Washington Report

7/21/11

Debt Limit Discussions Continue

With less than two weeks to go until the Aug. 2 deadline, the White House and congressional leaders continue to discuss raising the debt limit and deficit reduction proposals.  There are essentially three tracks to resolve the debt-ceiling standoff.  One track is McConnell-Reid, the ongoing negotiations between the Senate Majority Leader and Senate Minority Leader to pass a “failsafe” debt ceiling increase without majorities of Congress having to approve it. The second track is the talks between President Obama and Speaker of the House John Boehner (R, OH) and Majority Leader Eric Cantor (R, VA), as they try to revive a “grand bargain” (reports as of Thursday afternoon indicate this may be the horse to bet on.)  And the third track is a second grand-bargain-style deal -- this one by the bipartisan Gang of Six in the Senate.

 “Right now, there are multiple trains heading towards the station, and we have to decide,” White House Press Secretary Jay Carney said Wednesday. “And some of them may continue up to the last moment, because we need to be sure that that failsafe option is there even as we pursue, aggressively, the possibility of doing something bigger.”  

 Peterson Endorses Gang of Six plan

House Agriculture Committee ranking member Collin Peterson (D, MN) endorsed the bipartisan 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.  The Gang of Six proposal became public following the news that Sen. Tom Coburn (R, OK) had rejoined the group. It would cut agriculture spending by $11 billion over 10 years, but protect food stamps and allow the Agriculture committees to decide how to make the cuts.

 The proposal is a two-step legislative process.  The $500 billion initial down payment would impose statutory caps on security and nonsecurity discretionary spending through 2015 and make other cuts, while the second step would include the $11 billion in agriculture cuts.

 One key farm lobbyist said that 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, WI) 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, MI) has said 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 other members of the Gang of Six are Senate Minority Leader Dick Durbin (D, IL), Senate Budget Committee Chairman Kent Conrad (D, ND), and Sens. Mark Warner (D, VA), Mike Crapo (R, ID) and Saxby Chambliss (R, GA).  Conrad and Chambliss worked together closely on the 2008 farm bill and presumably helped protect agriculture.

Meanwhile, 34 agriculture and agribusiness groups, including the National Cotton Council, sent President Obama and House and Senate leaders a letter seeking prompt action on the debt ceiling/deficit reduction negotiations that does not require disproportionate cuts in agriculture and related programs, the cotton council said in a news release.

 “(A)griculture is prepared to take a proportionate share of budget cuts provided everything is on the table,” the group’s letter said. “Last year, agriculture absorbed a net $6 billion reduction, according to the Congressional Budget Office, thus making it clear we have and will do our part to help with spending and deficit control. In this time of economic uncertainty and weather-related disasters, the farm bill provides safeguards for farmers and ranchers to consistently provide a safe and stable food supply.”

 (The Hagstrom Report and Agri-Pulse contributed to this report.)

Tea Party Jam: A Vote Against EPA Funds Would Obviate Policy Riders

The anger that many House Republicans direct at the Environmental Protection Agency (EPA) threatens to complicate efforts to pass a spending bill for the agency that includes policy provisions that would roll back its authority.  Some of the more conservative GOP members argue that the Fiscal Year 2012 Interior-Environment Appropriations bill would not cut enough funds from the EPA, which they say oversteps its authority through regulations that hurt the economy. They want a separate vote on the section of the bill that covers the EPA — therefore allowing conservatives, including members of the Tea Party Caucus, to vote against the spending on the agency.  But defeating the EPA funding also would wipe out policy riders, which many of those same conservative Republicans have championed, that are intended to curtail the agency’s powers.  The measure may be considered as early as next week.

