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Washington Report for 6-30-14

By Steve Kopperud

House to file suit against President Obama over ‘failure to faithfully execute' federal law

House Speaker John Boehner told the full House he will introduce legislation to authorize the House through its General Counsel to file suit in federal court “to compel the president to follow his oath of office.”

On the suit, the White House said: “They are considering a taxpayer-funded lawsuit against the president of the United States for doing his job. This lawsuit is nothing that’s going to consume the attention of the White House,” adding “we feel completely confident” the president acted in his authority.  When chided by Republicans for actions they consider outside his authority, such as changing deadlines, extending coverage and delaying implementation of the Affordable Care Act, Obama says he acts because a divided Congress can’t or won’t pass laws needed to address issues. 

The legal action is being taken, Boehner said in a July 25 memo to all House members because President Obama “ignores some statutes completely, selectively enforces others, and at times, creates laws of his own.”  He reminded his colleagues “only the legislative branch has the power to legislate.”  He cited Obama actions on health care, energy, foreign policy, education and immigration where “President Obama has repeatedly run an end-around on the American people and their elected legislators…”

Boehner says he’s asked by citizens why the House hasn’t acted before now to rein in the White House. “We elected a president, Americans note; we didn’t elect a monarch or a king.”   

Boehner did not give details as to which specific actions will be cited in the potential suit. He said he won’t pursue articles of impeachment against the president, an action that would require the House to prove the chief executive guilty of “high crimes and misdemeanors.”

The next step is a meeting of the House Bipartisan Legal Advisory Group. BLAG membership includes the speaker, majority leader, majority whip, minority leader and minority whip. House Minority Leader Nancy Pelosi said she will most likely vote against the suit, calling it “subterfuge” to distract from a Congress hamstrung by gridlock. She said immigration reform is a good example of lawmaker inaction, adding White House actions on deferred deportations and other enforcement tools are actions “to protect some vulnerable parties,” not grounds on which to sue the president.

 

Congressional Budget Office: RFS will lead to higher fuel costs

Gas prices will jump 9 percent and diesel fuel costs will increase 14 percent by 2017, all due to the federal Renewable Fuel Standard says a report by the Congressional Budget Office. To meet mandated RFS levels, gasoline and diesel refiners will have to more than triple their use of advanced biofuels (biodiesel, non-corn ethanol), while the blend rate for corn ethanol would have to be drastically increased.

For its part, the Environmental Protection Agency will likely keep RFS mandates relatively unchanged through 2017 because increasing them means higher advanced biofuels use and a higher percentage blend rate on gasoline. CBO said it’s unlikely food prices would change a great deal by 2017 if the RFS is repealed because fuel refiners would continue using the same amount of corn ethanol until alternative non-corn fuels were produced in sufficient amounts to meet their needs.

 

Dems  say not bluffing on White House immigration actions if Congress doesn’t act

Democrat leaders in both chambers said that when it comes to immigration reform, they’re “not bluffing” when they say the president will act if Congress doesn’t. President Obama has delayed implementing his new policies on deportation to give the House through July to act on reform.

Rep. Louis Gutierrez (D,-Ill.), who has been optimistic the House would act on immigration this summer, said on the House floor prospects for reform have disappeared and the only alternative is for the president to act. Sen. Robert Menendez (D-N.J.) said, “We’re at the end of the line. We’re not bluffing by setting a legislative deadline for them (the House) to act.” 

House Speaker John Boehner said he’s named a “working group…to examine the national security and humanitarian crisis at the southern border,” referring to the flood of unaccompanied, undocumented minor children entering the United States in recent weeks.  Boehner blamed the president for allowing the crisis to develop, saying he’s conveyed to the White House his thoughts on steps that need to be taken, including sending the National Guard to the border to protect the children.

Rep. Kay Granger (R-Texas) will chair the task force. Other members include Rep. Mario Diaz-Balart (R-Fla.), Rep. John Carter (R-Texas), Rep. Bob Goodlatte (R-Va.), chair of the House Judiciary Committee, and Rep. Michael McCaul (R-Texas). 

