June 16, 2019

Broad Policy Issues; Farm-Food Policy; Ag Economy; and, Regulations

Broad Policy Issues- Budget, Taxes, Immigration, and Trade

Budget, and Taxes

Lori Montgomery and Ed O’Keefe reported in today’s Washington Post that, “Before ceding full control of Congress to the GOP in January, Senate Democrats are planning to rush a host of critical measures to President Obama’s desk, including bills to revive dozens of expired tax breaks and avoid a government shutdown for another year.”

The Post writers explained that, “Republican leaders, too, are inclined to clear the legislative decks of must-pass bills so they can start fresh in January, when they will have control of both chambers of Congress for the first time in eight years. Leaders from both parties are due at the White House for a lunch Friday to begin discussing the parameters of the possible in a new era of Republican domination.”

Today’s article noted that, “House and Senate negotiators have been at work for weeks on a comprehensive bill to fund federal agencies through next September, and aides said they hope to bring the measure to a vote before the Dec. 11 deadline.

Some conservatives are agitating for a temporary measure that would allow Republicans to revisit agency funding levels when they take charge early next year. But Republican leaders, including Sen. Mitch McConnell (Ky.), would rather get the bills for fiscal 2015, which began in October, out of the way so they can focus on crafting a budget for fiscal 2016.”

And more specifically on tax issues, Montgomery and O’Keefe stated that, “Lawmakers are also under pressure to revive a variety of tax breaks that expired at the end of last year, including popular business perks such as the credit for research-and-development expenses. The House has voted to revive the research credit and make it a permanent part of the tax code, while the Senate has advanced a bill to revive all the tax breaks and extend them through 2015.

“Earlier this year, a battle appeared to be brewing over the issue, which has significant implications for broader tax reform. But leadership aides in both parties predicted this week that lawmakers would adopt the Senate approach and avoid a potentially divisive fight over giving some breaks favored treatment.”

Bernie Becker reported yesterday at The Hill Online that, “The House Republican Conference could take a harder line on extending a raft of expired tax breaks after this week’s election, a top Republican aide said Thursday.

George Callas, a senior aide to House Ways and Means Chairman Dave Camp (R-Mich.), said that he didn’t think House Republicans could get behind restoring most of the expired breaks, commonly known as ‘tax extenders,’ for two years.

“The Senate Finance Committee has crafted just such a bipartisan measure. But House Republicans have pushed in recent months to indefinitely revive some of the so-called ‘tax extenders’ — like the credit for business research and provisions for business expensing.”

The Hill update noted that, “Most of the tax breaks lapsed at the end of 2013, and would be restored through 2015 under the Senate legislation. Callas also suggested the House could be open to extending some of the GOP priorities for longer than two years, but not indefinitely.

“Still, both Democratic and GOP aides appearing at the seminar [a post-election Bloomberg BNA event sponsored by KPMG] expressed confidence that some sort of a deal would emerge before the end of December.”

Richard McGregor reported yesterday at The Financial Times Online that, “Barack Obama and the newly victorious Republican leadership in Congress have both pledged to seek common ground in a Washington riven by partisan division.

They will each, however, come to a lunch meeting at the White House on Friday with priorities that are anathema to the other side.”

However, the FT article added that, “Any ability of Mr Obama and the Republicans to work together may have already been poisoned, by the president’s commitment to bypass Congress on immigration reform with an executive order.”



Carol E. Lee and Peter Nicholas reported yesterday at The Wall Street Journal Online that, “Two days after his party’s midterm romp, House Speaker John Boehner became the second leading Republican to warn that unilateral action by President Barack Obama on immigration would ‘poison the well’ for any cooperation with the new GOP Congress.

“Among the causes of the standoff: a year of previously unreported talks between Messrs. Boehner and Obama over a legislative compromise to fix the balky immigration system.

The two men started talking after the 2012 election, according to detailed accounts provided by several aides on both sides. The discussions ended this summer with the two sitting stony-faced around a white wrought-iron table outside the Oval Office.”

