Washington Report

9/9/11

President Challenges Congress on Jobs; Most Points Heard Before

In a stem-winder of a speech, on September 8 President Obama told a joint session of Congress, “pass this bill now,” as he unveiled the broad strokes of his American Jobs Act, a plan for jumpstarting an economy that just won’t heat up. President Obama said all of his legislative proposals will be paid for, and challenged the Joint Special Committee on Deficit Reduction to find cuts in excess of the $1.5 trillion over the next decade now mandated. While some budget hawks in the GOP were skeptical of Obama’s focus on spending—the President never once used the term “economic stimulus”—House Republican leadership did not foreclose on the Obama plan, and House Speaker John Boehner (R, Ohio) said, “The proposals the president outlined tonight merit consideration. We hope he gives serious consideration to our ideas as well.” The main components of the bill—details won’t be available for another 10 days—were essentially proposals from both sides of the political aisle and nearly all have been proposed before. The highlights of the President’s plan include the following:

• Small business: Cutting payroll taxes by 50% for 98% of U.S. business on the first $5 million of payroll; a “tax holiday” for added workers or increased wages paid that will eliminate payroll taxes for companies which hire new workers or increase salaries for current workers, capped at $50 million in payroll increases; allow 100% expensing through 2012, and provide “reforms and regulatory reductions to help entrepreneurs and small business access capital.”
• Jobs: A hiring credit for veterans hiring, providing a tax credit of $5,600-9,600 for hiring unemployed veterans; providing $35 billion for assistance to keep 280,000 teachers on the job, with a similar program for police and firefighters; “modernizing” at least 35,000 public school buildings with new science labs and internet ready classrooms at cost of $25 billion; the bedrock of the bill is $50 billion in “immediate” funding to finance infrastructure spending on roads, rail, airports and waterways; rehabbing homes, businesses and communities by “leveraging capital” and creation of a $10-billion infrastructure bank, and other public-private collaborations;
• Unemployment insurance: Extend unemployment insurance for 5 million citizens, with work-based reforms and greater flexibility to the states to use the insurance; increased work sharing and job training programs; a $4,000 tax credit for hiring long-term unemployed workers, and a $5-billion new jobs program for low-income youth;
• Tax relief: Payroll taxes in 2012 would be cut 50% for 160 million workers by extending the existing payroll tax cut passed last year, yielding about $1,500 per family; increased mortgage refinancing opportunities are proposed for a $2,000 annual benefit. The President also reiterated his plan to go after federal tax breaks for the oil and gas industry and high-income U.S. citizens, but did not provide details.

House Agriculture Subcommittee to Hold September 14 Feed Availability Hearing; Ethanol Exports Hit Record in July

A hearing to examine how corn and other feedgrain prices, production, supplies and market competition affect feed availability and feed costs, and how those costs affect the feed and livestock industries will be held September 14 at 1:30 p.m. by the House Agriculture Committee’s subcommittee on livestock, dairy and poultry. In a related development, the Renewable Fuels Assn. (RFA) announced U.S. ethanol exports in July set a new monthly record, totaling 127.4 million gallons, topping the previous monthly record in April of 120.1 million gallons. Ethanol exports through July this year totaled 588.5 million gallons, according to numbers released the Energy Information Administration (EIA), more than was exported in 2009 and 2010 combined. RFA said ethanol producers are “forced to look at export markets as special interests and some policymakers are working overtime to prevent America from using more of its own renewable fuels,” adding “corn-ethanol is currently the lowest-cost motor fuel source in the world.” The House ag committee’s hearing will look at the impact of corn-based ethanol on feed availability, and the panel has invited witnesses from the American Feed Industry Association. (AFIA), the National Cattlemen’s Beef Assn. (NCBA), the National Pork Producers Council (NPPC), the National Chicken Council (NCC) and the National Turkey Federation (NTF) to provide testimony. It’s also expected at least one member of the House will testify about prospective legislation. The hearing will be broadcast through the committee’s on-line system and can be accessed by going to www.agriculture.house.gov.

