Washington Report for 10-21-13

By Steve Kopperud

Congress Votes to Reopen Government, Raise Debt Ceiling, Ensure ACA Premium Subsidy Eligibility, Hike Olmsted Dam Budget, Block Chicken Rules, Up Disaster Funds

Within hours of Senate Majority Leader Harry Reid (D-Nev.) and minority leader Sen. Mitch McConnell (R-Ky.) announcing October 16 they’d reached a deal to extend the continuing resolution (CR) at FY2013 levels through Jan. 15, 2014, and raise the federal debt ceiling through Feb. 7, both chambers approved the legislation and it was on its way to the President’s desk. President Obama promptly signed the bill early Oct. 17, ending a 16-day federal government shutdown and avoiding loss of the Treasury’s borrowing authority.

The Senate approved the legislation 81-18; the House followed by approving the bill 285-144. All House Democrats voted “aye,” joined by 87 Republicans; 144 Republicans voted “no.” The Senate will not return to Washington, D.C., until the week of Oct. 28 to make up for its missed Columbus Day recess; the House remains in session.

At one point, the Senate package seemed to be in jeopardy as House Speaker John Boehner (R-Ohio) said his chamber would craft its own package. However, after two different versions, both which drew opposition from Reid and President Obama, were unable to garner the votes to pass, Boehner agreed to bring the Senate package to the floor, urging his colleagues to vote for it.

The deal, which delays solving the two fiscal dilemmas for a few months, allows the Treasury Department to use “extraordinary borrowing authority” if Congress does not increase the debt ceiling by the February date. The deal also requires the House and Senate to name conferees to reconcile their respective FY2014 budget resolutions, with a deadline of Dec. 13 to report back to the full Congress.

In a concession to Republicans seeking to use the fiscal fix as a means of defunding or delaying the Affordable Care Act, the package includes a provision requiring the Department of Health & Human Services to certify to Congress that individuals applying for health insurance premium subsidies through health care exchanges are eligible before the subsidies are granted in 2014.  The HHS secretary must submit a report to Congress by Jan. 1, on how she will verify eligibility, with a separate report to Congress by the HHS inspector general on the effectiveness of the fraud prevention process due by July 1.

Raising the hackles among some fiscal conservatives was language in the package adding $2 billion to a budget of about $1 billion to complete the Olmsted lock and dam project on the Ohio River between Kentucky and Illinois. The Waterways Council, Inc., a group representing commercial interests which rely upon the inland waterway system, said it was pleased with the increase in spending to allow the project to be completed. In a post-Senate vote press conference, Reid denied the money was an earmark, saying it was a move to save the government money. “Had we not done this so-called ‘anomaly,’ the Corps of Engineers would have had to spend before the last day of December $80 million to stop the project,” Reid said, adding the project has been ongoing since 1988. Similar language has been included in the President’s budget request and in appropriations bills in both the House and Senate. 

Another controversial section of the bill blocks U.S. Department of Agriculture rules designed to assist individual farmers when they negotiate contracts with poultry companies. The language was denounced by several groups, including the National Farmers Union and the Campaign for Contract Agriculture Reform, who said the relationship between farmers and poultry companies is “unbalanced” and the rules assure fairness. Going back to the 2008 Farm Bill – which USDA said compelled it to write the new rules – poultry industry groups say USDA went beyond its authority and the intent of Congress in writing the rules. The language effectively shifts the battle over contracting to the Farm Bill, about to go into conference committee action, and generated a letter this week from eight Senators that voiced their objection to striking the farmer protection language.

Lastly, the package provides up to $636 million to USDA to fight wildfires if it runs out of existing monies, and allows up to $450 million in emergency relief spending for states dealing with natural disasters, above and beyond a $100-million cap. The widow of Sen. Frank Lautenberg (D-N.J.) was provided $174,000 in the bill, according to reports. 

Most Government Reports Missed During Shutdown will not be Published

Regularly scheduled reporting by various federal agencies and departments suspended during the 16-day government shutdown will not be issued because the various agencies were not able to collect and analyze data. 

