Washington Report for 11-11-13

By Steve Kopperud

Farm Bill Conference Nearing Crunch Time; Spending Caps Needed

With optimistic statements about the Farm Bill being ready for floor action by Thanksgiving, that means this week is critical to getting the whole package wrapped up. However, Farm Bill experts both in and outside of Congress contend that to reach that goal – and avoid the possibility of the Farm Bill getting rolled into a hoped-for budget package – congressional budgeteers need to tell conferees how much money they can spend.

Budget conferees are hip deep in trying to resolve the overall differences between the House and Senate budget resolutions, but former Rep. Charlie Stenholm (D-Texas), a veteran House Agriculture Committee member and now a policy consultant in Washington, D.C., told an audience the Farm Bill conferees don’t need a final budget deal; they need the budget conference to agree on an agriculture spending cap.

Food stamps, commodity program, crop insurance and other differences aside, the Farm Bill conferees are facing a very tight – and rapidly narrowing – window of opportunity to finish their work. Both chambers will be in session as of Nov. 12, but are expected to leave for a two-week Thanksgiving recess on Nov.22. They return on Dec. 9 for two weeks, leaving Dec. 20 for Christmas, not to return until Jan. 6. 

That spending cap provides political and practical cover for the Farm Bill conferees. The Senate Farm Bill currently carries a $955-billion price tag, and achieves savings of around $18 billion over 10 years; the House bill costs $921 billion, but with a $40-billion cut to food stamps, is scored at saving about $51 billion over a decade.

Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) confirmed the need for Congressional Budget Office scores on various proposals to reconcile the two bills, and allowed a budget spending cap would help. She also confirmed she and House ag panel Chairman Frank Lucas (R-Okla.), along with Sen. Thad Cochran (R-Miss.) and Rep. Collin Peterson (D-Minn.), the committees’ ranking members, had a two-hour face-to-face meeting and things are “getting down to the nitty gritty.”

Still in play is whether the Farm Bill will get rolled into any budget conference agreement. Stabenow, who sits as a budget conferee, says it’s possible, depending on the timing of both packages, but holds strongly the ag committees will write the Farm Bill. Peterson opposes the inclusion of the ag package in the budget agreement, saying all that does is kill direct payments, but could also jeopardize the budget package.

Farm Bill Conference Items

Senators Want Broader Crop Insurance – Thirteen Senators sent a letter to Farm Bill conferees asking they support broadening crop insurance availability and eligibility to assure specialty crop, organic, highly diversified and young/beginning farmers have access to coverage. They specifically support Senate Farm Bill language that would create a “whole farm insurance/revenue” product. They also want to see premium and term equity between organic and conventional crop insurance policyholders.

Stakeholders Want Mandatory Energy Funding – More than 130 groups, including the Renewable Fuels Association and the Wind Energy Association, sent a letter to Farm Bill conferees supporting a five-year Farm Bill that includes an energy title blessed with $900 million in mandatory funding. The Senate bill echoes that call; the House bill authorizes $1.25 billion in energy spending, but makes it discretionary. The stakeholders say the renewable energy industry is on the cusp of major breakthroughs and ensuring adequate government funding to assist over the next five years is critical.

Lucas Flips on Dairy Supply Controls – House Agriculture Committee Chairman Frank Lucas (R-Okla.) is reported to have reversed himself and now opposes milk production controls as part of the Farm Bill’s rewrite of dairy industry support programs. The House Farm Bill carried a feed margin insurance product with production controls as a replacement for current federal dairy support programs, but the production control language was removed on the House floor. Lucas says the battle to regain that supply control language is between ag panel ranking member Rep. Collin Peterson (D-Minn.) and House Speaker John Boehner (R-Ohio), who’s called the Peterson dairy language a “soviet-style” system. Peterson says if he doesn’t get the supply control language, he’ll push to reinstate the Milk Income Loss Contract at 2008 rates.