 

Supreme Court news
Court imposes some limits on EPA climate authority

The U.S. Supreme Court upheld most of the Environmental Protection Agency's authority to regulate air emissions but said the agency can’t require industrial pollution sources to get Clean Air Act permits based solely on their potential to emit greenhouse gases. The decision came in the Utility Air Regulatory Group v. EPA, which challenged the agency’s authority to force companies to get permits when they build new plants or modify existing facilities. The ruling seems to protect current White House carbon capture actions under certain circumstances. While the GHG-only permitting action was thrown out, the high court in its 5-4 decision said it’s different if the new or modified facility will emit other pollutants, such as sulfur dioxide. In such cases, the court said, EPA is well within its authority to require the facility use “best available technology” to limit all regulated emissions, including GHG. Reaction to the decision was split, with both sides of the GHG regulation issue claiming victory.

 

President wrong on 'recess appointments'

A unanimous Supreme Court said President Obama overstepped his authority when he acted unilaterally to appoint members to the National Labor Relations Board as “recess appointments” when the Senate was in session and technically could have confirmed the nominations.  The court said the White House does not determine when the Senate is in session, only the Senate can do that. The high court decision is likely to impact more than 100 workplace dispute actions taken by the NLRB.  Business groups contend that any decision made by the board when any of its members was not formally confirmed by the Senate is in doubt.  However, there is a legal principle known as “de facto officer doctrine,” which says government actions by officials could remain valid even if the official’s office validity is challenged. Today, all five NLRB members have been confirmed by the Senate.  

 

House passes CFTC reauthorization bill, end user protections

The full House approved HR 4413, the “Customer Protection and End-User Relief Act,” its version of legislation to reauthorize the regulatory authority and operations of the Commodity Futures Trading Commission. Notably, the bill curtails some Dodd-Frank rulemakings the House found objectionable and includes end user protections and cost-benefit analyses for new rules.

House Agriculture Committee Chair Frank Lucas (R-Okla.) and committee ranking member Rep. Collin Peterson (D-Minn.) both praised the bill and the bipartisan committee process that got it to the floor. They cited customer protections in the bill to avoid another MF Global bankruptcy, including that firms must calculate and report customer account balances electronically to regulators; requiring firms which become undercapitalized to immediately notify regulators, and imposing strict new reporting and permission requirements before agents can move customer funds from one account to another.

The Senate is still putting its CFTC bill together. Sen. Debbie Stabenow (D-Mich.), chair of the Senate Agriculture Committee, said of the House action: “I’m pleased to see the House bill includes measures to related customer protections, as well as important considerations for end users like farmers, ranchers and small businesses who rely on the markets to hedge risk.”

Stabenow said, however, there needs to be greater resources allocated to the CFTC because “21st century markets need a 21st century regulator.”  She said the commission needs the resources, staff and technology to be effective, and the House bill doesn’t provide any additional funding, but adds new layers of administration.  

The House’s Dodd-Frank action was taken because many of the rules are considered “unnecessary,” and that end users, those who actually use the futures markets to hedge risk, are being buried under new rules with little new protection from commercial speculators. Lucas and Peterson say the end user protections also include reduced recordkeeping, and preventing the physical delivery of a commodity from being treated as a swap. Critics of the Dodd-Frank action say cutting back financial market oversight is setting the stage for another financial collapse. 

The bill is actually several individual pieces of legislation approved by the House Agriculture Committee and passed by the House, rolled into a single package for floor consideration.  Included is action to exempt end users from new margin or cash reserve requirements on derivatives trading.  The bill also blocks the CFTC’s actions on cross-border derivatives trading.  All rules developed by the CFTC would require cost-benefit analyses before being finalized.

 

BNSF, CP get new Surface Transportation Board orders

The Department of Transportation’s Surface Transportation Board published a new directive requiring the BNSF Railway and the Canadian Pacific Railway to give the board an update plan, along with detailed reports on the rails’ plans to end backlogs of grain shipments, as well as a timeline for achieving their goals.  The rails are also ordered to file weekly reports until the backlog is eliminated.  The situation is due to be complicated soon by wheat harvest which will increase demand for hopper cars. 