The .S. Department of Agriculture said it has decided the Crop Production and Cotton Ginnings reports that were to be released Oct. 11 are cancelled. New reports will be issued during the regular schedule on Nov. 8. The Oct. 7 and Oct. 15 Crop Progress reports are also cancelled, and the Oct. 18 Cattle on Feed report is postponed. 

Farm Bill Roundup

With the continuing resolution, the debt ceiling and the FY2014 budget resolution hurdles temporarily overcome, attention turns to the Farm Bill conference committee. The Congressional Research Service reported the Senate bill reduces Farm Bill spending by about $18 billion; the House bill, with its new “nutrition title,” reduces overall spending by $52 billion over 10 years. Here’s a digest of recent developments:

House Names Conferees; Lucas to Chair full Conference – House leadership named its conferees to the Farm Bill. At the same time, it was announced House Agriculture Committee Chairman Frank Lucas (R- Okla.) will chair the overall conference action because the 2008 Farm Bill conference was chaired by the Senate. GOP conferees will be led by Lucas and will include the following committee members: Reps. Michael Conaway (R-Texas), Rick Crawford (R-Ariz.), Steve King (R-Iowa), Randy Neugebauer (R-Texas), Austin Scott (R-Ga.), Glenn Thompson (R-Pa.), Mike Rogers (R-Ala.), Martha Roby (R-Ala.), Kristi Noem (R-S.D.), Rodney Davis (R-Ill.) and Jeff Denham (R-Calif.). Non-ag committee conferees are Reps. Steve Southerland (R-Fla.), leadership conferee; Ed Royce (R-Calif.), Foreign Affairs Committee; Tom Marino (R-Pa.), Foreign Affairs Committee; Dave Camp, chairman, Ways & Means Committee; and Sam Johnson (R-Texas), Ways & Means Committee.

Democrat conferees will be led by committee ranking member Rep. Collin Peterson (D-Minn.), and members are Reps. Marcia Fudge (D-Ohio), leadership conferee and chairwoman of the Congressional Black Caucus; Mike McIntyre (D-N.C.); Jim Costa (D-Calif.); Tim Waltz (D-Minn.); Kurt Schrader (D-Ore.); Jim McGovern (D-Mass.); Suzan Delbene (D-Wash.); Filemon Vela (D-Texas) and Gloria Negrete McLeod (D-Calif.). Also named by the Democrats are Reps. Eliot Engel (D-N.Y.), Foreign Affairs Committee, and Sander Levin (D-Mich.), ranking member, Ways & Means Committee.

Farm Bill Conference Kicks Off Oct. 28 – Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) told reporters she expects the House-Senate Farm Bill conference committee to begin its formal work the week of Oct. 28 when the Senate returns from a week-long recess. After a meeting of the four respective committee leaders, House Agriculture Committee Chairman Frank Lucas (R-Okla.) confirmed conference “begins when schedules coincide.” Meanwhile, staff has been meeting over the last several weeks to ensure the conference moves smoothly and the majority of time can be focused on the commodity, nutrition and crop insurance titles. The Michigan lawmaker also said it’s “possible” once the conference committee completes its work that the Farm Bill could be added to a budget bill agreement expected in December, but the uncertainty of the budget process is the biggest concern. Stabenow has said the approximately $20 billion in savings her bill provides over 10 years is the kind of bipartisan action budget conferees will look to. The House bill, while technically reducing overall spending by $52 billion over a decade, hits that mark only because it includes $40 billion in spending cuts to federal nutrition programs merged into the House Farm Bill. That level of cuts is not likely to survive conference action. Stabenow, a member of the Senate Budget Committee, will be conferee on the conference committee created by the fiscal fix package just signed by the President, as well as the top Democrat on the Farm Bill conference.