EWG Again Outs ‘Billionaires’ Receiving Crop Payments

About $11.3 million in federal crop program payments were paid to “50 billionaires or corporations” from 1995-2012, the Environmental Working Group reported. The numbers come from a unique database created by EWG several years back that incorporates all U.S. Department of Agriculture data on farm program payments, who receives them and how much individuals and companies receive. The data was accumulated using the Freedom of Information Act.

The group released the report – which can be found at www.ewg.org – while the Farm Bill is in conference committee as a way to oppose any food stamp cuts by contrasting the billions proposed to be cut over 10 years from the Supplemental Nutrition Assistance Program with the millions in farm program payments received by non-farmers.

Forbes Magazine, which produces the annual Forbes 400 list of richest Americans, reported those who received farm program payments enjoy a combined net worth of about $315 billion. Billionaires and companies identified in the EWG report include Kaiser-Francis Oil Company; Paul G. Allen, co-founder of Microsoft; S. Truett Cathy, owner of Chik-fil-A; and Charles Schwab, founder the investment firm that bears his name, according to a report in the New York Times. EWG said its numbers are probably low because they do not include the names or payments to individuals receiving federal crop insurance premium subsidies on top of the direct farm program payments because the crop insurance law protects those identities.

CFTC Revises Speculative Position Limit Rule; Chilton Announces Departure

An industry and consumer group coalition praised action by the Commodity Futures Trading Commission to again revise its 2011 rules on speculative position limits in futures and swaps transactions for 28 listed commodities.

In other CFTC news, Commissioner Bart Chilton, a commissioner member since 2007 and a big supporter of the revised position limit fix, announced he’ll leave the CFTC before the end of his term in 2014. Chilton, a favorite of the ag side of CFTC oversight, has spent nearly 30 years in Washington, D.C., working for three members of the House, as deputy chief of staff to Secretary of Agriculture Dan Glickman and as an advisor to Sen. Tom Daschle (D-S.D.). He also held jobs at the Farm Credit Council and the National Farmers Union.

The Commodity Market Oversight Coalition said the fix to the speculative position limits rule required under the Dodd-Frank Act “was necessary to combat extreme price volatility and to guard against potential manipulation of U.S. commodities from oil to corn.”

When the position limits rule was first promulgated, a District Court ruled the CFTC had failed to include a so-called “necessary finding” to justify the rulemaking as it had with other Dodd-Frank actions. Last week’s action addresses the court’s concerns, CMOC said. The newly approved proposal is expected to be published in the Federal Register as early as this week.

Ethanol Producers: Cutting RFS Hurts, Stifles Industry; Boxer Plans Hearing

With the Environmental Protection Agency expected to announce any day a reduction in the 2014 Renewable Fuel Standard for all biofuels, corn ethanol producers said such action could cost producers as much as $3.6 billion in lost sales, but create a $4-billiion windfall for gasoline companies through increased fuel sales.

In related developments, Sen. Barbara Boxer (D-Calif.), chairwoman of the Environment & Public Works Committee, announced once EPA announces its 2014 RFS mandate, she’ll hold a “big” hearing on the RFS for conventional (corn ethanol) and cellulosic fuels before the end of the congressional year. At the same time, the American Soybean Association urged its members to contact Senators and get them to sign on to a letter being circulated by Sen. Patty Murray (D-Wash.) and Sen. Roy Blunt (R-Mo.) supporting a biodiesel RFS of at least 1.7 billion gallons.

An overall RFS reduction by EPA will also hurt investment for emerging fuels, such as cellulosic ethanol, “just as they are on the cusp of commercialization, the fuel producers said. “This would effectively kill any investment in advanced biofuels,” said an executive of Abengoa Bioenergy Corp. in Kansas, which expects to begin production at a 25-million-gallon-per-year cellulosic ethanol plant in January, according to reports.

