November 21, 2019

Thursday Morning Update: Policy Issues; Estate Tax; Trade; and, Biofuels

Note: Thanks again very much to the many readers who have expressed how much they have enjoyed the FarmPolicy newsletter over the years. The numerous Emails and tweets from readers about the newsletter ending next week have been extraordinarily gracious and very much appreciated.

Policy Issues

The House Agriculture Subcommittee on General Farm Commodities and Risk Management will hold a hearing this morning to take a closer look at Farm Bill implementation issues.

Secretary of Agriculture Tom Vilsack and Deputy Agriculture Secretary Krysta Harden were both guests on yesterday’s AgriTalk radio program with Mike Adams, where a good deal of the discussion focused on the Farm Bill.

During a portion of his discussion with Dep. Sec. Harden (related transcript here), Mr. Adams asked, “What’s your feel overall how implementation’s been going?”

Ms. Harden noted that, “Well, overall I feel really good. I think we hit the ground running. We had a lot of time to prepare, frankly, so I think our teams were ready in the field as well as here in Washington, so as soon as Congress got us a bill and the President signed it, we hit the ground… There were a lot of decision points, I think over 400 decision points across the department, so a lot of folks were involved. But we’ve gotten everything out. And I’m glad you mentioned the signup dates. The deadline is next Tuesday. I believe it’s the 31st.”

Mr. Adams also asked, “Any thoughts that this one would need to be extended past next Tuesday?”

Ms. Harden noted that, “Well, you know, we’re looking at the numbers. We’re looking at how many folks, how many outstanding, where we see pockets of problems and trying to really encourage people right now to get in there. This is supposed to work for producers. We want their opinions. They have the ability this time, more than in other farm bills, to really decide what program, what policies work best for their operation, so we want them in there.

“We’re encouraging. We sent out postcards, we’re having meetings, we’re working with partners, so I’m really hopeful that this deadline will hold firm. A lot of folks had to sign a register, and you know what that means. It means they’ll come in later for the face-to-face meeting. We just couldn’t handle the workload. And that deadline is actually May 15th, which is a hard deadline if we’re going to be ready for payment. So I’m hopeful that we can get this done within these time frames.”

When Mr. Adams spoke with Sec. Vilsack yesterday (unofficial transcript here), the issue of an extension also came up in this exchange:

Mr. Adams: So you do not anticipate, at this point, the need or even the consideration of an extension of that deadline in any way?

Sec. Vilsack: We’re going to look at this from day to day. I’ve talked to our team about maybe the opportunity for flexibility. But given the pace of what we’re seeing, it may not be necessary.

Mr. Adams: But that’s still a possibility?

Sec. Vilsack: It’s still a possibility.

Mr. Adams: Okay, so we’ll watch that as far as as we get closer to that deadline next Tuesday. When would you make that call if there was an extension?

Sec. Vilsack: Probably the end of this week.

The AgriTalk discussion with Sec. Vilsack also turned to highlight trade issues, the definition of “actively engaged,” proposed Dietary Guidelines, and “coexistence.”

Meanwhile, Jonathan Weisman reported in today’s New York Times that, “House Republicans beat back protests from fiscal hawks and narrowly passed a budget that increases war spending but slashes domestic programs and begins to privatize Medicare with a goal of balancing the federal books in nine years.”

The Times article noted that, “The budget would turn Medicaid into block grants to the states, cutting health care spending for the poor by $900 billion. The food stamp program would also be turned into block grants and cut by hundreds of billions of dollars.”

Mr. Weisman explained that, “The Senate will go through its own version Thursday and deep into Friday morning with what has become known as a ‘vote-orama,’ a free-for-all of unlimited amendments — some budget oriented, many politically loaded and none binding.

“If at dawn the Senate then passes its budget, House and Senate Republican negotiators will set out to reconcile similar but competing versions, hoping to present a unified Republican plan for the first time in a decade.”