Groups Waste No Time Getting Preferences to Conferees – The American Soybean Association “welcomed” Farm Bill conferees and urged cooperation between the House and Senate. The American Farm Bureau Federation and the National Farmers Union both sent detailed letters to the conferees listing their priorities. For AFBF, the list begins with a “strong and affordable” crop insurance program, followed by allowing producers a choice of income safety net options. For NFU, the list begins with a call to preserve permanent farm law – AFBF agrees – but includes possible NFU opposition if laws passed from 1938-1949 are not preserved. AFBF supports language in the House bill by Rep. Steve King (R-Iowa) that prohibits states from passing laws that inhibit interstate movement of ag products; NFU opposes the language. Both call for reauthorization and mandatory funding for all livestock disaster programs. Similar letters went up over the last two weeks from most major commodity groups, “family farm” groups, and several environmental and consumer groups.

Crop Insurance Tussles Begin – With the Senate Farm Bill carrying language that means tests federal crop insurance premium subsidies – i.e. 20,000 of the nation’s wealthiest farmers, adjusted gross income more than $750,000 a year – see their premium subsidy drop from 62 percent to 47 percent, and the House passing a nonbinding “sense of the House” resolution by House Budget Committee Chairman Paul Ryan (R-Wis.) supporting the means test, the battle over premium subsidies is on. A letter that was sent to the full House in advance of the Ryan vote by 46 national ag producer and input groups urged all members to reject the means test resolution because “it undermines strong crop insurance protection.” On one side of this tug-of-war is the Environmental Working Group leading a coalition of mainly non-ag groups who want to see the premium subsidy pared back or eliminated altogether. On the other are traditional farm groups and their champions who contend means testing the premium subsidy program is discriminatory – “it penalizes success” – will weaken the overall crop insurance program by cutting participation and putting more risk on smaller producers. However, in the rush to find as much overall budget savings in the final Farm Bill as possible, some reductions in crop insurance costs may be inevitable. Critics of the crop insurance program contend it is now the most expensive “farm aid” program at $14 billion in 2012; President Obama recommended cutting the program by $12 billion over 10 years in his last budget request. Also up for debate will be a Senate provision calling for conservation program participation to qualify for crop insurance benefits; the House does not include the same cross compliance language.

Dairy Dueling Begins – A flurry of letters from various parts of the dairy industry flew to Capitol Hill signaling the dairy title could become more contentious that previously thought. A group of major dairy processing companies sent a letter to Sen. Debbie Stabenow (D-Mich.) calling on her to support language removing any milk supply management program. The Senate bill contains what’s called the Dairy Market Stabilization Program. Farmers would be required to enter the production control program as a condition of participating in a dairy margin insurance program. The margin insurance/production control program was developed by the National Milk Producers Federation and replaces a laundry list of current dairy income supports. While championed by Rep. Collin Peterson (D-Minn.), ranking member of the House ag panel, the production control language was stripped from the House bill during floor action. Peterson said he and House Speaker John Boehner (R-Ohio) are in a “knock-down, drag-out war” over dairy provisions, with Peterson accusing Boehner of having increased the number of House conferees simply to get the votes to kill the DSMP, once referred to by the Speaker as a “soviet-style” program. The processors call the DMSP provision “government interference” in the milk supply. The dairy companies were supported by another letter from state and regional food processing and grocery groups. However, the processor/food industry opposition was directly challenged by a 56-member coalition of dairy cooperatives and state and national dairy producer groups who sent a letter coming out strongly in support of the Senate Farm Bill dairy provisions, including DMSP. They refer to the supply control portion of the bill as “market stabilization,” and took on the processors’ letter, reminding conferees that processors “receive 70 percent of the amount consumers pay for dairy products.” Without the stabilization program, they say, prices could plummet on overproduction, hurting farmers more than processors.

House to Take Up Water Bill This Week

Action suspended during House and Senate work on fiscal matters, House Majority Leader Eric Cantor (R-Va.) said the House will take to the floor this week its version of the Water Resources Reform & Development Act that funds harbors and inland waterway projects. 