The Renewable Fuels Association said EPA can’t legally reduce the RFS mandate for 2014. The agency’s authority allows it to reduce the biofuel RFS to reflect actual production or it can grant a waiver based on inadequate domestic supply, neither situation is at hand given an estimated 14.4 billion gallons of ethanol expected to be produced this year. “We are confident that when all the facts are assessed, the efficacy of the RFS will be affirmed,” said RFA President Bob Dineen. 

House Committee Announces Senate TSCA Bill Hearing

In a rare show of bicameral cooperation, the House Energy & Commerce Committee’s subcommittee on the environment and the economy is expected to hold its first hearing to review pending Senate legislation to reauthorize and streamline the Toxic Substances Control Act.

The Senate’s rocky road to reforming and reauthorizing TSCA seemed to smooth out when the Environment & Public Works Committee considered a compromise bill that mirrors a bill negotiated by committee ranking member Sen. David Vitter (R-La.) and the late Sen. Frank Lautenberg (D-N.J.), who was a committee member. 

The Vitter-Lautenberg bill gives EPA explicit authority to evaluate toxic chemicals on the market more quickly and efficiently. Critics contend, however, the Senate bill needs fixing because of fears it would restrict states from enacting tougher laws. Vitter has said he’ll work on his bill to avoid pre-empting the states or blocking lawsuits against chemical companies.

The House subcommittee has held TSCA hearings, but has taken no action or made public statements on its plans to reauthorize the law. The yet-to-be-announced hearing is expected to include witnesses from the industry, including the American Chemistry Council, as well as the Environmental Defense Fund, according to reports.

GM Labeling Ballot Question Fails in Washington State; Federal Action Expected

The national food industry spent an estimated $22 million to successfully defeat a Washington State ballot initiative that would have required all foods – including animal feeds and pet foods – sold in the state to be labeled if made from or with genetically modified (GM) ingredients. The margin of victory was 54-46 percent against the ballot question. Pro-labeling groups spent an estimated $8-10 million. The county in which Seattle sits voted nearly 57-43 percent in favor of the initiative.

The Grocery Manufacturers Association in Washington, D.C., coordinated much of the fundraising and boots-on-the-ground opposition to the labeling initiative, running afoul at one point of Washington State political registration and campaign financing laws. GMA was forced to file the names of its member companies paying into a special account to battle state initiatives.

“We are pleased the voters of Washington State rejected (the ballot initiative) by a significant margin,” said Pam Bailey, GMA president. “(It) was a complex and costly proposal that would have misled consumers, raised the price of groceries for Washington families and done nothing to improve food safety.”

Reports indicate at least 20 state legislatures will take up some form of GM labeling legislation in 2014. This continuing push by pro-labeling groups signals national food companies will very likely turn to Congress to pre-empt the states on food labeling while requiring the Food and Drug Administration to clarify and expand its labeling policies. 

This is the second statewide GM labeling ballot initiative to be defeated. California voters rejected a similar ballot question in 2012, a battle food companies spent an estimated $45 million to win.

Maine and Connecticut legislatures passed GM labeling laws, but those laws require at least five neighboring states to pass similar laws. The Connecticut law requires at least one state to share its border. The Connecticut law is expected to be “clarified” in January that it does not apply to animal feeds and pet foods sold in the state.

USDA Acts on Biotech Varieties; Seeks Comments on ‘Coexistence’

The U.S. Department of Agriculture announced actions to deregulate several pending biotech plant varieties, while in separate action asked the public to comment on how “coexistence” between biotech plantings and non-biotech plantings can be achieved.

The Animal & Plant Health Inspection Service published a notice to deregulate a Monsanto soybean variety designed to increase yield. The agency also published a request for public comment on the draft environmental assessment and draft plant pest risk assessment in response to a petition from BASF to deregulate its herbicide resistant soybean variety. It also published for comment on the same two assessments on a petition on apples designed to resist browning developed by Okanagan Specialty Fruits, Inc.