The Journal article explained that, “At the White House, the question isn’t whether Mr. Obama will act [on immigration reform through executive branch authority] but how sweeping his order will be. He is under intense pressure from immigration activists, who worry he will back down because of the election results or to avoid antagonizing the GOP.

The White House isn’t ruling out an immigration deal with Congress before the next president takes office in 2017, and one remains possible. But in the eyes of many of those involved in the talks, the Obama-Boehner discussions were the last, best chance to reach an agreement.

Mr. Obama promised on Wednesday to rescind any executive action if Congress later passes legislation. Few think it is likely to. In outlining their plans for the year, neither Mr. Boehner nor Mr. McConnell put immigration on the agenda. In fact, if Mr. Obama goes through with an executive action, there will likely be a congressional effort to undo it.”

Ben Kamisar reported yesterday at The Hill Online that, “Rep. James Lankford (R-Okla.), his state’s senator-elect, early Thursday cautioned President Obama against issuing an executive order on immigration, which Lankford believes would create more problems than it solves.”

Cristina Marcos reported yesterday at The Hill that, “Rep. Lamar Smith (R-Texas) said Thursday that Republicans could sue President Obama over his expected executive action on immigration or try to block funding for its programs.

“In an interview with Bloomberg TV, Smith suggested House Republicans would try to limit implementation of the executive order.”

And Iowa GOP Senator Chuck Grassley tweeted yesterday that, “Pres Obama wants to immigration by ExecOrder. That wld be unconstitutional Does he think Constitution Writers wanted a King”

The New York Times editorial board opined today that, “President Obama said on Wednesday that he would act on his own by the end of the year to ‘improve’ the immigration system, presumably by giving many — perhaps millions — of the country’s unauthorized immigrants temporary protection from deportation and permission to work. He has said this before, only to back off in deference to election-year politics.

Now the election is over, and the only thing to say to the president is: Do it. Take executive action. Make it big.

He must not give in to calls to wait.”



The Washington Post editorial board indicated today that, “Now that Republicans have gained control of Congress, no policy area is riper for bipartisan action than trade. President Obama’s trade representative, Michael Froman, is deeply engaged in trade-expansion talks with 11 Asia-Pacific nations, including Japan. A bipartisan legislative framework for speeding passage of a finished agreement has already been written.

“The proposed Trans-Pacific Partnership would result in greater U.S. access to Japan’s market for services and products, including long-excluded U.S. farm products. This means jobs and income for Americans and a faster pace of institutional reform for Japan’s huge but stagnant economy. The partnership also would strengthen the U.S. role as a strategic counterweight to China, which is trying to organize the region on terms favorable to its Communist government through a planned Free Trade Area of the Asia Pacific. Separately, the United States is pursuing a tariff-slashing deal with the European Union that could receive a boost from successful talks in Asia.”

With respect to the Free Trade Area of the Asia Pacific, Bob Davis reported yesterday at The Wall Street Journal Online that, “Senior negotiators at the Asia-Pacific Economic Cooperation forum agreed to a two-year study into the possibility of creating a Pacific-wide free-trade zone, APEC’s executive director said.

“‘It’s not an opening of negotiations,’ on what is known as the Free Trade Area of the Asia Pacific, said Alan Bollard, the APEC executive director in a press briefing. ‘It’s a strategic study of what an FTAAP could mean in detail.’”

Meanwhile, an article today at The Japan Times Online stated that, “Prime Minister Shinzo Abe is concerned about whether the Trans-Pacific Partnership free-trade pact talks will be finalized while U.S. President Barack Obama can wield influence, TPP minister Akira Amari indicated Thursday.

“‘The prime minister is concerned’ about how the negotiations will proceed following a major setback for the Democrats led by Obama in the U.S. midterm elections earlier this week, Amari told reporters after meeting with Abe at the latterr’s office.”


