Budget Issues; Climate Issues; Farm Bill; Biofuels; and Political
Notes
Posted
By Keith Good On February 3, 2010
Budget: Reactions to
Executive Branch Agricultural Proposals
Bloomberg writer Alan
Bjerga reported earlier this week that, “U.S.
Department of Agriculture spending would rise 2.3 percent to $132.3
billion in fiscal 2011 as the
number of people receiving aid to buy groceries, the USDA’s biggest expense,
reaches records, the government said.
“The Supplemental Nutrition Assistance
Program, formerly called food stamps, will cost $75.3 billion in the year
starting Oct. 1, up 3.9 percent from this year, accounting for most of the overall increase,
according to the budget President Barack Obama sent to Congress today. Agricultural subsidies would fall 11 percent as the
administration tries to limit payments to wealthy farmers.
“A record 37.9 million
people, or about one of every
eight Americans, received food stamps in
October, as the jobless rate reached a 26-year high, the USDA said on Jan.
12. Participation in the program
that month was up 22 percent from a year earlier, setting a record for the 11th
straight month.”
Mr. Bjerga added that,
“Under the president’s plan, funding for the Commodity
Credit Corp., which makes farm-subsidy payments, would drop to $12.7
billion as income limits for eligibility are reduced by $250,000. Direct
paymentsmade regardless of crop prices would be restricted to growers with
farm incomes of less than $500,000, or non-farm income of less than $250,000.
“Similar ‘means tests’
were proposed in the previous
budget and rejected by the House and Senate agriculture committees,
which included the current requirements in the 2008 Farm Bill. House
Agriculture Committee ChairmanCollin
Peterson said Congress writes the budget, not the
president.
“Congress isn’t interested
‘in making cuts to the Farm Bill after the battles we just fought to pass it a
year and a half ago,’ the Minnesota Democrat said today in an e-mailed
statement. [Sec. of Agriculture Tom
Vilsack] said in response to Peterson’s comment that he was
willing to work with Congress on payment limits.”
Bob
Meyer reported yesterday at Brownfield that, “While there has been a
lot of reaction to President Obama’s FY2011 budget proposals regarding
agriculture, in the end it is Congress which writes the budget and House Ag
Committee chair Collin Peterson says there is no interest in re-opening the
farm bill to change farm program payments. ‘The minute we open any part of the Farm Bill it
unites all of the conflicts and we are back to basically rewriting the farm
bill.’ He says there is no desire on either side of the aisle to do that.
“Peterson told
Brownfield’s Ken Anderson the
proposed changes to crop insurance could be a different
story. The Minnesota Democrat thinks there could be some changes made to ‘get at some of the regional imbalances in terms of
profitability for companies and agents’ but he doesn’t agree with taking money
out of the base line. He says they took a significant amount of
money out of crop insurance in the
2008 Farm Bill and it would not be appropriate to take more out at
this time.”
Yesterday’s update also
included a portion of an interview that Brownfield’s Ken Anderson had with
Chairman Peterson yesterday. To listen to Chairman Peterson’s comments on the
budget from this discussion with Brownfield, just
click here (MP3-3:20).
Meanwhile, Iowa GOP
Senator Charles Grassley was a guest on yesterday’s AgriTalk Radio Program where
the president’s budget proposal was a topic of discussion. To listen to a brief
audio excerpt from yesterday’s AgriTalk program in which Sen. Grassley discusses payment limits and crop
insurance issues, just
click here (MP3-4:06).
Dan
Looker reported yesterday at Agriculture Online that, “The Obama
administration found a bit of support across the aisle for part of its USDA
budget proposals Tuesday. Senator Chuck
Grassley of
“Grassley
told reporters Tuesday that when it comes to lowering the cap on
direct payments, ‘I haven’t studied the impact of that. I think it could be a
negative. But it’s very much a positive on trying to tighten up payments to
higher income people.’”
Mr. Looker added that, “Grassley also had doubts about the Obama
administration’s plan to save $8 billion over 10 years by reducing the
reimbursement to crop insurance companies.
“‘I’m not saying some
money can’t be saved, but the policy I support is that we maintain a private
sector (delivery of insurance),’ he said. Grassley said he wants to make sure
that private delivery remains a reliable system. He doesn’t want to go back to
having USDA in charge of all compensation to farmers for weather losses. ‘I
think we’ve been successful at having 92% of
Yesterday’s Agriculture
Online article pointed out that, “The [administration’s] budget proposals are
also drawing opposition from
farm groups. The American
Soybean Association said Monday that it’s disappointed in proposals to
cut farm programs and eligibility for payments, as well as a proposed reduction
the Market Access Program, which supports export promotion.
“National Farmers
Union opposes
cutting as much from crop insurance as the administration proposes but
it supports its plan to increase funding for research.
“American
Farmland Trust objects to proposals to cut working lands conservation
programs by nearly 20%.”
