In the wake of a partial government shutdown, the looming Oct. 17 federal debt ceiling deadline and a desire to “fix” the sequester requirements of the current spending law, the House will try to tie all three into the same legislative package, or what some are calling “the grand bargain.”
There was no word on the timing of this scheme, indicating the federal government shutdown will last at least into this week. The last government shutdown was 17 years ago, lasting three and a half weeks.
Senate Majority Leader Harry Reid (D-Nev.) reiterated his call to House Speaker John Boehner (R-Ohio) that the House pass a “clean” continuing resolution (CR) – just dollars – to reopen the government and then begin negotiations on a broader slate of financial issues.
Secretary of the Treasury Jack Lew reiterated his warning that the nation’s borrowing ability expires on Oct. 17, when the Treasury reaches its debt ceiling. Lew restated his warning from September that, without an increase, the nation will default on some obligated debt, cut off entitlement payments, risk a recession, and trigger a 2008-like economic crisis.
After a series of unsuccessful attempts by the House to link defunding or delaying Obamacare to a short-term CR through Nov. 15, about a third of the federal government shutdown at 12:01 a.m., Oct. 1. With about 800,000 federal workers furloughed, the House passed several bills to fund specific agencies and departments within the government, but the Senate refused to go along.
President Obama, who over the last weeks has refused to enter discussions over the CR if defunding or delaying the Affordable Care Act was part of the negotiations, invited the four House and Senate leaders to the White House Oct. 2 to discuss the shutdown as well as the approaching federal debt ceiling deadline. Reports indicate the White House meeting was unproductive.
Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, has been tasked by House Speaker John Boehner (R-Ohio) to quietly draft the broader legislation. Ryan has been polling his GOP colleagues on what spending and entitlement concessions from the Democrats they want to see if the House is to approve an increase in the debt ceiling as well as a short-term CR. Ryan also sees an opportunity to include what he calls “revenue-neutral” changes to the tax code. Overall, the plan is to horse trade dollar-for-dollar increases in the debt ceiling for decreases in overall spending and repairs that the GOP believes are necessary to entitlement programs. Several items for inclusion in the House plan have been talked about, but a list is not final. One GOP staffer called this strategy “a path to balance.”
GOP leaders believe Democrats so dislike mandatory sequestration cuts and fear inaction on the debt ceiling in the wake of the CR fiasco that they may strike a spending-cut deal with GOP demands simply to see those deeper cuts disappear. Senate Majority Whip Richard Durbin (D-Ill.) told Congressional Quarterly that the CR and debt ceiling are “now all together.” “We need to fund not only the funding of the government, but also make sure we stand behind our economy and the full faith and credit of the U.S.,” Durbin said.
The 2013 Farm Bill continues to languish despite a move by the Senate to spur action. The House-passed bill, including the stand-alone nutrition bill approved by the House, has been formally conveyed to the Senate, Senate Majority Leader Harry Reid (D-Nev.) renamed his conferees, sent the bill back to House and requested a conference.
However, House Speaker John Boehner (R-Ohio), who pledged to name conferees the “sooner the better” after the House passed its nutrition bill, has not acted. At the same time, Reid is now pushing to include in any broader budget agreement, action on a “final savings figure for farm programs.”
Secretary of Agriculture Tom Vilsack told an industry audience that the United States Department of Agriculture is struggling in the wake of the government shutdown – which has left the department almost silent because it cannot issue scheduled reports – because he has no Farm Bill and no immigration bill. He urged his audience to become “citizen patriots” and urge Congress to reauthorize USDA programs and authorities quickly.
Rep. Collin Peterson (D-(Minn.), ranking member of the House Agriculture Committee, said that the path forward on the Farm Bill is “unclear,” and he believes it will be the end of October before conferees are named. Nevertheless, some outside observers now contend the commodity and nutrition titles of the respective chamber bills may be “irreconcilable,” according to one academic. This could signal action to extend the just-expired 2008 Farm Bill authorities for at least a year and possibly two years. However, Reid has said he will not entertain an extension that does not kill off direct payments, a move ag groups say will suck $20 billion in savings out of the bills, leaving no money to fund new programs or reinvention authorities. Nevertheless, 28 Senators sent Reid and Senate Minority Leader Mitch McConnell (R-Ky.) a letter telling them any extension must contain an end to direct payments.
