Washington Report

10-13-2011

Ag Panels to Recommend $23 Billion in Cuts for Super Deficit Committee Action

Reports circulating late this week indicate the House and Senate Agriculture Committees will jointly recommend about $23 billion in bipartisan spending cuts over the next 10 years to the Joint Special Committee on Deficit Reduction. The figure is about 30% less than the approximately $30 billion in spending cuts pushed by House Budget Committee Chair Paul Ryan (R, WI) and President Obama’s $33 billion in recommended reductions.  Senate Agriculture Committee Chair Debbie Stabenow (D, MI) and House Agriculture Committee Chair Frank Lucas (R, OK) huddled with Sen. Kent Conrad (D, ND), chair of the Senate Budget Committee, a member of the ag panel and a farm program veteran, and while details of the cuts are not available yet, there’s little chance the ag panel chairs could have found the $23 billion without significant cuts or elimination of direct farm program payments, ACRE and countercyclical payments.  As one farm group insider put it, “Record farm income – expected to jump another 30% this year – means no has sympathy for farm program payments.” The ag committees are responding to a legislative deadline for submission to the supper committee of recommendations on program cuts for areas under their jurisdiction.

FTAs, TAA Reauthorization Passed by Congress, Obama to Sign

U.S. bilateral free trade agreements with Panama, Colombia and South Korea – all negotiated by President Bush at least five years ago – were enacted by Congress this week and President Obama is expected to sign them immediately upon receipt.  Also passed and expected to receive a quick White House signature is legislation reauthorizing and expanding Trade Adjustment Assistance (TAA), a program under which U.S. workers negatively impacted by foreign trade pacts receive retraining, wage and health insurance assistance from the federal government. The TAA bills also carried renewal of the General System of Preferences (GSP), allowing U.S. manufacturers and retailers duty-free access to products and ingredients. The incentive behind quick action this week on both sets of legislation boiled down to jobs creation.  Both the White House and congressional Republicans were quick to claim enactment of the three trade deals will create thousands of new jobs as U.S. annual exports to the three nations are expected to jump $13 billion, with $3 billion benefiting agriculture. Opponents of the trade deals said they will cost the U.S. jobs.  Once ratified, the Colombia deal means about 75% of U.S. goods will trade tariff-free immediately; the Panama deal immediately wipes out almost 90% of import tariffs, and the Korean trade pact – the biggest U.S. bilateral since the North American Free Trade Agreement – will wipe out tariffs on about 95% of U.S. goods within the first five years.  The American Farm Bureau Federation (AFBF) estimates the Korean deal will boost exports for all U.S. ag products by about $1.8 billion annually, and the cumulative benefit of the three treaties is about $3 billion a year.  The National Cattlemen’s Beef Assn. (NCBA) expects its $850 million in exports to Korea to double to about $1.8 billion a year; the National Pork Producers Council (NPPC) estimates all three deals mean an increase in exports of about $772 million, and the poultry industry expects exports to increase $102 million a year.

Ag Tell Super Committee to Put a Hold on “Discretionary” Regulation; NFU Disagrees

A coalition of 78 agriculture and food organizations sent a letter to the Joint Special Committee on Deficit Reduction this week, along with the chairs and ranking members of the agriculture committees, urging them to impose a two-year moratorium on “all discretionary, non-essential regulation that would increase the cost of food and agriculture production and processing.” The National Farmers Union (NFU) immediately released a statement opposing the action, urging the super committee and the House and Senate ag panels to reject the request, saying it would “damage the ability of the federal government…to react to problems within the agriculture industry.”  The ag coalition told the super committee that the Obama Administration’s heavy regulatory approach to industry is threatening industry’s ability to be productive, and key to continuing the industry’s ability to produce “safe, abundant and affordable food” is federal policy that avoids or minimizes cost increases that hit farmers, ranchers and agribusiness across the U.S.”  NFU countered the two-year moratorium would “in particular…stop the Grain Inspection, Packers and Stockyards Administration (GIPSA) rule from moving forward…the GIPSA rule is absolutely necessary to stop the concentration of the livestock industry.” 

EPA News

Jackson’s Denial of “Dust” Regulation Doesn’t Satisfy Johanns

Following a trust-but-verify strategy, former secretary of agriculture Sen. Mike Johanns (R, NE) this week said EPA Administrator Lisa Jackson’s denial her agency intends to regulate farm dust as part of a proposed rule on air particulates is good to hear, but he intends to move forward with legislation that would stop Jackson from changing her mind for at least a year.  Johanns has legislation that would prohibit EPA from making any revision to the Clean Air Act (CAA) air particulate standards for one year, and he’s been shopping for a legislative vehicle to move the action.  Johanns tried to offer his language as an amendment to a China currency bill on the Senate floor this week, but was blocked by Senate Majority Harry Reid (D, NV) who nixed consideration of the language.  In the House, a similar measure introduced by Rep. Kristi Noem (R, SD) and supported by 107 colleagues will get a hearing in the Energy & Commerce Committee on October 25. House Majority Leader Eric Cantor (R, VA) identified the Noem bill as part of a legislative agenda for action this fall.  

Boiler, Cement Rule Bill Passed by House 

The House GOP regulatory overturn juggernaut continued this week with full House passage of a bill to delay EPA from issuing regulations for boilers, solid-waste incinerators and “process heaters.” In a related development, the House late last week passed a bill to stop EPA from writing new rules to regulate cement plants, instructs EPA to rewrite the rules and allows several years for regulated industry compliance.  The boiler bill forces EPA to repropose the rules, finalize the rule 15 months later, and give regulated industry five years to comply.  EPA would also be required to consider the cost/benefit of the rules, as well as health and non-air environmental impacts and the rules’ impact on jobs.  EPA previously announced it was delaying the rulemaking until at least April, 2012. 

Corn Crop Reduced, Bigger 2012 Supplies Seen

USDA this week said the 2011 corn crop will be about 0.5% smaller than expected at 12.43 billion bushels, down 64 million bushels from the department’s prediction last month, but still the fourth largest on record. However, the department said reduced production will be offset by projected corn stocks at 866 million bushels, up nearly 30% from previous projections, but still the lowest since 1996. The higher stocks figured worked to reduce corn prices lately, with December futures hovering in the $6/bu. range, down from the $8-10/bu. earlier this fall.

DOT Says U.S.-Mexico Truck Deal is Legal

The U.S-Mexico cross-border trucking agreement pilot program, recently renegotiated under NAFTA requirements, will have the necessary federal mechanism to ensure Mexican truckers comply with federal safety laws, the Department of Transportation (DOT) said this week.  The two governments agreed in July to restart the cross-border trucking program under which U.S. and Mexican trucking companies have greater access to each others’ territories as long as they meet all respective national driver training, safety and vehicle insurance requirements.  In August, Congress asked DOT’s Office of Inspector General (OIG) to determine if DOT had taken the necessary steps to ensure Mexican trucks were complying with U.S. safety laws, and OIG this month said the Federal Motor Carrier Safety Administration (FMCSA) has met all of its recommendations for enhancing safety oversight.

House GOP Leaders Vow to Oppose HOS Rule Proposals

An Obama Administration proposal to change commercial drivers’ hours of service (HOS) regulations elicited a letter from House Speaker John Boehner (R, OH) and House Majority Leader Eric Cantor (R, VA) urging the President to rescind the proposal and leave the current HOS rules in place.  Boehner, in keeping with his regulatory cost/benefit priority on all Obama Administration rulemakings, said the proposed rule would cost the U.S. economy more than $1 billion a year “affecting every business shipping and receiving goods.”