House Speaker John Boehner (R, OH) spent most of July 28 trying to convince Tea Party GOP members to vote for his debt ceiling increase package, and while insiders say he had the votes late in the day, he opted to delay the full House vote on the package to build his margin to demonstrate the broadest GOP support possible. Boehner, whose package would raise the debt ceiling by up to $2.5 billion – with a repeat vote on any increase set in six months – while cutting spending by up to $2.7 trillion over 10 years, must come up with a solid 216 votes to pass the bill, allowing 24 of his GOP caucus members to defect, assuming the Democrats will vote unanimously against the package. The refusal by GOP budget hawks centers primarily on demands the Boehner package carry a balanced budget amendment section, action that would obligate the Congress to approve budgets where spending does not exceed projected income. Such a restriction would need to be ratified by the states. The ultraconservative GOPers contend this is the only way in which to beat the deficit challenge long term, and the only development that will allow them to shift their votes to the “aye” column. For his part, Boehner has said he’ll allow separate votes on two similar balanced budget amendments, but is hitting a stone wall with the 24 “hell no” members as they’ve been dubbed on the Hill. Meanwhile, the Boehner plan is expected to undergo further changes within the details of the package, and the House Rules Committee voted July 28 to waive procedural requirements to allow Boehner to move the bill to the floor as soon as he’s ready. In the Senate, Majority Leader Harry Reid (D, NV) said his chamber will take up any House-passed bill as soon as it reaches the Senate, but also said he has 53 votes to kill a House package. However, Reid faces much the same challenge as Boehner. Reid, who’s put forward his own plan which tracks the Boehner bill in several key ways but which is out of sync with Boehner’s timelines and rejects the 2012 second vote approach, is challenged in coming up with enough votes to get his bill through the Senate. Action could come as early as Friday, July 29 in the House, but it’s unknown if Reid will hold the Senate in session this weekend despite the August 2 deadline set by the Treasury.
Despite action in the Senate to kill federal subsidies for corn-based ethanol and then an announced agreement to kill the blenders’ tax credit and import tariff in exchange for infrastructure investment and tax supports for non-corn ethanol, Senate negotiators are desperately seeking a vehicle to enact the new agreement. With Congress consumed with debt ceiling negotiations, very few bills are moving and this has limited the options open to Sens. Dianne Feinstein (D, CA), Amy Klobuchar (D, MN) and John Thune (R, SD), architects of the compromise end to federal support for ethanol. Klobuchar told a group this week she’s hoping to attach the ethanol fix to the debt ceiling package when it reaches the Senate floor, but she’ll need the blessing of leadership on both sides of Capitol Hill to do so. She said if the ethanol changes are ratified this summer, the public loses deficit savings of about $1.13 billion – that portion of the savings her bill would dedicate to deficit reduction. All three Senators have said they’re confident the Senate – and likely the House – will approve the changes to the ethanol program if only they get a chance to vote on them.
Well over 100 state and national agriculture organizations – including the American Feed Industry Assn. (AFIA) and the National Grain & Feed Assn. (NGFA) – along with several companies – this week sent an open letter to President Obama and Congress demanding they take immediate action to ratify trade agreements with Colombia, Panama and South Korea. Urging the politicos to “stand up for American exports and the jobs that depend on them,” the letter explained to the lawmakers in no uncertain terms that to delay ratification was to multiply the economic damage already done. “If there is any doubt about the seriousness of the problem for U.S. agricultural exports, one need only consider the damage that’s already been done by the delay in implementing…negotiated agreements,” the letter said. The groups pointed to competing trade deals negotiated by Argentina and Brazil through MERCOSUR with Colombia that give the two Latin nations preferential access for corn, wheat and soybeans. The groups also pointed out that on August 15, Canada’s free trade agreement with Colombia takes effect that will further negatively impact wheat exports. Said the ag groups: “It is difficult to watch years of market development evaporate in a matter of months because we can’t compete on the basis of price, making the U.S. a residual supplier where it was once the main supplier.” Congressional leaders say they’ll attempt to move the pacts in September.
