Having pledged to find $23 billion in spending cuts over the next decade, House and Senate Agriculture Committees are scurrying to find the perfect reinvention of the “income safety net” by embracing some form of revenue-based federal insurance for farmers and ranchers. Rep. Collin Peterson (D-MN), the House ag panel’s ranking member and its former chair, tried to simplify the revenue insurance approach this week by saying, “If you have a good year and a good crop, you get no government payment,” but added his favored approach pays farmers when prices go down or crops are bad. House Agriculture Committee Chair Frank Lucas (R-OK) said the challenge is “how to make it work for all regions and all crops” and “meet the expectations of Congress and outside the body” from those who don’t understand crop production or farm programs. And while staff struggled to get a plan to the Joint Special Committee on Deficit Reduction by the end of this week—they missed an earlier deadline—27 members of the House sent a letter to the super committee protesting “the secret farm bill” process. Peterson told reporters this week committee leaders are looking favorably at a “shallow loss” program, where even relatively small crop losses could trigger payments. The use of base acres to determine payments would be ended, but using actual acres as part of the payment formula is still a question. No requirement for federal crop insurance is included in the program design, but Peterson said producers would buy the policies nonetheless. For certain crop producers, including rice and peanuts, who traditionally have not been insurance buyers, it’s likely the new program would include a modified counter-cyclical payment program.
While just about every commodity group benefitting from soon-to-end federal direct payments is pointing at some form of insurance-based revenue protection—except for the American Farm Bureau Federation—the House and Senate ag committees were hit this week with a study by the Environmental Working Group (EWG)—done at Iowa State University (ISU)—showing federal revenue insurance fails to control costs, with “billions of dollars in windfall” benefits accruing to “big insurance companies and agents.” The study, done by Dr. Bruce Babcock, reveals costs of revenue insurance have increased “exponentially”—tripling to $8 billion since 2000 – and farmers have been enticed to buy the most expensive policies that carry higher premiums, a cost partially paid by USDA. In a related action, EWG laid out its Farm Bill priorities this week, calling for elimination of direct, counter-cyclical, loan deficiency, ACRE and SURE payments; free crop insurance to every farmer covering yield losses over 30%, eliminating federal premium subsidies for revenue-based products; requiring farmers to meet “a basic standard of conservation” to receive crop insurance, and requiring full transparency through USDA publishing who gets the free policies, the taxpayer cost of the policies and how much each farmer gets in insurance payments. These steps, said EWG, the folks who brought you the direct farm program database listing all recipients of federal payments, would save $80 billion over 10 years, compared to the $23 billion agreed to by the committees.
The Joint Special Committee on Deficit Reduction, deadlocked so far and facing a November 23 deadline to fashion a bill to cut at least $1.5 trillion from federal spending over 10 years, is being pulled in various directions as members of Congress—and now party leadership—call for as much as $4 trillion in spending cuts and others weigh in to save various programs from the budget ax. The game got tougher this week as both parties submitted formal deficit reduction plans to the super committee, and both called for significantly greater savings than the $1.5 trillion mandated. The GOP says no tax hikes are acceptable, offering a plan that relies on about 70% in spending cuts, but did say they’d talk about fees to pay for certain government services, while Democrats put forward a plan that’s just about evenly split between savings and tax cuts, but also talked about targeted savings in heretofore untouchable programs, including Medicare and Medicaid. House Speaker John Boehner (R-OH) surprised observers by saying higher revenues, including closing tax loopholes, should be considered as part of the plan. Boehner told reporters “there’s room for revenues,” tying the concession to “real change” in entitlement programs. And while some found this statement new, it reflects a GOP position going back to negotiations on the FY2011 spending package. At that time, Boehner initially agreed to nearly $800 billion in “revenue enhancers”—mostly through targeting tax code loopholes—but the White House tried to sweeten the pot by another $400 billion, forcing Boehner to walk away. And while Boehner is mum on tax reform, Senate members of the super committee continue to talk about tax reform as part of the deficit deal. Sen. Max Baucus (D-MT), chair of the Senate Finance Committee, and Sen. Patrick Toomey (R-PA) held a closed-door meeting this week, and Sens. Rob Portman (R-OH) and John Kerry (D-MA) are looking at a tax code overhaul. This week, 33 GOP Senators signed a letter asking for a package that includes a tax code redo, but with “no net tax increases,” and tied to entitlement program changes and the goal of balancing the budget in 10 years.