Disaster Funding War Rages; Schumer, Gillibrand want Money for NY Farms

While the House continues to hold firm that any increase in federal disaster assistance spending must be offset by cuts in other programs, Senate homeland security appropriators this week increased FEMA funding to $47.8 billion, including $4.2 billion in new disaster money. Meanwhile, a separate Senate appropriations subcommittee wants to bump disaster funding by at least $6 billion, and Senate Majority Leader Harry Reid (D-Nev.) said he will pull sections from various FY2012 spending bills and move a separate disaster funding package with a price tag closer to the $6 billion. Sens. Chuck Schumer (D-N.Y.) and Kirsten Gillibrand (D-N.Y.) urged Senate appropriators to come up with emergency funding that does not require spending offsets to help Northeast farmers recover from the impact of Hurricane Irene through repair of cropland, stream beds and other property. Sen. Herb Kohl (D-Wis.), chair of the ag appropriations subcommittee, said the FY2012 ag/FDA spending bill approved by the full committee this week includes increases in USDA emergency conservation and emergency watershed protection funding. The ag appropriations money, while part of the coming year’s budget would be available to help USDA fund the backlog of emergency assistance requests, he said. For overall disaster spending the White House has requested a minimum of $5.2 billion more spending, and the Office of Management & Budget (OMB) said a minimum of $1.5 billion is needed to deal with uninsured losses from various natural disasters over the last 12 months. OMB said the debt ceiling deal reached in August, would allow the spending cap to be increased $11.3 billion to pay for disasters.

Obama Stuns Enviros by Killing Ozone Smog Rule

A pending EPA rulemaking to tighten Clean Air Act (CAA) standards for mercury, arsenic and carbon dioxide in the air—a rule identified as carrying an annual price tag in the tens of billions of dollars—was killed when President Obama instructed the Office of Management & Budget (OMB) to send the proposed regulation back to EPA for “reconsideration” as the White House “does not support finalizing the rule at this time.” The move enraged environmental groups who accused the White House of “caving in to big polluters.” It was no secret industry groups, including the U.S. Chamber of Commerce, identified the low-level ozone rulemaking as a jobs killer, and House GOP members said the White House move was proof “the GOP jobs push is working.” The ozone rule was one identified by both House Speaker John Boehner (R-OH) and President Obama as one of seven proposed rules carrying an annual economic impact of $1 billion, with the ground-level ozone standards carrying a potential cost burden of $19-90 billion; EPA arguing its benefit is $13-100 billion. President Obama, in announcing he was killing the ozone rule, said that with his commitment to “reducing regulatory burdens and regulatory uncertainty…I have requested that Administrator (Lisa) Jackson withdraw the draft Ozone National Ambient Air Quality Standard at this time.” He said work is underway to update a 2006 science review that will mean ozone standards update in 2013, and “ultimately I did not support asking state and local governments to begin implementing a new standard that will soon be reconsidered.” Said EPA’s Jackson: “We will revisit the ozone standard, in compliance with the Clean Air Act.”

FDA Enforcing Expanded Prior Notice on Imports

New regulations requiring expanded prior notification to FDA on imported food, feed and ingredients are now being enforced, FDA said this week. The Food Safety Modernization Act (FSMA) requires importers notify the agency if an imported ingredient, food or feed has been refused entry to any other country. The requirement is broadly an extension of an existing notification rule, but importers must now list specific countries where the shipment was refused.

Highway Bill to get Short-term Extension—Again

As lawmakers continue to argue over how to reauthorize long-term federal highway and urban commuter system spending programs—the bedrock of President Obama’s American Jobs Act—it appears the House is poised to allow another short-term extension of current programs. Not included in that deal, however, is an agreement on reauthorization of Federal Aviation Administration (FAA) funding. In the Senate, Sen. Barbara Boxer (D-Calif.), chair of the Senate Environment & Public Works Committee, got her committee this week to approve a four-month highway bill extension through voice vote and is hoping to get full Senate approval on the extension through unanimous consent. There is no identified opposition, but just one Senator can derail the effort and force cloture votes and procedural hurdles. If federal highway programs are allowed to expire, the White House says it would cost the U.S. Treasury $100 million a day and idle more than 4,000 workers. The President wants to “reform the way the money is spent,” and has recommended giving states more control over highway and commuter projects.