New Measure Would Stretch Timeline for EPA to Write Boiler Pollution Rules

The Environmental Protection Agency (EPA) would have more time to write rules on hazardous air pollution from industrial facilities under bipartisan Senate legislation introduced Wednesday.  This legislation also serves to give refineries, chemical plants and other polluters longer to comply with new standards. Sens. Susan Collins (R, ME), Ron Wyden (D,OR), Lamar Alexander (R,TN), Mary Landrieu (D, LA), Mark Pryor (D, AR), and Pat Toomey (R, PA) introduced S. 1392, legislation that would allow EPA the time it has said it needs to adequately consider new boiler maximum achievable control technology (MACT) rules.

Specifically, this bipartisan legislation would:
• Give EPA 15 months from the bill's date of enactment to re-propose and finalize the Boiler MACT regulations.
• Extend compliance deadlines from three years to at least five years which would allow facilities adequate time to comply with the new standards and install necessary equipment.
• Clarify that renewable and carbon-neutral materials remain classified as fuel and not solid waste.
• Direct EPA to ensure that the new rules are achievable by real-world boilers, process heaters, and incinerators, and impose the least burdensome regulator alternatives consistent with the President's Executive Order.

The draft bill would put an end to a lengthy legal battle over EPA efforts to regulate mercury, soot and other pollution emitted by industrial boilers and furnaces under the 1990 Clean Air Act.  The regulation at the center of the debate would set standards for more than 200,000 boilers and incinerators nationwide that are a major source of pollution. Finalized by EPA in February to comply with a court-ordered deadline, the rules were subsequently put on hold after industry and lawmakers criticized them as overly prescriptive and costly.

Environmental lobbyists condemned the bill’s extended deadlines, arguing that tougher pollution mandates are needed to prevent thousands of premature deaths, heart attacks and breathing illnesses.  The environmental groups also oppose the timber industry provisions. A group of 27 agriculture and business groups sent a letter to Capitol Hill in support of the measure.

Although EPA has acknowledged the regulations need to be revised, agency officials say they are working closely with industry to streamline the regulations and argued that no legislation is necessary.  The agency states it is on target to meet an October deadline for releasing a proposed version of the rule and to finalize the measure in April 2012.

CFTC Commissioner Confirmation Hearing in Senate Agriculture Committee

 On the one-year anniversary of the passage of the Dodd-Frank financial reform legislation, Committee Chair Debbie Stabenow (R, MI) convened her panel Thursday to hear testimony from Mark Wetjen, President Obama’s nominee to replace outgoing Commodity Futures Trading Commission (CFTC) Commissioner Mike Dunn.  Senate Majority Leader Harry Reid (D, NV) provided the ceremonial introduction of the nominee to the Committee, noting that Wetjen has worked for him for seven years and was deeply involved in the Senate’s consideration and approval of the legislation.

In his testimony, Wetjen highlighted his families’ Iowa roots and time spent on his grandfather’s corn, soy bean and hog farming operation.  Stabenow, along with Ranking Republican Pat Roberts (R, KS), asked several questions that focused on Wetjen’s ability to “get up to speed” to join the CFTC as it works to finalize the 40-plus proposed rules it has issued relative to implementation of the reforms.  In response, Wetjen noted that he had closely followed the Commission’s rulemaking activities as part of his duties to the Majority Leader and was well versed on Congress’ intent when the legislation was crafted.  In response to a Roberts’ question, he further committed to the panel that if confirmed, he would ensure he fully understood the ramifications and potential unintended consequences of any final CFTC regulation being considered.

 When the hearing concluded, Stabenow said she and Roberts would work together to determine when the Committee would meet to vote on Wetjen’s nomination, and gave senators until Monday, July 25, to submit any additional questions for the nominee.  Once the Committee has received responses to the written questions, it likely will move quickly with a favorable vote.  However, given the storm of “which side blinks first” political battles on a number of key issues, particularly the budget and appropriations measures, a vote by the full Senate on his nomination will likely take some time.  In light of CFTC Chairman Gary Gensler’s commitment to complete Dodd-Frank rulemaking by the end of the year, Wetjen may have little opportunity to exert much influence on the final regulations.