The Senate this week continued to try and move chunks of the President’s jobs plan after the full package failed to garner enough support, and it now appears part of the strategy relies on trying to marry the jobs bill with reauthorization of federal surface transportation programs. While the Senate’s version of the Obama jobs package relies heavily on infrastructure spending on highways and commuter systems and would spend about $60 billion—$50 billion on programs and $10 billion in seed money the President’s “infrastructure bank”—the Republican side of the chamber came out with a countermeasure that “fully funds the nation’s highways, public transportation and assorted other federal infrastructure projects,” but would set the cost current levels with an inflation adjuster for two years. The GOP plan would eliminate some programs, including bike paths, targets several EPA regulations, while ignoring the infrastructure bank idea. Meanwhile, Sen. Barbara Boxer (D-CA), chair of the Senate Environment & Public Works Committee, plans to markup her two-year federal highway reauthorization bill on November 9, with Senate Finance Committee Chair Max Baucus (D-MT) pledging to find the offsets necessary to control the bill’s $109-billion cost. Rep. John Mica (R-FL), chair of the House Transportation & Infrastructure Committee, said he wants a six-year bill, and House leadership this week said they’d pay for the expanded highway bill through levies on expanded oil and gas exploration. The oil-gas tax strategy is designed to overcome the challenge of funding a bill when federal gas taxes paid to the Highway Trust Fund are inadequate to meet the cost of the programs.
A bill to make sure EPA doesn’t decide to regulate farm dust as part of its mandate on air quality was approved this week by the House Energy & Commerce Committee on a straight party-line vote. The bill, authored by Rep. Kristi Noem (R-SD), says EPA must maintain the current standards on “coarse particulate matter,” known in rural areas as “farm dust.” Opponents of the bill argued that EPA Administrator Lisa Jackson has already committed to not tinkering with the air particulate rule so the bill is unnecessary. And while Jackson’s assurance was enough to back off Senate critics, Noem’s fear is that as long as the authority remains with the agency, EPA could change its mind. One amendment was accepted that clarifies the definition of “nuisance dust”—would not include dust from industrial combustion.
While it was expected federal government would meet a court deadline and publish new hours-of-service (HOS) truck driver rules by October 28, the new rules have yet to be reviewed by the Office of Management & Budget (OMB). Meanwhile, Secretary of Transportation Ray LaHood wrote recently to Sen. Kelly Ayotte (R-NH) urging her not to offer an amendment to the transportation appropriations bill that would prohibit the Department of Transportation (DOT) from spending federal money to finalize, enforce or implement the regulations. LaHood said the Ayotte amendment would prohibit DOT from using the most comprehensive and up-to-date information to set HOS rules, an assertion the American Trucking Assn. (ATA) said is inaccurate. “There is little or no comprehensive, up-to-date evidence, data or science” supporting the rulemaking,” ATA said. The trucking industry has criticized the rulemaking for changing hours of service from 11 hours to 10 hours, restricting the 34-hour restart provision and a reduction of daily on-duty hours from 14 to 13 hours.
The National Labor Relations Board’s (NLRB) “activist agenda” was targeted this week by the House Education & the Workforce Committee, as the panel approved on a party-line vote the “Workforce Democracy & Fairness Act,” a bill designed to “reaffirm important protections for workers and employers.” The bill is aimed at an NLRB rulemaking the board says will “streamline” the union election process in workplaces, but which critics say is designed to make it easier and faster for unions to organize non-union businesses and create “micro-unions” in certain workplaces. “The NLRB’s actions are wreaking havoc on American workplaces,” said committee Chair John Kline (R-MN), adding the approved bill gives employers time to prepare for union elections and talk to employees. The bill specifically gives employees assurances they will be able to participate in fair union elections; guarantees workers the ability to make a fully informed decision in a union election; reinstates the traditional standard for determining which employees will vote in a union election, and safeguards privacy by allowing workers to decide the type of personal information provided to a union. The National Association of Manufacturers (NAM) has filed suit in federal court against the NLRB on the proposed union election rulemaking, and filed this week a motion for summary judgment.