Meanwhile, members of Congress, along with farm and agribusiness groups with a stake in getting a new Farm Bill into law, continued their battle of press releases. The National Farmers Union has called on House leadership to name conferees immediately. The American Soybean Association said in a press release “Congressional gridlock has cost farmers yet again. We demand a stop to the political gamesmanship. It’s time for our elected officials to remember who they represent.” At the same time, 28 members of the International Dairy Foods Association, representing the dairy processing industry, sent a letter to Senate Farm Bill conferees and others urging them to accept the House dairy provisions because it does not include a production limit.
The fourth hearing in the House Agriculture Committee subcommittee on general farm commodities and risk management, prior to formal reauthorization action on the Commodity Futures Trading Commission, gave futures market players an opportunity to tell the subpanel that pending market protection rulemakings will harm the very people they’re designed to help.
In a related event, CFTC Chairman Gary Gensler announced he will not serve as commission chairman past Dec. 31. In other CFTC news, commission enforcement chief David Meister announced he’ll leave the commission to join a university faculty.
The CFTC moved quickly in the wake of the MF Global and Peregrine Financial Group bankruptcies to implement rules and recommendations from industry on how to better protect traders and their customers from such disasters. The groups testifying said, however, one part of a pending customer protection rule would drastically reduce the timing margin call payments must arrive at future commission merchants (FCM) from the current three days to one day. The same rule changes the definition of “residual interest” or the use by FCMs of their monies to cover margin calls until payments arrive, requiring all customers to be completely margined at all times. The National Grain and Feed Association told the subcommittee such actions increase customer risk. The CME said the residual interest rule is unnecessary to protect customer funds.
Several House Committee members sent a letter two weeks ago to the CFTC echoing these concerns. Several ag groups also sent a letter to the commission detailing their concerns.
For Gensler, his announcement confirms what’s been widely known in the industry for several weeks. His term ended in early 2013, and he can stay through the end of the year or until Congress confirms his replacement. The White House asked Gensler to accept a second term as chairman, but he has rejected the request.
A letter was sent by six Senators on the Environment and Public Works Committee to Gina McCarthy, head of Environmental Protection Agency, asking her to stand down on efforts to “clarify” agency jurisdiction under the Clean Water Act through rulemaking.
“We are concerned that EPA created ambiguity regarding the status of the agency’s 2011 draft guidance on CWA jurisdiction … we request that EPA immediately and public instruct agency and Army Corps of Engineers personnel and field staff that the draft guidance may not be used or relied on in making CWA jurisdiction determinations,” the letter said.
At question is EPA’s highly controversial move in 2011 to expand through a guidance document its CWA jurisdiction beyond traditional “navigable waters” to include bodies of water, regardless of size or location, that are not directly connected to navigable streams, rivers and waterways. This led to fears of farm pond regulation, runoff authorities and intrusion on private property.
The Senators contend EPA’s withdrawal of the draft guidance was done “quietly” and does not adequately inform stakeholders of the implications of the withdrawal. The six said the agency’s claim “leads to questions on what exactly the draft’s ‘withdrawal’ means and when precisely ‘withdrawal’ takes effect.”
The ultimate request of the Senators is that EPA “formally announce to the public and to EPA and Corps field personnel no later than Oct. 9, 2013, that the draft guidance is withdrawn and that the draft may not be used or otherwise relied on when making CWA jurisdictional determinations.” Failure to comply, they said, stands as evidence the agency will “improperly rely” on the draft guidance during rulemaking.