On coexistence, the Advisory Committee on Biotechnology & 21^st Century Agriculture is asking for comments on how to achieve coexistence following up on its 2012 report “Enhancing Coexistence: A Report of the AC21 to Secretary of Agriculture.” The report recommended action in five areas: potential compensation mechanisms in cases of contamination, stewardship, education and outreach, research and seed quality. After the comment period, USDA intends to hold a public meeting to discuss the public input. The comment period ends Jan.3, 2014. The documents can be found at www.usda.gov at the AC21 page.

CLA Report Shows Double Crop Chem Regulation Costs $474 Million

A report commissioned by CropLife America and released last week shows the cost of duplicative federal regulations on crop chemicals could cost taxpayers $474 million in unnecessary expenditures over the next 10 years. The bulk of the waste is based on “the existing broken system of endangered species consultations” on crop chemicals, a system CLA says “provides no additional benefits to wildlife, farmers or taxpayers.”

CLA points to FIFRA amendments from 1996 and 2007 requiring a 15-year cycle of pesticide registration reviews, with the first cycle to be completed by 2022. On top of that review, all Environmental Protection Agency pesticide registration actions must comply with Section 7 of the Endangered Species Act that forces the agency to consult with the National Marine Fisheries Service and the Fish & Wildlife Service if the registration “may affect” endangered species. Meanwhile, NMFS and FWS conduct their own independent reviews of ESA impact.

Summit Consulting, which conducted the study for CLA, reports that under the current system, NMFS and FWS conducting independent studies in addition to the EPA endangered species consultations on the scheduled review of 744 pesticide registrations translates to an additional cost to the Treasury of $474 million over current budget levels. CLA says the Summit report confirms findings of the National Academies of Science in an April, 2013, report that recommended a coordinated and common approach to reviews to save manpower and tax dollars.

Obama Creates Climate Change Task Force, EPA Announces Draft Action Plan, Vitter Wants to Know about Administration Lobbying on Climate Change Report

Taking steps to implement President Obama’s executive order creating an administration-wide “Task Force on Climate Preparedness & Resilience,” the Environmental Protection Agency released its draft Climate Change Adaptation Implementation Plan for public comment. The comment period ends Jan. 3, 2014.

The full draft plan, as well as other climate change-related documents, can be viewed by going to www.epa.gov and following the icons to the climate change section.

The President’s task force includes not only federal officials, but state, local and tribal leaders, included for their experience in handling natural disasters. 

Meanwhile, Sen. David Vitter (R-La.), ranking member of the Senate Committee on the Environment & Public Works, led a group of four Senators in writing to EPA Administrator Gina McCarthy wanting to know what EPA knows about the “Administration’s lobbying efforts to skew the results” of the upcoming multi-nation Intergovernmental Panel on Climate Change report. In a press release, Vitter said the U.S. government “weighed in” and requested “alterations to the scientific analysis,” calling the IPCC process “not a purely scientific one.”

The four Senators want to know if McCarthy was aware the IPCC report “was not going to support the statements of President Obama when she testified in April that the IPCC would, in fact, be able to do so.” Earlier this year, AP reported multiple countries lobbied the IPCC to swing the report conclusions one way or the other.

The EPA plan, which will be followed by similar plans from other administration departments and agencies, is designed to provide information on how the agency will help the nation “adapt to a changing climate.” 

EPA said the implementation plans offer “a roadmap” for agency work to protect public health and the environment. These include plans to deal with extreme weather, floods and droughts, the agency said. A separate draft – the “Climate Change Adaptation Plan” – was released in February, and is expected to be finalized sometime this fall. 

Stakeholders Vent at EPA Carbon Emission Regulation Listening Session

The Environmental Protection Agency got an earful at a public listening session about regulating carbon emissions as part of President Obama’s climate change initiative. At issue is a rulemaking EPA has undertaken to regulate the carbon emissions from existing coal-fueled power plants. Obama has told EPA to draft the emissions rule by June, 2014, and finalize it the year after.

