The negotiations over increasing the federal debt ceiling by August 2, and how much more federal spending will be cut to offset that increase, continued this week, with President Obama calling House and Senate leadership to the White House, only to announce progress has been made, but the deal “is not close yet.” Negotiators are expected to meet in a rare Sunday session and throughout next week. Republicans, particularly in the Senate, continue to demand President Obama leave the White House and actively engage with Congress on the agreement, with Sen. Pat Roberts (R, KS) this week joking, “the President needs to take a Valium, calm down and come up hear and talk with us.” While political maneuvers, including a Senate test vote on who’s rich in America and deserves higher taxes continue, Sen. Kent Conrad (D, ND), chair of the Senate Budget Committee, this week briefed his Democrat colleagues on his draft FY2012 budget resolution, a plan aimed at cutting $4 trillion from federal spending over the next decade, a move in line with the President’s deficit reduction commission report. Conrad declined to release the full document to the public, but reports indicate initial reaction to Conrad’s plan was positive, with the resolution reaching the budget goal through a combination of spending cuts, closing tax loopholes – which some Republicans are willing to consider if other taxes are cut to offset the cost – and reducing interest payments on the debt. Also appealing to many is the relatively light touch Conrad’s plan takes in cutting health care entitlement programs, including Medicare and Medicaid.
In a Washington, DCpress conference this week, the United Egg Producers (UEP) stood with the Humane Society of the U.S. (HSUS), the nation’s largest animal rights group, to announce the two organizations have reached agreement on seeking federal legislation to govern how laying hens will be housed. Word of the agreement slipped out prior to the formal announcement, and the National Pork Producers Council (NPPC) immediately warned “legislation preempting state laws would set a dangerous precedent for allowing the federal government to dictate how livestock and poultry producers raise and care for their animals. NPPC is gravely concerned that such a one-size-fits-all approach will take away producers’ freedom to operate in a way that’s best for their animals, make it difficult to respond to consumer demands, raise retail meat prices and take away consumer choice, devastate niche producers and…redirecting valuable resources from enhancing food safety and maintaining the competitiveness of U.S. agriculture.” UEP said the pact was reached “after a series of exhausting meetings and conference calls,” and will lead to a “transition from primarily a conventional egg production business to enriched cage housing” over several years. All existing cages would be phased out by 2029. UEP said the agreement was necessary to avoid expensive state referenda sought by HSUS, including one planned for Oregonin 2012, and to bring consistency to state regulation of egg production to “protect our customers and the marketplace from disruptions.” If successful – and the groups hope to have a law in place by June 30, 2012 – the federal law would preempt 50 state laws on egg production, including “addressing California’s Prop 2 vague language” and preempting Michigan law and any other state law mandating cage sizes. The agreement also covers non-feed withdrawal molting, euthanasia and air quality and ammonia levels in hen houses. Both groups have agreed to not “initiate, fund or support” any state ballot measures or local initiatives on hen cage space while working to get the federal law. Paul Shapiro, HSUS, told the Des Moines Register his week: “There’s a big catch, however. The two groups agreed to jointly ask Congress for a federal law that set standards and a timeline for the changes, and that legislation will have to pass for the deal to go through. If the bill doesn’t pass, ‘then the agreement would be off and we’d be likely to see more ballot measures, litigation, etc. Both sides want to work together to enact.” The American Humane Assn. (AHA), a welfare organization inDenver, said it’s encouraged by UEP’s willingness to embrace enriched cages, but said it’s withholding judgment until it sees the actual legislative language of the proposed law, a sentiment echoed by several organizations. UEP will explain the agreement and answer questions about the goals of the legislation atWashington,DC meeting of the Farm Animal Welfare Coalition (FAWC), an ad hoc coalition of the nation’s largest producer and input organizations. The press conference featured UEP executives, Wayne Pacelle, president of HSUS, Rep. Earl Blumenauer (D, OR) and Bruce Friedrich, former PETA executive, now director of strategic planning for Farm Sanctuary.
Sen. Dianne Feinstein (D, CA), long-time opponent of federal subsidies for corn-based ethanol production, and Sen. Amy Klobuchar (D, MN) announced this week they’ve reached an agreement on how to end ethanol subsidies. The White House looks to support the agreement, but congressional critics of ethanol supports contend the package is still too generous to the ethanol industry and the votes are there to kill the program without compromise. While the ethanol industry was not unanimously in favor of the agreement, the industry has come to realize its share of the federal tax credit pie is quickly disappearing, but nonetheless, pledged to change the deal before it is considered by the Senate. While Feinstein won a symbolic floor victory a few weeks ago when the Senate approved her amendment to kill outright the ethanol blenders’ tax credit and import tariff, Klobuchar and Feinstein worked to marry the Feinstein bill with one introduced by Klobuchar and Sen. John Thune (R, SD) to reduce the ethanol credit over three years, tie future credits to the world price of oil and invest in ethanol infrastructure development. The new deal will end the 45-cent-per-gallon ethanol blenders’ credit on July 31, saving about $2 billion for the rest of 2011, with $1.3 billion going to deficit reduction; the import tariff will disappear on July 31 as well. A separate tax credit for cellulosic ethanol production, set to expire at the end of 2012, would be extended for three years, with annual caps on production, and will be expanded to include algae feedstocks. The deal also includes extending for three years reduced tax credits for “alternative fueling infrastructure,” including electric vehicle charging stations, and extends a small-producer tax credit as well.