Continuing their battle to adequately fund the Waterways Trust Fund even if it means they must pay higher fuel taxes, the Waterways Council – representing barge operators – told House Ways & Means Committee leadership it wants a 6- to 9-cent per-gallon increase in the federal fuel taxes they pay to help cover costs of maintenance and construction of waterways, locks and dams.
The council is supported by a coalition of agriculture, business and labor organizations. In their letter to committee Chairman Dave Camp (R-Mich.) and ranking member Rep. Sander Levin (D-Mich.), they said waterways interests need the two lawmakers’ support to include the fuel tax increase in the House waterways bill approved in the Transportation & Infrastructure Committee.
The council has turned its attention to the tax writing committee because the authorizing committees in both the House and Senate refused to include the fuel tax increase in their respective bills. Both panels told the council that while they sympathize, only the Ways & Means Committee and the Finance Committee in the Senate can authorize the increased federal tax.
With the new session of the U.S. Supreme Court opening, chemical industry advocates are optimistic the high court will consider reviewing the Environmental Protection Agency’s rulemakings on curbing greenhouse gases.
Nine petitions have requested the court reverse parts of a June 2012 appeals court decision supporting EPA’s moves to regulate GHG emissions as part of the administration’s broader climate change initiative. The nine petitions carry support of more than 80 “interested parties,” increasing the odds the courts will review at least portions of the decision.
In addition to the petitions, 17 states have enlisted in the effort to get Supreme Court review, versus 12 states which supported the appeals court action. Four justices must vote in favor of the review, the same number which dissented in a previous Supreme Court ruling on GHG regulation.
A letter was sent to Congress that called for a repeal of the Renewable Fuel Standard, carrying the signatures of 23 social, tax reform and other groups ranging from Americans for Tax Reform to the Independent Women’s Voice to Congress on Racial Equality.
The letter is the latest salvo in the ongoing battle over the future of the RFS, the federal mandate on how much biofuel must be blended on an annual basis with gasoline. The House Energy & Commerce Committee continues a task force effort, in cooperation with the biofuels and ag industries, to find ways to change the RFS to make it less onerous on food and feed production.
The letter tells Congress of the “unintended consequences” of the RFS, including higher fuel and food prices and increased damage to the environment, calling the RFS a “horrifically bad idea.”
With the House leadership’s statements about autumn floor action on immigration reform, the White House is gearing up for a major legislative push this fall, and House Democrats introduced legislation to grant a path to citizenship for illegal immigrants.
However, the continued battles over federal spending, the debt ceiling and sequestration will likely push that schedule back, causing a growing number of observers to contend it won’t be until 2014 before the House acts on its first immigration reform bill.
The House bill very closely mirrors language included in the Senate-passed omnibus immigration reform package. For farm workers, the bill would create a new immigrant visa status called a “blue card” which replaces the H-2A guest worker program. To qualify, a worker must have done at least 575 hours or 100 work days of ag work during a two-year period ending Dec. 31, 2012. Background checks are required, as are penalties. Blue card holders would get permanent resident status after five years if they pay taxes, fines and continue to work in agriculture. After five more years, they could apply for citizenship. Workers could move among employers by obtaining a W-2 visa for contract workers or a W-3 visa for at-will employees. Visas would be valid for three years and renewable for another three years. All employers would be required to use the E-Verify system.
The House Judiciary Committee approved its own ag guest worker bill in June. It replaces the current guest worker visa program with a new H-2C visa program, would allow up 500,000 temporary ag workers into the country each year, and those workers can stay for up 18 months.
CSX Transportation is the top performing railroad when it comes to grain shipping, according to the fourth annual Soy Transportation Coalition Railroad Report Card. Union Pacific, which held the top spot in 2011 and 2012, fell to second, and the Norfolk Southern Railway came in third. Canadian Pacific came in dead last among the seven Class I railroads for the third year in a row.
The anonymous survey is completed by ag shippers of “various sizes and scale of operation” and is comprised of 11 questions, unchanged since the first survey. Categories of questions include on-time performance, customer service and costs.