House Agriculture Committee ranking member Rep. Collin Peterson (D, MN) said farmers and ranchers in drought-stricken areas of the country should not expect Congress to step in to provide emergency disaster assistance above and beyond what’s already available because the traditional legislative options to provide such ad hoc aid aren’t available. Peterson, speaking at a subcommittee on general farm commodities and risk management hearing this week said such aid has been traditionally attached to supplemental spending bills requiring no offsets or cuts in other programs, but such bills “are history.” Earlier this year the House cut a $1-billion high-speed rail program out of an appropriations bill to find the money to pay for flood disaster assistance in the Midwest, he pointed out. Peterson said southern producers are asking about additional disaster assistance beyond what’s provided in the 2008 Farm Bill, an action lawmakers took to preclude the need for emergency funding. But farmers complain the Supplemental Revenue Assistance Program (SURE), the largest disaster assistance program, requires highly complex computation on losses, payouts can take up to a year and only apply to crops not eligible for crop insurance. Committee Chair Frank Lucas (R, OK) said SURE expires September 30, a full year before the new Farm Bill will be written, and that to renew it his panel will have to find the money elsewhere. The American Enterprise Institute (AEI) released a paper recently saying the SURE program needed to be simplified or killed off. Peterson has rejected the AEI paper as “ideology” that “doesn’t pass the laugh test.” He said he wants to examine how SURE benefits can be incorporated into private insurance policies offered under federal crop insurance.
Another victim of Congress’ inaction due to its wrangling over the debt ceiling and spending cuts is immigration reform, despite White House and congressional supporters’ largely symbolic efforts this week. The broad issue of immigration reform is so politically contentious it faces a serious uphill battle even in the best of political circumstances, and this year’s deep and wide partisan divide over economic issues doesn’t bode well for such the debate. Supporters hoped to be able to seriously begin the process of overhauling the nation’s immigration laws and finding a solution to deal with 12 million illegal immigrants now in the U.S., and President Obama this week met with leaders of the Council of LaRaza, the nation’s largest Latino interest group, and Sen. Charles Schumer (D, NY) held a hearing on the economic contributions made to the U.S. economy by immigrants. At the same time the DREAM Act, legislation to allow the children of illegal immigrants to gain citizenship if they enroll in college or join the military, has been reintroduced after failing last Congress, and a broader immigration reform measure has been introduced by Senate Democrats. However, in the House, a bill called “Hinder the Administration’s Legalization Temptation Act (HALT) introduced by House Judiciary Committee Chair Lamar Smith (R, TX), is accused by immigration reform advocates as “suspending vital protections for vulnerable immigrants that have received bipartisan political support decades.” HALT would pare back certain social protections supported by the White House and sunset on the last day of the Obama Administration. The American Immigration Lawyers Assn. (AILA) called the bill a “mean-spirited bill out to score cheap political points… (and) unworthy of further congressional consideration.”
A letter from more than one third of the Senate this week told EPA Administrator Lisa Jackson her agency is once again moving too fast as it contemplates changes to the Clean Air Act (CAA) to regulate ground-level ozone. Thirty-four Senators from both sides of the aisle told Jackson they oppose agency plans to set national ambient air quality standards for ozone based primarily on a lack of benefits when compared to the compliance costs. “The economic impact of EPA’s proposal (is) highly concerning…because of the billions of dollars that EPA acknowledged would be imposed on America’s manufacturing, energy, industrial and transportation sectors,” the Senators wrote. A similar letter, but also seeking documents and information from the agency, was sent this week by the Chair of the House Energy & Commerce Committee Rep. Fred Upton (R, MI), along with two of his subcommittee chairs, Reps. Ed Whitfield, energy and power subpanel, and Cliff Stearn, subcommittee on oversight and investigations. EPA is designing new standards for ground-level ozone, a major component of smog, which the agency said causes serious respiratory problems for children, the elderly and adults who “spend a great amount of time outdoors.” The current allowable level is 0.075 parts per million, a level which didn’t jive with outside advisor opinion, the agency says. EPA proposes setting the new level at 0.060-0.070 ppm, the level recommended by advisors in 2008 when the Obama Administration said it would reconsider the Bush Administration action. Business interests say if the level is lowered to such a degree, it will throw many counties across the country out of compliance, triggering potentially expensive actions to meet the new requirement. Further, they point to a CAA requirement that ambient air quality be reviewed only every five years, accusing the Obama Administration of taking a voluntary action, not one required by law. The agency previously said it would issue a final rule this week, but rescinded that notice, saying the rule is sitting at the Office of Management & Budget (OMB) for review. EPA further said the new standards will be based on the “best available science,” adding it will “use the long-standing flexibility of the CAA to consider costs, jobs and the economy.”