In a reversal of last week’s finger-pointing exercise between Senate Finance Committee Republicans and Democrats over a cancelled “mock” markup of three pending free trade agreements, both Senate Finance and the House Ways & Means Committee this week held oversight hearings on theKorea,ColombiaandPanamafree trade agreements with both endorsing congressional ratification. The committee actions allow members to propose changes to the deals for White House consideration, but the action isn’t binding on the Administration. However, a fundamental difference between the two panels’ action was that the Senate action on theKoreadeal contained reauthorization of Trade Adjustment Assistance (TAA), while the House action did not. The three trade deals, originally negotiated by President George W. Bush, are a high priority forU.S.agriculture and manufacturing. However, these supporting camps are split over TAA, with many contending reauthorizing and/or expanding TAA, a program designed to aidU.S.workers whose jobs, hours and benefits are affected by trade agreements, should be dealt with separately. A TAA deal between the House and Senate and blessed by the White House would renew an expired health care tax credit for workers, but scale it back, and the Senate included that language in its Finance Committee action. However, Rep. Dave Camp (R, MI), chair of the Ways & Means Committee, said his agreement on TAA goes to the reauthorization of that program, not the inclusion of that program in one of the trade deals. The next step is for the White House to formally submit the three agreements to Congress. Once done, Congress has 90 days to approve or reject the trade deals.
The governments ofMexicoand theU.S.this week signed a memo of understanding to resolve a long-standing dispute over cross-border trucking access for the two nations under provisions of the North American Free Trade Agreement (NAFTA). With the signing, Mexico ends 50% of current retaliatory tariffs on U.S. imports by the end of this week, with the remainder removed as soon as the first Mexican trucking company receives a permit to enter the U.S. beyond the current “trade zone” at border points. The deal will operate for up to three years. The American Farm Bureau Federation (AFBF) praised the action, saying, “It’s important for theU.S.to live up to its trade agreement obligations under NAFTA. Any effort by Congress to prohibit this from moving forward will causeMexicoto once again put tariffs in place.” Secretary of Agriculture Tom Vilsack said the deal “is a major win forU.S.agriculture, American jobs and our economic prosperity,” adding the running dispute has costU.S.companies approximately $2 billion. However, Rep. Peter DeFazio (D, OR) a long-time champion of independent trucking companies which oppose the agreement, said three issues must be addressed for Congress to stay out of the deal: Safety, security and job loss. He was joined by Rep. Daniel Lipinski (D, IL) and Duncan Hunter (R, CA) on a bill that would prohibit the federal government from using Highway Trust Fund dollars to fund or equip Mexican trucks with on-board electronic sensors, an action the White House says is necessary to monitor hours-of-service requirements. To operate in each others’ country, the deal requires companies, equipment and drivers to meet all local and federal safety and driver training requirements.
The House Appropriations Committee subcommittee on EPA spending this week approval a draft FY2012 spending package that would fund EPA at $7.1 billion, $1.5 billion less than this year and nearly $2 billion less than recommended by President Obama. In addition, the bill carries several policy riders, including a one-year delay on EPA regulation of greenhouse gases from stationary industrial sources, and one that would prohibit the agency from regulating coal ash from power plants, and yet another that would change the agency definition of “navigable waters.” Subcommittee Chair Mike Simpson (R, ID) said he fully expects more action at full committee and on the House floor to “rein in” EPA, saying, “believe it or not, we turned away more policy provisions than we included.” Simpson explained one major reason for the cut in spending for the coming fiscal year is that EPA received billions in stimulus funding and appropriations in FY2010 that have not been spent. Democrats almost unanimously condemned the cuts.
EPA this week announced it will delay by three years including biomass-fuel facilities from proposed regulations to limit greenhouse gas emissions. The agency said it will use the time to study the effect of biomass plant emissions on air quality. The delay is also to avoid what EPA Administrator Lisa Jackson described back in January when it was first proposed, “a chilling effect on renewable, homegrown power sources.”
Sen. Pat Roberts (R, KS), ranking member of the Senate Agriculture Committee, said this week he’ll hold a Farm Bill field hearing August 25 in Wichita, Kansas. The focus of the hearing is going to be on reauthorization of existing Farm Bill programs, with a focus on their effect onKansasproducers. The meeting will begin at 9 a.m. atHiltonWichitaAirport. The hearing is the second to be held by the Senate ag panel, the first being hosted by panel Chair Debbie Stabenow (D, MI) inLansing,Michigan, in May.