Farm and Food Policy Issues

Ron Hays, of The Oklahoma Farm Report and Radio Oklahoma Network discussed a variety of policy issues with House Ag Committee Chairman Frank Lucas (R., Okla.) on Tuesday evening.

Mr. Hays asked Chairman Lucas, “Now, clearly if the GOP takes control in the Senate there’s been a lot of talk about revisiting at least the nutrition part of the farm bill.”

Chairman Lucas noted that, “Oh, I know there’s a lot of concern about that. But I would remind all of my colleagues, temper your expectations, because, after all, you still have to have a signature by the President on any major reform bill. There will not be sufficient Republican votes either in the House or the Senate, no matter how good the night turns out—and I’m very optimistic—to override a veto, so we still have to work through the process.

But the hearings, the consideration, looking at the things that could be better done to not only help deliver the safety net on the nutrition side, but give people a chance to step up from that safety net, to get back on their feet, so to speak, is an important thing. But yes, that’s what I would expect would be, the nutrition title would be the hot topic next year.”

Mr. Hays also inquired about farm policy issues: “One of the unfinished business items for the commodity title and for the risk management side of the farm bill is APH for winter wheat producers. And asking the Secretary of Agriculture this last week at the National FFA convention, he didn’t say definitely no, but he sure was awfully against moving any off of his position on that.”

Chairman Lucas indicated that, “Well, first bear in mind we’ve come a long ways. Initially he said APH, the adjustment that is so important in the drought stricken areas in the last five years, was unachievable. Now, basically with the exception of winter wheat, they’ve made it available for every other crop across the country and all the regions, so I’d say there’s a window of opportunity.

But I promise you, the old hometown expression of stink on a June bug, I’ve been like stink on a June bug on the Secretary. I’m trying to help enlighten him, trying to help move him in that right direction. But so far he says he just can’t do it. But we all need to encourage him. Not just the chairman of the Ag Committee, but everyone needs to help encourage the Secretary on that issue.”

Meanwhile, a news release yesterday from USDA’s Risk Management Agency (RMA) stated that, “[RMA] today announced that the new Whole-Farm Revenue Protection insurance policy is now available for the 2015 crop year. The policy allows producers to insure between 50 to 85 percent of their whole farm revenue and makes crop insurance more affordable for producers, including fruit and vegetable growers and organic.

Whole-Farm Revenue Protection allows these growers to insure a variety of crops at once instead of one commodity at a time. That gives them the option of embracing more crop diversity and helps support the production of a wider variety of foods.”

Rod Stetzer reported yesterday The Chippewa Herald (Chippewa Falls, Wis.) Online that, “U.S. Rep. Ron Kind (D-La Crosse) says the U.S. Farm Bill will double or triple farm subsidies. While the price of a bushel of corn is $3.40, Kind said the farm bill calls for a subsidy to boost the price to $3.70.

“‘We are going to look at huge payments going out the door,’ he said in an interview Oct. 23 at the Herald office.”

For more information on prices and farm program decisions, see this Kansas State University update yesterday from Art Barnaby, “November Updated MYA Price Estimates for ARC and PLC Commodity Programs.”

In other developments, Jess Newman reported yesterday at The Wall Street Journal Online that, “A coalition of advocacy groups sued the U.S. Food and Drug Administration, seeking to vacate its approvals of several livestock-feed products that are widely used to add weight to farm animals such as turkeys, cattle and pigs.

“In two different lawsuits filed on Thursday in the U.S. District Court of Northern California in San Francisco, groups including the Center for Food Safety, the Humane Society of the United States and United Farm Workers of America argue that in approving drugs like Topmax, a medicated feed additive used to produce lean muscle instead of fat, the FDA failed to adequately consider the drugs’ collective effects on animal welfare, worker safety, wildlife and U.S. waterways.”


Agricultural Economy

Bloomberg writer Rudy Ruitenberg reported yesterday that, “World food prices tracked by the United Nations fell for a seventh month in October, the longest slide since 2009, adding to falling energy costs in slowing inflation and making nutrition more accessible.