A bill to eliminate a duplicative and redundant EPA registration process for pesticides used on or near water, which has passed the House but is bogged down in the Senate, was a target of House Agriculture Committee Chair Frank Lucas this week, along with a House action to block EPA rules on air particulate levels, also known as the EPA dust rule. Lucas, referring to the pesticide registration fix portion of HR 2584, alleged Senate inaction is stifling economic growth, a charge he also attached to EPA’s dust rule. The pesticide fix would eliminate a NPDES permit requirement for the pesticides used on or near water as long as they’re registered under FIFRA. The fix is awaiting action by the Senate Environment & Public Works Committee, having been approved already by the Senate Agriculture Committee. Panel Chair Barbara Boxer (D, CA) says she has concerns, but has not scheduled a hearing or action on the bill. The House added the language to its FY2012 EPA appropriations bill, but the fate of any appropriations bill is up in the air due to unresolved debt ceiling issues. The dust rule action, which Lucas said amounts to a “cow tax on livestock producers,” is yet another example of EPA exceeding its authority. Lucas said both EPA actions threaten to put agricultural producers out of business.
A bipartisan Senate bill to delay by 15 months EPA’s controversial industrial boiler/incinerator rulemaking was unveiled in the Senate this week. The bill would require EPA to rework its current rules, an action taken by the agency under court order, but which even EPA acknowledges don’t meet the mark when it comes to mandating industry use “maximum achievable technology” to control emissions such as mercury. The bill would also give companies five years to comply with the new rules, two more years than originally proposed by EPA, and the agency is required to consider the cost, feasibility and impact on jobs of the reworked rules. The six Senators, led by Sen. Susan Collins (R, ME), agree with industry critics of the agency rulemaking who say the extension is necessary so EPA can “get the rule right and for businesses to plan for capital expenses,” which the group said could amount to “billions.” EPA first issued the rules in February in compliance with a court order, but because the rule was so different from a previous version, the agency said it would halt implementation to receive additional public comment. EPA continues to assert it will issue a revised proposal in October and a final rule by the end of April next year. The House introduced identical legislation in June.
A Monsanto petition for deregulation status for its new MON 87460 drought-tolerant GM corn will continue to receive public comment, USDA said this week, “allowing interested persons additional time to prepare and submit comments on the…petition and APHIS’ plant pest risk assessment and draft environmental assessment.” The new deadline for comments is August 12, but the department said it will consider all comments received since July 12, the day after the original comment period closed. Supporting documents and any comments received can be reviewed by going to www.regulations.gov/#!documentdetail;D=APHIS-2011-0023.
USDA used its lending authority to shift $500 million between department accounts to meet high demand from producers to obtain guaranteed farm ownership and direct farm operating loans, Secretary of Agriculture Tom Vilsack said this week. At the same time, the Federal Reserve Bank of Kansas City reported this week ag lenders issued 14% more non-real estate operating loans in the second quarter versus a year ago to help farmers cope with increasing fertilizer, fuel and feed costs. “Demand is strong,” said Vilsack, who said the loan programs facilitate producers creating long-term relationships with commercial lenders. About $100 million will go to direct operating loan program to help out about 1,600 small, beginning and minority farmers to establish and/or maintain “family farming operations.” Another $400 million in loan funds will be made available to underwrite the guaranteed farm ownership program that will benefit about 1,000 farm families, Vilsack said. The Kansas City Fed also reported while operating loan levels increased, capital spending in the farm sector cooled, with loans for farm machinery and equipment plummeting 36% from a year ago.
The trading limit on corn futures would increase from 30 cents to 40 cents under a plan submitted to the Commodity Futures Trading Commission (CFTC) by the CME Group, authority the group says it wants despite strong opposition from grain trading companies. Today the upper limit move on corn contracts is 30 cents, increasing to 45 cents and again to 75 cents under certain conditions. The CME Group proposal would set the limit move at 40 cents, moving up to 60 cents. CME Group said the current limits are too low compared to those for wheat and soybeans (60 cents/bushel and 70 cents, respectively) and have to be raised to avoid market disruptions and loss of business. Opponents contend increasing the limit will expand margin requirements and cut back on available capital, with the result commercials and end-users may be driven out of the market. CME said “the industry will have to increase capitalization to do business,” according to one report.
A study conducted by multiple federal entities found no “consistent” connection between atrazine exposure and cancer rates among farmers, farm families or pesticide applicators. The Agricultural Health Study (AHS) began in 1993 to study the relationships between living and working on a farm and hazardous substance exposures and cancer risk. The research focused on atrazine and 19 other pesticides. Supporters of atrazine safety said this study confirms previous work about the safety of atrazine. The study was conducted by the National Institutes of Health (NIH), USDA and EPA. Results of the study can be found at www.agsense.org.