Farm Bill Issues
DTN Political Correspondent Jerry Hagstrom reported yesterday that, “House Agriculture Committee ranking member Collin Peterson on Wednesday endorsed the Gang of Six senators’ budget proposal and said he has instructed his staff to begin researching a farm bill with the $11 billion in cuts that the proposal would involve.
“‘I think this is coming together,’ Peterson, a Minnesota Democrat, told DTN. ‘I told my staff to start looking at this yesterday.’
“One key farm lobbyist said farmers would be ‘dancing cartwheels’ if the cuts in farm programs can be held to $11 billion over 10 years. House Budget Committee Chairman Paul Ryan, R-Wis., proposed a $48 billion cut over 10 years in the fiscal year 2012 budget bill that the House passed. Senate Agriculture Chairman Debbie Stabenow, D-Mich., has said that passage of the Ryan budget proposal has made it increasingly difficult to keep the discussion of ag cuts at the $10 billion proposed under the Simpson-Bowles presidential commission plan.”
The DTN article noted that, “Stabenow has not commented on the proposed farm cuts since the Gang of Six plan was revived Tuesday.”
With respect to the on going debt ceiling talks, Rebecca Kaplan reported yesterday at National Journal Online that, “President Obama has taken some heat from Democrats–and particularly progressive Democrats–for his willingness to alter entitlement programs to reduce the deficit. But in an interview with NPR airing on Thursday and Friday, the president sought to reassure his base of his commitment to his party’s ideals.
“‘I think what’s absolutely true is that core commitments that we make to the most vulnerable have to be maintained,’ Obama said. ‘A lot of the spending cuts that we’re making should be around areas like defense spending as opposed to food stamps.’”
Naftali Bendavid, Carol E. Lee and Janet Hook reported in today’s Wall Street Journal that, “President Barack Obama and House Speaker John Boehner are moving toward a deficit-reduction deal that could cut as much as $3 trillion in spending and overhaul the tax code by the end of next year to raise up to $1 trillion, according to people familiar with the talks.
“Until now, Republicans have shot down every proposal that involved higher taxes. But Democrats could be the major obstacle to this package because they worry that upfront spending cuts would be ironclad while any tax increases would be subject to later agreement.”
The Journal article explained that, “Mr. Obama met Thursday evening at the White House with top four Senate and House Democrats to discuss the emerging deal, one day after meeting Wednesday night with them and, separately, House Republican leaders.
“Other Democratic officials portrayed the nascent deal as somewhat fuzzier. They said the two sides hoped to commit to a package of cuts to federal programs, perhaps around $1.5 trillion over 10 years, and would postpone not only a tax overhaul but also cuts to safety-net programs until sometime before the end of 2012.”
The Journal writers added that, “Earlier Thursday, a closed-door gathering of Senate Democrats erupted in anger when White House Budget Director Jacob Lew entered, participants said. ‘As he walked into the room, it was like Mt. Vesuvius,’ said Sen. Barbara Mikulski (D., Md.). ‘You can’t ask us to vote when we have not been part of the deal.’
“Speaking after that meeting, Majority Leader Harry Reid (D., Nev.) said, ‘This can’t be all cuts. There has to be balance. There has to be revenues.’”
David Rogers and Carrie Budoff Brown reported last night at Politico that, “This latest attempt steps back a notch from their $4 trillion ‘grand bargain,’ but the speaker and the president remain convinced that thinking bigger is better to get past the immediate debt crisis.
“With just 12 days left until the Treasury Department runs out of money, major elements will have to be subject to legislation to be completed by Congress under a tightly written schedule. But the goal is to combine appropriations cuts, entitlement reforms and tax overhaul in a single endeavor to more than match the $2.4 trillion increase in the debt ceiling needed to get past the 2012 elections.”
Carl Hulse and Jackie Calmes reported in today’s New York Times that, “But the president and Mr. Boehner were moving ahead with their plan, aides said, trying to agree on matters like how much new revenue would be raised, how much would go to deficit reduction, how much to lower tax rates and, perhaps most critical, how to enforce the requirement for new tax revenue through painful consequences for both parties should they be unable to overhaul the tax code in 2012.
“The White House wants a trigger that would raise taxes on the wealthy; Mr. Boehner wants the potential penalty for inaction to include repeal of the Obama health care law’s mandate that all individuals purchase health insurance after 2014.
“Officials on all sides of the tense negotiations warned that no firm deal to raise the nation’s $14.3 trillion borrowing ceiling was in hand, and tried to play down progress — if only to stave off attempts to change the deal’s shape or to kill it by hard-liners on both sides of the debate.”
