Budget and Farm Policy Issues
Janet Hook reported in Saturday’s Wall Street Journal that, “Washington’s high-decibel battle over the payroll-tax break ended Friday without debate, a roll-call vote or even a peep of dissent, as Congress approved legislation to prevent a Jan. 1 tax increase.
“The House and Senate quickly approved a two-month extension of the tax break. The action ended the latest in a series of partisan stalemates that have driven Congress’s approval ratings to an all-time low.”
And Andrew Restuccia reported on Friday at The Hill’s Energy Blog that, “President Obama signed into law a broad payroll tax package Friday afternoon that includes a measure requiring him to make a speedy decision on the Keystone XL pipeline.
“The GOP-backed measure requires the administration to make a decision within 60 days on the pipeline, which would carry oil sands crude from Alberta, Canada, to refineries on the Gulf Coast. In order to reject the pipeline, Obama would have to declare that the project is not in the national interest.”
Meanwhile, Rosalind S. Helderman reported in Saturday’s Washington Post that, “Congressional Republicans leave Washington for the holidays divided and embittered over the last round of December’s payroll-tax fight, and their lingering unhappiness could complicate negotiations starting in January on a deal for a full-year tax holiday.
“Some House Republicans say they feel sold out by their counterparts in the Senate. For their part, Senate Republicans had worried that their House colleagues were harming the GOP’s chances of winning back their chamber by risking a tax increase if House members didn’t get concessions they wanted.”
“Perhaps no one was more dismayed at the outcome than the nearly 90 freshmen Republicans who came to Washington in January on a tea party wave promising to change the town. Many felt that the year ended with a temporary tax fix that was the epitome of business as usual,” the article noted.
Ms. Helderman added that, “In brief remarks after the bill’s passage Friday, [President] Obama praised Congress for ensuring that Americans’ payroll taxes will not rise next month. And he said lawmakers should move quickly in January to extend the tax cut for a full year.”
Looking ahead to next year, Felicia Sonmez reported on Friday at the 2Chambers Blog (Washington Post) that, “When lawmakers return next month — Jan. 17 in the House, Jan. 23 in the Senate — they’ll immediately face the task of crafting a deal to extend the payroll tax cut and other provisions through the end of the year.”
Ms. Sonmez explained that, “In the payroll tax fight, both sides were aiming to find savings of about $200 billion in order to offset the cost of extending the payroll tax holiday, unemployment insurance, the ‘doc fix’ and other provisions for another year.
“That amount may seem like a pittance compared to $2.1 trillion, but $200 billion — stretched over 10 years — would roughly equal the same amount of savings enacted by the debt-ceiling deal.
“In the payroll tax talks that culminated last week in a two-month deal, Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) were only able to agree on $33 billion in savings, and the battle that begins January will pick up where those negotiations left off.”
Friday’s 2Chambers update also pointed out that, “While the two might not appear to be connected, the reason the supercommittee failed is the same reason Reid and McConnell fell short of their $200 billion goal: the difficulty of finding more budget savings that both parties agree to. And in the case of the payroll talks, it wasn’t that leaders on one side or the other didn’t want a full one-year deal but rather that they didn’t agree on how to get there.
“Some of the bipartisan solutions that lawmakers have put forward are ones that were identified in the spring and summer negotiations led by Vice President Joe Biden as well as in the supercommittee talks.
“The question going forward is whether lawmakers will seek to draw from among the other bipartisan ideas discussed in those talks — and if so, which ones.”
Separately, Erik Wasson reported on Friday at The Hill’s On the Money Blog that, “Without fanfare, President Obama signed the $1 trillion 2012 omnibus spending bill into law on Friday.
“The bill passed both houses of Congress on Dec. 16, but the government has been operating on a short-term continuing resolution that was set to run out at midnight Friday. The 2012 spending process is now complete.”
Mr. Wasson reported on Sunday at the On the Money Blog that, “Eighty-six Republicans voted against this year’s omnibus and many did so in part because of the opaque process in which it was assembled and rushed to the floor less than two full days after being unveiled.”
Sunday’s update also explained that, “Good government groups are also outraged by the lack of transparency. Several are spending the coming weeks tearing into the massive bill to find out what hidden provisions it might contain.
“The cure is ‘returning to regular order,’ and debating each of the 12 appropriations bills individually.
“In 2012 this will be especially difficult because of the election, members of Congress, aides and experts said.”
In other developments, William Neuman reported in Saturday’s New York Times that, “The government is back in the business of counting sheep. And mink and goats and catfish and lots of other things that are raised on farms.
“In an abrupt about-face, the United States Department of Agriculture has decided to reverse a decision to eliminate dozens of long-standing statistical reports on a wide range of farming activities, including beekeeping, hop growing and flower farming. The agency’s statistics service said in October that it was forced by budget constraints to cut the reports and that doing so would save $11 million a year.
“That led to an outcry from farm groups that said the information collected by the agency was essential.”
In more specific Farm Bill news, Pat Westhoff, the director of the Food and Agricultural Policy Research Institute at the University of Missouri, indicated in an item posted on Saturday at the Columbia Daily Tribune Online (Missouri) that, “The farm bill debate will resume next year. Many groups want a broad and open debate about the future of farm and food policy, with lots of hearings and public discussion. Others seek an accelerated process that would use the bill developed this fall by the committee chairs as a starting point. If a bill is not completed early in the year, election-year politics might make it difficult to complete a new farm bill until after the elections next fall.”