“An index of 55 food items fell 0.2 percent month-on-month to 192.3 points, the lowest since August 2010, the UN’s Rome-based Food & Agriculture Organization wrote in an online report today. The index is stabilizing, it said.

Food prices are falling amid an outlook for bigger grain crops, rising milk output as well as a recovery in U.S. pork production.”

Nonetheless, Kelsey Gee reported in today’s Wall Street Journal that, “U.S. cattle prices are surging again, a fresh blow to consumers already stung by record costs for steaks and ground beef.

“Live-cattle futures leapt to an all-time high of $1.705 a pound last week, reflecting concerns that domestic cattle supplies are even tighter than many analysts expected [related graph]. Futures have risen 11% since mid-August and 23% for the year, among the best-performing U.S. commodities.

Analysts said the latest jump in cattle prices likely would be passed along to grocery shoppers in the next few months. That would push up retail fresh-beef prices that soared to a record $5.924 a pound in September, a 20% increase over a year ago, according to the U.S. Department of Agriculture.”

AP writer Candice Choi reported yesterday that, “Rising beef prices might not mean the cost of a Whopper is going to skyrocket, but it could mean you’ll be encouraged to order a chicken sandwich instead.

“Beef prices have climbed in part because of rising demand overseas and droughts in recent years that have caused livestock producers to shrink their cattle herds.”

The article noted that, “The soaring prices have hurt fast-food restaurants that feature beef as the centerpiece of their menus: Burger King, Wendy’s and McDonald’s — the nation’s three biggest burger chains — all say they’re dealing with higher beef costs.”

Also, Stephanie Strom reported in today’s New York Times that, “The Department of Agriculture will allow Chinese poultry processing companies to ship fully cooked, frozen and refrigerated chicken to the United States.

“Food safety advocates have been predicting the announcement since the department last year approved the export of chicken raised in the United States to be processed in China. But shipping chicken to China for processing and then shipping it back here has proved uneconomical, and no American poultry firm has done so.”



DTN writer Todd Neeley reported yesterday that, “Farmers and ranchers at times have been caught off-guard by neighbors or regulators questioning how they work the land. Some are willing to fight it out in federal court, but it can be costly just to prove they were right.

Concerns are mounting that perhaps no agricultural practice truly is exempt. A newly proposed Clean Water Act rule defining waters of the U.S. appears to call for a significant regulatory expansion of waters coming under federal control, though EPA estimates minimal expansion of jurisdiction.

“In recent years, some farmers and ranchers conducted seemingly exempted practices but the EPA slapped them with alleged CWA violations.”

The DTN article added that, “So, when EPA released an interpretive rule that includes 56 exempted conservation practices, suspicion grew that the agency is instead narrowing exemptions by requiring farmers to follow Natural Resource Conservation Service specifications. EPA Administrator Gina McCarthy told DTN last summer the list of agricultural conservation practices could grow or shrink over time.

“In this series, ‘Web of Water,’ DTN looks at some of the concerns farmers have about the rule and how it might be implemented. Although EPA has outlined a number of agriculture-related exemptions, this fourth and final story in the series looks at the potential threats farmers face when doing seemingly normal farming operations.”

Timothy Cama reported yesterday at The Hill Online that, “The House is planning to vote later this month on a pair of bills aimed at increasing transparency in the scientific process behind President Obama’s environmental rules.

One bill would prohibit the Environmental Protection Agency (EPA) from issuing any regulations whose scientific backing is not publicly available. The other would reform the EPA’s Scientific Advisory Board to allow public participation in their proceedings and introduce additional peer review.”

And Peter Schroeder reported yesterday at The Hill Online that, “The Commodity Futures Trading Commission (CFTC) pulled in a record amount of monetary sanctions against bad financial actors during fiscal 2014.

“The derivatives regulator announced Thursday that it had pulled in $3.27 billion in penalties from individuals and firms, and filed 67 new enforcement actions during the most recent fiscal year.”

Keith Good

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