The bill is generally considered noncontroversial as it streamlines project approval processes, saves money and contains no special interest earmarks, said House Transportation & Infrastructure Committee Chairman Bill Shuster (R-Pa.).

The Senate passed its version in May. The biggest difference in the two bills is the House bill requires congressional approval for water projects, while the Senate bill leaves that discretion to the administration.

High Court to Review EPA Emissions Permitting Process; Lets Stand EPA Authority

The U.S. Supreme Court said it will not review whether the Environmental Protection Agency has the authority to regulate greenhouse gas emissions as a human health risk, but will review whether agency actions to control those emissions under its permitting programs for the automobile and utility industries are valid.

The high court decision on nine separate industry petitions for review of overall EPA authority is a blow to those who contend EPA’s action to control greenhouse gas under its Clean Air Act “endangerment finding” are beyond the authority of the agency. However, both sides of the greenhouse gas question claimed victory.

The one question the court will hear – actually the consolidation of 15 separate issues – focuses on the vehicle industry, and goes to whether EPA has the authority to require preconstruction permitting for stationary sources under the CAA. 

Sources said even if the court sides with industry, it won’t affect EPA’s current actions relative to permitting new utility plants. 

“Leaked” EPA 2014 RFS Options Not Final

“Leaked” reports that the Environmental Protection Agency floated to industry its revised FY2014 Renewable Fuel Standard were assailed by the administration and the biofuels industry who said nothing is final at EPA as it reviews options on RFS levels next year for various biofuels. 

Media reports indicated the agency was considering an overall mandate of 15.2 billion gallons, less than half of the current overall blend mandate. That includes 13 billion gallons of corn-based ethanol, 2.2 billion of advanced biofuels (biodiesel) and 23 million gallons of cellulosic ethanol. EPA has said over time it is considering as an option reducing the RFS broadly because of concerns the gasoline industry has over hitting the so-called blend wall, that point at which the amount of biofuels available does not meet the RFS requirements. 

EPA Administrator Gina McCarthy told Bloomberg late last Friday, “At this point, EPA is only developing a draft proposal. The Obama Administration remains firmly committed to furthering the development of all biofuels.”

“The 2014 … rulemaking process is not final and we’re not going to comment on an unverified ‘draft’ document’,” said Growth Energy CEO Tom Buis in a statement shortly after the “options” reports surfaced. Growth Energy has called on the Obama Administration to investigate the leak of “unverified draft documents."

Buis was echoed by Secretary of Agriculture Tom Vilsack who restated the administration’s support for biofuels, and said the EPA, “… is currently developing its draft proposal and has not yet reached a final decision regarding that proposal, and will not do so until all stakeholders have had the opportunity to comment and to provide input on what is required for this industry, and the rural communities who depend on it, to continue to thrive.”

Washington State Sues GMA over GMO Label Battle Finance Reporting

The Washington State attorney general sued the Grocery Manufacturers Association, alleging GMA violated state campaign finance laws by illegally collecting and spending – without reporting the identities of contributors – nearly $7 million to defeat a November ballot initiative to require labeling of genetically modified (GM) foods.

Defeat of the Nov. 5 ballot question has been a major goal of GMA, along with several of its member food industry companies. The ballot item would require labeling of foods containing GM ingredients from crops, as well labeling of seeds and seed products sold in the state of Washington. Media reports indicate supporters of ballot item I-522 have raised $5.5 million and have spent $5.4 million; opponents have reportedly raised more than $17 million and have spent about $13 million. 

At issue is GMA’s status as the largest donor to the “No on I-522” campaign, and the creation of a GMA internal “defense of brands strategic account.” Companies reportedly pay an assessment to the account to be used to oppose labeling initiatives, and the Washington attorney general said GMA hides the names of those companies paying into the GMA account. 

GMA said it takes care to comply with all state laws and regulations regarding election and campaign financing. It said it will review the suit and cooperate with state authorities. The attorney general’s office said it’s seeking a temporary restraining order to force GMA to comply with state disclosure laws and will seek civil penalties.