Reid J. Epstein reported yesterday at Politico that, “Senate Budget Committee Chairman Kent Conrad (D-N.D.) broke with President Barack Obama on Thursday, saying he prefers a six-month extension to raise the debt ceiling to allow more time for long-term budget negotiations.
“The White House has refused to support any short-term debt ceiling plan, arguing for larger plans that have not drawn much support in Congress.
“Appearing on ‘Morning Joe’ on MSNBC and CNBC’s ‘Squawk Box,’ Conrad also urged the uncompromising elements of both parties to back the plan brokered by his Gang of Six. He said the six-month delay would better allow time to eventually reach a deal for the larger plan to pass.”
And Erik Wasson reported yesterday at The Hill’s On the Money Blog that, “Sen. Kent Conrad (D-N.D.), a member of the Senate Gang of Six deficit-cutters, said Thursday that the group has been refining legislative language to implement its debt-reduction framework and that a bill can ‘probably’ be ready by the debt-ceiling deadline of Aug. 2.”
In other Farm Bill developments, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “House Agriculture Committee Chairman Frank Lucas says the focus of the next farm bill when it comes to conservation is to keep the framework intact to protect soil and water in the face of projected cuts that will affect those programs that apply to farmers.
“‘The federal budget, if we make the right decisions, will improve,’ Lucas, a Republican from Oklahoma, said in an interview with DTN. ‘There will be more federal resources in the future. We need to work now to preserve the framework of what’s important, to keep the expertise and the technology in place so that when the national economy improves, as it will, we can step back in and expand on the good work that has been done in the past.’
“Conservation also has to be a component of increasing production, whether it comes through draining water off the land in the Dakotas or keeping the soil from blowing away in Oklahoma and Texas.”
The DTN item added that, “In 2002, Lucas chaired the subcommittee for conservation in a farm bill that boosted conservation spending $17 billion over 10 years. The 2008 farm bill also added $4 billion over 10 years to conservation spending. Some of those increases were lost due to subsequent cuts, but programs for voluntary conservation have steadily risen in the past decade.”
DTN writer Katie Micik reported yesterday (link requires subscription) that, “History’s dusty shadow hangs over Oklahoma’s horizon. A coalition of conservation groups have found a way to make good stewardship pay for farmers, and in a year that rivals the Dust Bowl for drought, success can be seen in the noticeable lack of dust clouds.
“‘You know, the Dust Bowl was the greatest man-made ecological disaster until the oil spill in the Gulf. We were able to reverse the crippling dust storms not through regulation, not through lawsuits, not by running people off the land, but by working directly with the people. We didn’t go to the producers with the iron fist of government regulation, but with the open hand of friendship,’ said Clay Pope, the executive director of the Oklahoma Association of Conservation Districts and farmer in Loyal, Okla.”
The DTN article pointed out that, “Pope and others worry about what would happen if Congress cut or eliminated direct payments, which encouraged some farmers to plant marginal land to pasture in the 1990s. Losing the fixed payment would likely cause some producers to rip out their grass and plant it back to wheat. With the direct payment, producers could pencil out a greater profit planting grass, grazing cattle and/or making hay. Unbound by contract and pushed by high prices, a loss of direct payments could bring that land back into crop production.”
In news regarding dairy policy, Marc Heller reported yesterday at the Watertown Daily Times (NY) that, “The odds of passing significant changes in dairy policy before the 2012 Farm Bill appeared to take a hit when the National Farmers Union this week said it won’t support a proposal by Rep. Collin C. Peterson that resembles a plan from dairy farmer cooperatives.”
Yesterday’s article added that, “Rep. William L. Owens, D-Plattsburgh (NY), said in a telephone interview that he has studied the draft, but has not made up his mind whether to support it.”
And a news release yesterday from the House Agriculture Committee stated that, “Today, Rep. Jean Schmidt, Chairman of the House Agriculture Committee’s Subcommittee on Nutrition and Horticulture, held an audit hearing to examine Title IV nutrition programs. This is the seventh hearing in the series on farm policy that is designed to provide oversight of current spending to ensure programs are delivered effectively, while minimizing waste, fraud, abuse, and duplication. It also provides Members of the Committee with a comprehensive view of farm programs.”
Audrey Rowe, the Administrator of USDA’s Food and Nutrition Service (FNS), provided an overview of FNS programs during her opening remarks yesterday and highlighted general demographics of FNS program participants by rhetorically asking, “You may wonder who are these 45 million [Americans that participate in the SNAP program]” (related FarmPolicy.com audio– MP3- 1:18).
Administrator Rowe also discussed issues associated with the accuracy and integrity of the SNAP program (related audio– MP3- 1:14).
During the discussion portion of yesterday’s hearing, Subcommittee Chairwoman Jean Schmidt (R-OH) highlighted potential overlap of FNS programs (audio– MP3- 1:01), as well as improper FNS payments (audio– MP3- 1:41).