An update yesterday from the Food Research and Action Center (FRAC) indicated that, “[FRAC] utilized SNAP participation data by Congressional District, released earlier this month by the Food and Nutrition Service of the U.S. Department of Agriculture, to shine a spotlight on how the members voting for the budget are voting against the interests of tens of thousands of their own constituents who rely on SNAP for nutrition and as a means out of poverty.

“Here is a snapshot of SNAP in the 22 districts (pdf) of members who voted for this huge cut despite the overwhelming number of households with children, seniors, people with disabilities, veterans, unemployed workers, and others who need SNAP to make it through the month.”

In other policy developments, a news release yesterday from Sen. John Barrasso (R., Wyo.) indicated that, “Today, [Sen. Barrasso], spoke on the Senate floor about his amendment to Senate Budget Resolution, S. Con. Res. 11, that limits the Environmental Protection Agency (EPA) from adopting an expanded and broad regulatory definition of ‘Waters of the United States.’

“Barrasso’s amendment #347 establishes a spending-neutral reserve fund to ensure federal jurisdiction under the Clean Water Act is focused on water quality, which may include limiting federal jurisdiction based on certain criteria.”

A separate update yesterday from Sen. Barrasso noted that, “Today, [Sen. Barrasso], successfully included an amendment to Senate Budget Resolution, S. Con. Res. 11, that limits the Environmental Protection Agency (EPA) from adopting an expanded and broad regulatory definition of ‘Waters of the United States.’ The amendment passed the Senate by a vote of 59 to 40.”

An update yesterday from Sen. Thad Cochran (R., Miss.) noted that, “[Sen. Cochran] today voted for a measure that would curb the reach of the federal government to regulate puddles, ponds, ditches or other water sources.

“Cochran voted for an amendment to the Senate’s FY2016 Budget Resolution that was introduced to bring clarity through jurisdictional limits on the Environmental Protection Agency (EPA) effort to use the proposed Waters of the United States (WOTUS) rule to expand the scope of the Clean Water Act. The amendment offered by Senator John Barrasso (R-Wyo.) passed 59-40.”

Jordain Carney reported yesterday at The Hill Online that, “The Senate passed a pair of ‘clean water’ amendments to the Republican budget Wednesday.

Ninety-nine senators voted to include an amendment from Sen. Debbie Stabenow (D-Mich.) that would establish a deficit neutral reserve fund, essentially a budgetary placeholder, on ‘keeping the Federal Water Pollution Control Act focused on protection of water quality.’ It also outlines what falls within federal jurisdiction and ‘create clear and unambiguous exemptions’ for the Environmental Protection Agency.”

The Hill article added that, “Sens. Claire McCaskill (D-Mo.), Joe Manchin (D-W.Va.), Heidi Heitkamp (D-N.D.) and Amy Klobuchar (D-Minn.) broke with Democrats and voted with Republicans for Barrasso’s measure. Sen. Angus King (I-Maine) also voted with Republicans.”

And Philip Brasher reported yesterday at Agri-Pulse that, “The budget resolution, which doesn’t need to be signed by the president, is providing an opportunity for senators to offer amendments that will serve as test votes on a variety of issues.

“Sen. Jeff Flake, R-Ariz., is sponsoring several attacking the crop insurance program. One calls for eliminating premium subsidies for farmers with adjusted gross incomes exceeding $750,000 a year. A second proposes ending premium subsidies for policies with the Harvest Price Option (HPO). A third calls for disclosing the names of policy holders.”

Also yesterday, a news release from the House Ag Committee stated that, “Today, Rep. David Rouzer (R-NC), Chairman of the House Agriculture Committee’s Livestock and Foreign Agriculture Subcommittee, held a public hearing to examine the implications of potential retaliatory measures against the United States in response to its country-of-origin labeling (COOL) requirements for beef and pork.

“In 2002, Congress initially adopted a country-of-origin labeling requirement for meat products despite serious concerns that it would not comply with trade commitments. Subsequently, the law was amended in 2008 and immediately challenged in the World Trade Organization (WTO) by Canada and Mexico, the main livestock exporters to the U.S. The WTO has since ruled three times in their favor, and members and witnesses at today’s hearing stressed the significance of the U.S. potentially losing its fourth and final appeal.