Opponents of the EPA plan as laid out by Obama say the Clean Air Act does not give the administration authority to regulate the emissions from existing plants, action they say sets the stage for similar action against other types of facilities. EPA is already well into the process of regulating emissions from new power plants, requiring new plants to install major carbon recapture and storage systems. 

In a member “alert” sent last week, the Environmental Working Group said, “Rep. Ed Whitfield (R-Ky.) and Sen. Joe Manchin (D-W.Va.) have joined forces to draft legislation that would essentially handcuff the EPA and allow unlimited carbon pollution … (T)he Whitfield-Manchin bill would block the EPA on multiple fronts … it would halt their (sic) efforts to make sure that all new power plants are built with technologies that meet common sense standards to reduce carbon pollution—but it won't stop there. The EPA is also working to propose carbon pollution standards to begin cleaning up older, dirty power plants. But this bill would stop that in its tracks by changing the rules at the end of the game, requiring Congress to get its act together and pass additional legislation before power plants have to start cleaning up smokestacks.” 

The industry counters the technologies EPA wants to require are not yet commercially viable. EPA says a Department of Energy cost sharing program, where $84 million has been made available – along with cost-sharing programs – will lead to what it calls the “next generation” of carbon capture technology.

Senate Minority Leader Mitch McConnell (R-Ky.), who represents a major coal-producing state, appeared at the Washington, D.C., listening session and told the agency he was angry the agency had not scheduled a similar listening session in a coal state like Kentucky. EPA countered it has held meetings in coal states, though not in the coal-producing regions of those states.

McConnell said the Obama policies on coal-fired generators have cost Kentucky 5,000 jobs. Most of the facilities that used coal, however, switched to less expensive, cleaner-burning natural gas.

House Passes Farmer CWA NPDES Permitting Fix Again

The full House approved legislation protecting farmers who seek to use pesticides “on or near” navigable waters from the burden of having to register and permit the approved chemicals twice. This is the second time in as many congresses the House has approved the permit fix; the Senate Agriculture Committee approved a similar solution to the permit problem.

Under the bill, a chemical can be used on or near navigable waters if it’s already approved under FIFRA. This was the case until 2011 when the Environmental Protection Agency declared “point-source emitters,” including vehicles used to spray pesticides, had to get a National Pollutant Discharge Elimination System permits on top of the FIFRA registration. 

While the House version of the Farm Bill contains similar language, it’s expected that once the House bill is sent to the Senate, Sen. Benjamin Cardin (D-Md.) will again block it as he has successfully done over time.

Water Bill Moving to Conference as Senate Names Conferees

The Senate named conferees on the Water Resources Development Act, signaling its commitment to getting the bill reconciled, enacted and on the President’s desk before the end of this session. The House is expected to name conferees when it returns from its district work period this week.

A letter from six national unions to Boxer and the other committee principals in both chambers applauds the conference action and urges the conferees to retain language that will ensure that federally owned and operated water and navigational locks and dams will remain under the daily control of federal authorities. This is a position, the unions said, shared by the Waterways Council, which represents barge and ship operators.

OSHA Proposes All Injury Data to be Submitted Electronically

A new proposed rule released by the Occupational Safety and Health Administration would require all employers to submit required workplace injury and illness records electronically, the agency saying electronic submissions will allow it to better target workplace safety actions.

OSHA says the new rule will allow it to improve workplace safety and improve tracking of injuries and illnesses, and timed the new rule to follow the release of the annual Bureau of Labor Statistics report that shows 3 million workers were injured on the job in 2012.

The rulemaking is the result of a series of stakeholder meetings held in 2010 specific to electronic reporting. The new rule will require electronic reporting of injury and illness reports, but will not change the data to be collected under existing standards. The agency said it intends to eventually post the data online “as encouraged by President Obama’s Open Government Initiative.”

The comment period on the new rule ends Feb. 6, 2014, and the agency plans a public meeting in Washington, D.C., for Jan. 9. The rule can be found by going to www.osha.gov.