“Although the data submitted by both railroads indicates some initial progress toward reducing their grain car order backlogs and grain car delays, the board remains concerned about the limited time period until the next harvest, the large quantities of grain yet to be moved and the railroads’ paths toward meeting their respective commitments,” the STB wrote. 

The new orders come on the heels of previous STB action requiring the same two railways to report on spring deliveries of fertilizer to farmers mainly in the Upper Midwest and northern tier states, but extending as far south as Texas. 

The rails says the backlog in both grain and fertilizer shipments is due to competition problems with oil and gas shipments, bumper crops of corn and soybeans and a severe winter which “stressed” the rails’ networks.

 
Senate finance committee reaches deal on short-term highway funding

In a bid to forestall the bankruptcy of the federal Highway Trust Fund later this summer, the Senate Finance Committee reached a compromise $7.6-billion financing deal after panel chair Sen. Ron Wyden (D-Ore.) floated a $9-billion, 10-year plan. Reports indicate the Senate deal mirrors actions contemplated in the House Ways & Means Committee, and both panels say they’ll mark up formal legislation next week.

The Wyden plan sought to modify five separate areas of the federal tax code, directing the savings or new income to funding the HTF.  One such move would have required anyone inheriting a 401 (k) retirement fund or an IRA to spend the funds within five years, paying all relevant taxes in the same period.  Other committee proposals would increase the federal gas tax by 12 cents over three years, or alternatively, peg the gas tax to inflation.

However, committee ranking member Sen. Orrin Hatch (R-Utah) said cost cutting and new revenue needs to be part of the long-term HTF fix. For himself, Hatch proposed allowing expanded oil and gas exploration in Alaska and the outer continental shelf to raise about $3.2 billion over 10 years. He’d also repeal a tax credit for plug-in cars and trucks, as well cut funding for an “advanced” vehicle manufacturing loan program.  All highway infrastructure project components not directly related to construction would be moved off the HTF tab and would be paid for by the general fund.  Lastly, $1 billion from a leaking underground storage tank trust fund would be transferred to the HTF. 

Wyden’s original plan was roundly criticized for being built upon higher taxes on various forms

of carriage.  Wyden had proposed an increased tax on heavier or “extra-weight” trucks, designed to raise $1.35 billion over 10 years. However, committee negotiations resulted in that provision being stripped out of the finance plan. A new provision to equalize the HTF’s per-gallon tax treatment of liquefied natural gas fuel and diesel fuel was accepted. 

During the committee action, an amendment to increase the federal user fee paid by barge owners was accepted when offered by Sen. William Casey (D-Pa.).  Barge operators had sought the fee increase to 29 cents per gallon of diesel through the respective transportation committees, but the funding increase was kicked to the tax writing committees for formal approval.

 

Cargill CEO says climate change 'scenarios' must be managed

Fresh from a White House meeting on climate change and release of a new report entitled “Risky Business,” Cargill, Inc. Chair and CEO Greg Page told production and processing agriculture steps must be taken to “manage” climate change scenarios. 

Page didn’t get embroiled in the political bickering over climate change, global warming or whether the federal government should mandate ways industry must adapt to a changing global climate, but said, “We are in a risky business and in a risky business it is important to think about potential scenarios.  Not being willing to have those discussions is no way to manage risk.”

The Cargill chief executive said his company is in the midst of global adaptation to climate variations, and even though he acknowledges there remains disagreement within Cargill over global warming, it’s clear steps need to be taken to make crops more drought and heat tolerant, and to breed meat animals that can handle greater heat than conventional breeds.

Page said it’s important to learn “from the places where we already practice agriculture today under conditions that could become more prevalent here in the U.S.,” a reference to higher average growing season temperatures and frequent drought.  

However, Cargill is “optimistic” there are potential benefits to climate change, “rooted in things we already see being done in agriculture on a global basis and thinking about where else we might apply it.”  Company operations near the equator are providing clues and new tools for remodeling swine operations in similar high-temperature areas, and realizing crops, including corn, can adapt to hotter growing conditions because farmers near the equator are getting 160 bushels per acre now.

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