts at a bipartisan deficit fix in more detail.

And in a short piece published in yesterday’s Washington Post, Senators Chambliss and Warner noted that, “The deficit commission’s report represents a courageous first step in tackling our national debt and reforming our tax code in ways that make our nation competitive for the 21st century. It would lower tax rates and simplify a system in need of an overhaul. It puts everything on the table, including entitlement spending and defense. The commission laid out a plan to strengthen and protect Social Security for the next 75 years, and that needs to be part of this discussion as well.

“Every day that we put off these difficult decisions, more than $4 billion is added to the national debt. While there are plenty of recommendations in the commission’s plan that we would not have chosen, one thing is clear to both of us: Our nation will be far better off with a comprehensive deficit reduction plan than without one.”

Farm Bill Issues

Elton Robinson reported last week at the Farm Press Blog that, “Mid-South agriculture received a huge setback in 2010 when Marion Berry, an Arkansas Democrat, retired after seven terms. His seat was won by Rep. Rick Crawford, who defeated Berry’s former chief of staff, Chad Causey…Replacing the influence and knowledge that Berry wielded in Congress won’t be easy, but Crawford, a Republican, appears every bit in agriculture’s corner as his predecessor.”

The update added that, “Crawford, an Army veteran, said [in a recent speech] that he will push for keeping the safety net intact for producers, including continuing direct payments.

“‘Direct payments to farmers are in the best interests of the country,’ Crawford said. ‘I will fight that fight for you, and I will not cave in on that fight. It’s a matter of national security. We don’t want to have to import food from countries that might not like us very much.’”

Larry Combest, the former GOP House Ag Comm Chairman from Texas, noted in an Op-Ed posted recently at Agri-Pulse, “Last Thursday, at least one senior House member suggested that this past week’s hearings on the state of the farm economy may have marked the beginning of the 2012 Farm Bill debate. I believe the whole week may have.

“The week was kicked off with the annual nonevent of the President’s budget submission to the Congress, which took a pass on addressing giant entitlements such as Social Security, Medicare, and Medicaid but did go after tiny farm policy, including direct payments, pay limits, and crop insurance despite the Secretary’s rightly observing to Mike Adams of AgriTalk that agriculture had already contributed to deficit reduction last year in the context of the Standard Reinsurance Agreement (SRA). While I expect that this year’s selective parsimony will serve to further alienate rural America more than balance any budget, the SRA cuts are real and the pain they cause will be felt all the way around.”

Mr. Combest added that, “House Agriculture Committee Chairman Frank Lucas, R-Okla., warned against setting long-term farm policy based on today’s rosy economic conditions, a sentiment Texas A&M Professor Joe Outlaw would echo in the Senate just a few hours later.”

Keith Good