Recall that Secretary of Agriculture Tom Vilsack was a guest last week on the Agri-Pulse Open Mic program with Agri-Pulse Senior Editor Stewart Doan (full interview available here). During the course of that discussion, Mr. Doan and Sec. Vilsack talked about the Farm Bill and the potential complexity of administrating some of the program options that were reportedly contained in the “supercommittee” Farm Bill. To listen to this portion of the Open Mic interview from last week, just click here (MP3- 1:50).
And, Mary Kay Thatcher, Senior Director of Congressional Relations at the American Farm Bureau Federation was a guest on Friday’s AgriTalk radio program, where she and AgriTalk producer John Herath discussed the Farm Bill, as well as budget and regulatory issues- related clip here (MP3- 3:10), full interview here.
Regulations (MF Global)
In more detailed discussion on regulatory issues and agriculture, on Thursday’s AgriTalk program, Agriculture Secretary Tom Vilsack and AgriTalk producer John Herath discussed a few aspects of this percolating issue- related audio here (MP3- 2:18).
And The Wall Street Journal editorial board opined today that, “President Obama is leading his regulators in an anvil chorus unlike anything in modern U.S. history. So it is unsurprising but still instructive that independent students of regulation say the quality of the many rules they’re putting out seems to be at all-time lows.
“Regulatory quality isn’t the same as content—though bad rules are usually badly written, as seems to be the case here. Rather, quality refers to a deliberative process: defining the problem; measuring costs, benefits and risks; weighing alternatives, making trade-offs, avoiding duplication; and giving the public opportunity to comment. If all goes well a quality rule will promote or at least not impair ‘economic growth, innovation, competitiveness and job creation,’ as Mr. Obama’s January 2011 executive order on regulation had it.
“It’s too boring for the press corps to notice, but a growing body of evidence suggests that the Obamanauts are undermining these basic due diligence practices that have been commonly accepted by whatever party happened to be in power.”
Meanwhile, a news release Friday from Sen. John Thune (R-SD) indicated that, “U.S. Senators Max Baucus (D-Mont.), Chairman of the Senate Finance Committee, and [Sen. Thune], Chairman of the Senate Republican Policy Committee, today sent a letter to U.S. Attorney General Eric Holder asking that the Department of Justice use all tools available to investigate, and potentially prosecute, MF Global executives who may have made illegal transactions using customer funds.”
And Bloomberg writer Hans Nichols reported on Friday that, “President Barack Obama’s re-election campaign returned campaign contributions from Jon S. Corzine, former chairman and chief executive officer of MF Global Holdings Ltd., according to a Democratic official.”
Stacy Finz reported in Sunday’s San Francisco Chronicle that, “The average age of a farmer in California is creeping toward 60, and the California Department of Food and Agriculture is trying to attract newcomers to work the land.
“The need is especially acute, given that experts are forecasting that the world will have to double its food supply to keep up with a booming population – growing from 7 billion people to 9 billion by 2050. California is a significant player in feeding the globe, providing 12 percent of the nation’s agriculture exports.
“Farming also is a $37.5 billion business in California, employing 800,000 people. With the average age of the primary farm operator now 58 – nearly 20 percent are 70 or older – it’s crucial that the state’s farms and ranches get fresh blood, said Karen Ross, California’s agriculture secretary.”
The article noted that, “Oddly enough, Ross said, there’s a whole crop of greenhorns willing to take the reins. But they’re decidedly different from the face of the traditional farmer or rancher. And their methods – everything from urban rooftop gardening to the latest in conservation and sustainability practices – buck the old norm.
“‘We’re seeing an interest from young people who don’t come from farming families,’ Ross said, adding that last year a record-breaking 70,000 students enrolled in their high school Future Farmers of America program.”
In other news, the AP reported on Saturday that, “Drought and strong prices could push more peanut production out of traditional regions and into states such as Arkansas and Mississippi not known for growing the crop but with ample water to give it a try.
“Some major peanut states, including Georgia and Texas, have struggled to grow the crop amid an extended drought, leading farmers elsewhere to consider cashing in on prices that have soared as production dropped.
“In 2010, American farmers harvested 2.1 million tons of peanuts, according to the National Agriculture Statistics Service. That fell to 1.8 million tons in 2011, a 15 percent drop that caused prices to more than double to about $1,000 a ton.”
The article pointed out that, “Georgia produces by far the most peanuts, though it dropped from 565,000 acres planted in 2010 to 475,000 acres in 2011. Alabama and Texas are the other big producers, with smaller crops in states including North Carolina, Florida and Oklahoma.
“Kerry Colbert, who signs up farmers to sell their crops to peanut processor Clint Williams Co. of Madill, Okla., said Mississippi growers planted about 16,000 acres in 2011 and could expand to 30,000 acres next year.
“One stumbling block, Colbert said, is that farmers need closer collection points. Clint Williams is trying to respond to that concern by building up to three new collection centers in Arkansas and Mississippi.”
On Friday, USDA’s Economic Research Service released an update to its Food Price Outlook (2011and 2012) which indicated that, “The Consumer Price Index (CPI) for food is probably the most widely used indicator of changes in retail food prices…In 2011, the CPI for all food is projected to increase 3.25 to 3.75 percent.”
Ian Berry reported in today’s Wall Street Journal that, “U.S. corn futures have rallied recently on concern that hot, dry weather could persist in South America as the crop enters a critical phase of development.
“Corn futures had slumped for much of the last three months as the U.S. crop came out of the field and export demand dried up amid increased competition. But the focus is now shifting to South America to see if production there will fall short of expectations, leaving the U.S. to fill the gap.
“Corn for March delivery at the Chicago Board of Trade climbed 6.3% last week, settling at $6.1950 a bushel. Soybean futures continued to gain on the same weather concerns, rising 2.9% on the week to close at $11.63 a bushel.”