And Rep. Steve King (R-Iowa) inquired about the odd dichotomy of food insecurity and obesity in an exchange with Administrator Rowe (audio– MP3- 1:28).
A FarmPolicy.com audio replay of the entire subcommittee hearing from yesterday is available here (MP3).
In other policy news, Bill Tomson reported yesterday at The Wall Street Journal Online that, “The U.S. Department of Agriculture is proposing new labeling requirements to make it more obvious to consumers when the meat they buy has been injected with solutions containing water, salt or other ingredients.
“Added ingredients pumped into the meat sold at retail currently have to be listed somewhere on the package, the USDA said, but labels should be clearer by requiring them to be listed more prominently.”
Garrett Tenney reported yesterday at FoxBusiness Online that, “Mother nature is every farmer’s best-friend — and worst enemy.
“Deadly tornadoes, record flooding, and one of the worst droughts in recent history are making this year an especially challenging one for crop growers. In Mississippi, some farmers are facing flooded fields side-by-side with fields that haven’t seen significant rain in months.
“Billy Whitten can’t remember ever having to deal so much water and so little water at the same time, much less having the two extremes right next to each other.”
Dan Piller reported yesterday at the Des Moines Register Online that, “U.S. Department of Agriculture meteorologist Brad Rippey is warning of new heat waves later this month and into August.
“‘As we move ahead into next week and the latter part of July it does appear that the heatwave will reload across the south central U.S. and we may see a second or even a third push of these hot, humid conditions across the Midwest in late July and early August,’ Rippey said.
“He added, ‘again, it’s very untimely for silking corn, for blooming soybeans and it’s not something we wanted to see especially after a cool, wet spring that may have limited root development in some areas of the Midwest.’”
Mr. Piller added that, “This week’s heat wave across the Corn Belt has coincided with corn pollination. Since pollination occurs best at temperatures in the upper 80s, the extreme heat of this week has raised the possibility of reduced yields for this year’s corn crops.”
A news release yesterday from the Senate Agriculture Committee stated that, “Michigan Senator Debbie Stabenow, Chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry, today said that the Commodities Future Trading Commission needs thoughtful and independent voices to prevent another financial crisis and protect markets that are critically important for growing the economy and creating jobs. The comments came during a confirmation hearing for Mark Wetjen, who has been nominated to replace CFTC Commissioner Mike Dunn.”
Reuters writer Christopher Doering reported yesterday that, “Mark Wetjen, facing skeptical lawmakers in his nomination bid for a post on the U.S. Commodity Futures Trading Commission, said on Thursday the regulator should not stray from the wishes of Congress.
“Wetjen’s appointment to the CFTC is seen as pivotal as he could be a swing vote that bridges a growing divide among the five commissioners in their overhaul of financial regulations ranging from investor position limits to end-user exemptions.”
Mr. Doering pointed out that, “Wetjen’s nomination would require Senate confirmation — a hurdle that could be even higher than usual due to Republican antipathy toward the CFTC’s reforms and an overheated political climate ahead of 2012’s elections.
“If Wetjen is confirmed, he faces a daunting task getting immersed in the fast-paced rule-making under way at the CFTC.”
Meanwhile, a news release yesterday from the House Agriculture Committee stated that, “Today, the House Agriculture Committee held a public hearing to review the impact of derivatives reform on end users and smaller financial institutions. This hearing comes at a pivotal point in the implementation of Title VII of the Dodd-Frank Act as the Commodity Futures Trading Commission (CFTC) moves from proposing rules to finalizing regulations.”
Sarah Gonzalez reported yesterday at Agri-Pulse Online that, “Representatives from agricultural and energy cooperatives, farm credit organizations and community banks gathered July 21 to make their case regarding the Dodd-Frank Act so as not to be categorized as ‘swap dealers.’”
The Agri-Pulse article noted that, “In previous weeks, House Committee on Agriculture Chairman, Frank Lucas, vehemently addressed issues surrounding the time constraints, definitions and regulations present in Dodd-Frank. The CFTC did finalize an Order to extend the original dates, which the Committee deemed too time constrictive for regulations to be effective.
“‘Unfortunately, we have not seen similar responses on most of the concerns that have been raised in this hearing room,’ said Lucas. ‘The Commission has given us little reason to believe that the clarity and scope of these regulations will improve.’
“Collin Peterson (D-MN), Agriculture Committee ranking member, questioned the Committee’s focus on the CFTC by bringing the accountability of the prudential regulators into light.”
Reuters writer Tom Miles reported yesterday that, “Hopes of rescuing a small trade deal from the ashes of the Doha round of global talks are likely to be dashed, several trade negotiators said on Thursday.”