New Guest Worker Proposal Slammed

Rep. Lamar Smith (R-Texas) drew major criticism earlier this year when he introduced legislation to mandate companies use the federal on-line E-Verify system to check the citizenship status of existing and potential workers. At hearings where Smith heard heavy criticism from both ag and immigration lobbies, he said he’d help out where he could. This week, Smith introduced a new bill he says will make it easier to hire agriculture guest workers, but it appears he hasn’t appeased the aggies or the immigration reform folks. In a related event, Farmworker Justice, an advocacy group, released a report this week “showing the federal agricultural guest worker program is rife with abuse,” and said the report “illustrates the human toll of a flawed visa program.” Smith’s new legislation would rewrite the Labor Department’s H-2A guest worker visa program, turning it into an H-2C program that would be run by USDA. Smith would cap the number of visas issued at 500,000 a year, but workers would not be allowed to bring their families with them as is currently permitted. Employers would be required to pay prevailing wage rates rather than following a federally set wage schedule, and would allow companies to give housing vouchers and pay transportation costs, but only after workers had completed half of their contract time. Workers could only stay in the country 10 months, and legal aid groups would be restricted in suing employers on behalf of visa holders. However, agriculture interests say the new Smith bill doesn’t address the problem of keeping experienced ag workers in the U.S., and any new approach must legalize the status of workers who are working in the U.S. illegally. Immigration reform advocates say there are as many as 1 million unauthorized farm workers in the U.S., and “those workers aren’t going home.” A House Judiciary Committee hearing was set for this week to allow interest parties to voice their opinion of the Smith’s new visa proposal, and the guest worker bill and the E-Verify bill are expected to be marked up together in the next few weeks.

Syngenta GE Corn Hits Roadblocks Absent EU Approval

Cargill this week said it will not accept at its North American wet milling plants any of Syngenta’s genetically enhanced Agrisure Viptera corn until the new variety has been approved by the European Union (EU). And while ADM said it will only accept grains approved for commercial use in the EU, Bunge Ltd has already announced it will not take the new corn variety until it sees overseas approvals, particularly in China. Cargill reiterated its right to accept or restrict products of agriculture biotechnology based on the approval status in export markets and the needs of its customers. “At this point, we have posted signs at our grain elevators stating the Viptera trait is not approved in all major export markets and that our grain elevators cannot accept this product unless notified in writing prior to delivery, to allow Cargill the time and flexibility to try and find appropriate markets,” Cargill said. The Syngenta variety represents less than 2% of the corn market, and the company said it’s looking at ethanol as a “suitable outlet” for the Viptera corn.

USGS Says “Roundup” Found in Rivers, Rain, Air

Two studies, including one by the U.S. Geological Survey (USGS) says glyphosate—known generically as Monsanto Corp.’s Roundup—has been found in soil, rivers, rain and in the air throughout rural areas in the Mississippi River watershed, a finding Monsanto says is “neither alarming nor unexpected.” The USGS survey, part of an effort going back to the 1980s to monitor herbicides in the Midwest, found Roundup in surface waters, rain and in the air in areas where it’s heavily used. Roundup is the most widely used herbicide in the world, used in almost all agriculture and urban areas with greatest application in the Mississippi River basin, said USGS, but little is known about its long-term effects on the environment. The USGS study said glyphosate is detected throughout the growing season, but is generally not found during other times of the year. Monsanto said Roundup is one of the most extensively studied herbicides in the world and studies accepted by regulatory agencies globally show it does not cause cancer, birth defects, mutagenic effects or other reproductive problems. The company said it’s reviewing the studies, adding the reported levels are “much less than EPA’s standard for glysophate in drinking water.