“‘We could be looking at substantial retaliatory sanctions against agriculture and a variety of other industries,’ Chairman Rouzer said.”

In yesterday’s release, Committee Chairman Mike Conaway (R., Tex.) indicated that, “COOL has been a failed experiment from the start, and now the economic damages we could face will be felt by all Americans, not just the agriculture industry.”

Rep. Jim Costa (D., Calif.) noted yesterday that, “It does not surprise many in this room that I believe mandatory, government-run Country-of-Origin-Labeling (COOL) is a failed experiment. Unfortunately, this issue has persisted for several years with the same flawed arguments being used time and again.”

A separate news release yesterday from the House Ag Committee stated that, “Today, the House Agriculture Committee continued its series of hearings in advance of writing legislation to reauthorize the Commodity Futures Trading Commission (CFTC), which lapsed in September 2013. Members of the Subcommittee on Commodity Exchanges, Energy, and Credit Subcommittee, chaired by Rep. Austin Scott (R-GA), held a public hearing to examine the reauthorization of the CFTC from the perspective of market participants.”

Meanwhile, Richard Marosi reported on the front page of yesterday’s Los Angeles Times that, “For the last week, striking farmworkers in Baja California have all but stopped the winter harvest, right at its peak. While crops rot, indigenous pickers are rallying on streets and plazas as police and army soldiers keep watch, putting the normally sleepy region on edge.

“Negotiations between labor leaders and agribusinesses are scheduled to resume Wednesday in a meeting that could determine whether the walkout — the first in decades by Baja farmworkers — comes to an end or extends its sometimes violent run.

At stake is one of Mexico’s biggest harvests — millions of tons of berries, tomatoes and cucumbers that are exported to the United States. Some shortages have been reported, and Mexican police arrested more than 200 people after protests devolved into riots, rock-throwing and vandalism last week.”


Estate Tax

A news release yesterday from Rep. Kristi Noem (R., S.D.) noted in part that, “[Rep. Noem] today helped pass a repeal of the death tax out of the House Ways and Means Committee, enabling the legislation to be voted on by the full House later this year. Noem, whose family farm was hit by the death tax after her father passed away, has been a vocal supporter of its repeal.”

And an update yesterday from Sen. John Thune (R., S.D.) indicated that, “[Sen. Thune], member of the tax-writing Senate Finance Committee, today reintroduced legislation to permanently repeal the federal estate tax, better known as the death tax, to finally put an end to a punitive tax on family farms, ranches, and businesses upon the death of an owner. Thune’s bill, the Death Tax Repeal Act of 2015, is identical to legislation introduced in House of Representatives by Rep. Kevin Brady (R-Texas). The House Committee on Ways and Means will be marking up Brady’s companion bill today in committee. Thune also introduced an amendment to the Senate’s Fiscal Year 2016 Budget Resolution to create a deficit neutral reserve fund to eliminate the federal estate tax, or death tax. The Senate is expected to vote on Thune’s amendment later this week.”

An update yesterday from the Ways and Means Committee Democrats pointed out that, “New analyses from the Joint Committee on Taxation show that repealing the estate tax – through H.R. 1105 – would cost $269 billion over 10 years. At the same time, according to the JCT, in any given year fewer than 5,500 households would benefit from a repeal of the estate tax, with 75 percent of the tax cut going to inheritors of estates valued at more than $20 million.”



House Ag Committee Chairman Mike Conaway (R., Tex.) penned a column earlier this week at Roll Call Online titled, “Trade Policies That Work for America’s Farmers and Ranchers.”



Reuters news reported earlier this week that, “A U.S. Environmental Protection Agency (EPA) request on Tuesday for comments from cellulosic biofuels makers raised speculation among industry analysts of further delays in the release of government-mandated renewable fuels volumes.

“The agency, which oversees the Renewable Fuel Standard (RFS) program, has asked for public comments before submitting a request to Office of Management and Budget regarding volume projections on cellulosic fuel production, according to a notice published on Tuesday in the Federal Register.

“The deadline for comments is May 26, the notice said.”

Keith Good

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