The National Cotton
Council noted in a press
release from yesterday that, “The
National Cotton Council said today that President Obama’s FY2011 USDA budget
ignores the extensive changes to production agriculture support that were
embodied in the Food, Conservation, and Energy Act of 2008. In
addition, the NCC noted, USDA already has announced unwarranted restrictions in
program eligibility during the legislation’s implementation.
“NCC Chairman Jay Hardwick, a Louisiana cotton
producer, said, ‘The President’s
proposal on phasing down direct payments and limiting total payments affects
the farms that produce more than three-fourths of all agricultural products
marketed in the United States. The safety net for
A news
release issued yesterday by the Georgia Peanut Commission indicated
that, “The Georgia Peanut Commission
is encouraging Congress to reject the President’s Fiscal Year 2011 budget
proposals to eliminate storage payments for peanuts and payment limitation
reductions. Both the peanut storage payments and the compromise
language for payment limitations were part of the 2008 Farm Bill agreement.
“‘The current program’s
safety net does not cover all the costs associated with producing peanuts,’
says Armond Morris,
chairman of the Georgia Peanut Commission. ‘To eliminate a significant part of the peanut program in the middle of
a farm bill does not seem to be good agricultural policy. We
are hopeful that Congress will reject the president’s proposals. If approved,
this proposal would be devastating to American agriculture.’”
On the other hand, The
Washington Post editorial
board noted today that, “Any
sensible plan for fiscal discipline would address the billions of dollars that
the federal government lavishes each year on the Farm Belt.
And, sensibly, President Obama has proposed agriculture
subsidy cuts this year. His budget would reduce the cap on direct payments
from $40,000 to $30,000 per farmer and limit eligibility to farmers making
$500,000 a year or less from farming and $250,000 a year or less from other
activities. Ten-year savings: $2.3 billion. Also, the president proposes reducing federal crop
insurance subsidies by $8 billion over the next decade, which seems reasonable
since the Agriculture Department estimates that the companies engaged in this
taxpayer-backed business make an average annual return on equity of 17.1
percent.
“Now, before you get too
excited about this, bear in mind that both of these quite modest suggestions are
basically repeats of ideas that Mr.
Obama offered — and Congress rejected — last year. In fact, they are
reminiscent of proposals that his predecessor, George W. Bush, repeatedly
floated, without success. What’s more, Mr. Obama appears to be lowering his
expectations. Last year’s budget would have trimmed almost $10 billion from
direct payments for better-off farmers — five times more spending restraint
than this year’s budget seeks.”
The Post noted that,
“Business as usual is leading the United States down the road to financial
ruin. And the fatuous hypocrisy
of self-proclaimed deficit hawks who then go to bat for welfare to well-to-do
landowners is endangering us all.”
As the budget debate moves
forward, an update posted yesterday at C-SPAN Online stated that, “Hearings
began [Tuesday] on President Obama’s $3.8 trillion FY2011 budget proposal.
Office of Management & Budget (OMB) Dir. Peter Orszag appeared before the
House Budget Cmte., where members raised questions about the nat’l debt and the
budget’s projected deficits. Also, Treasury Sec. Timothy Geithner testified
before the Senate Finance Cmte. Committee.”
Climate Issues
An update
posted yesterday at CQPolitics stated that, “President Obama is slated
to speak to Senate Democrats on Wednesday during their annual issues
retreat, as the party struggles
to advance his agenda in a chamber where its majority is
about to shrink.
“The president, who on Jan.
29 addressed House Republicans at their retreat in Baltimore, will head down
Pennsylvania Avenue to the Newseum to address the Senate Democratic Caucus,
which will drop from 60 members to 59 next week when Massachusetts Republican
Scott Brown is sworn in.”
With respect to climate
issues, and “comprehensive” energy
legislation that the president called for in his State of the Union
address, Wall Street Journal writer Elizabeth
Williams reported today that, “President
Barack Obama said for the first time Tuesday that legislation that would
require industries to pay for emissions of greenhouse gases may need to be
separated from a more popular ‘green jobs’ bill in the Senate,
a maneuver that could kill what once had been one of the administration’s top
policy priorities.
“Answering
a participant in a town-hall meeting in Nashua who asked about green
jobs—those connected to renewable energy—and so-called cap-and-trade
legislation, Mr. Obama said, ‘The
only thing I would say about it is this: We may be able to separate these
things out. And it’s possible that that’s where the Senate ends up.’
“Until now, the Obama administration has refused to
entertain in public the idea that lawmakers might have to split up the climate bill.
The shift by the president is another sign that the White House is rethinking
strategy on big first-year agenda items such as health care and climate
legislation, after public dissatisfaction with its focus on those issues helped
cost Democrats their filibuster-proof hold on the Senate last month.”
Ben
Geman reported yesterday at The Hill’s Energy and Environment Blog
that, “In his State of the Union address last week, Obama called for a ‘comprehensive’ energy
and climate bill, and a White
House official last month said the administration isn’t
backing away from a combined energy and cap-and-trade plan.
“A White House spokesman reaffirmed Tuesday evening
that Obama supports moving climate and energy legislation as one package.
“But Obama suggested the
two elements could be separated at the town hall in Nashua, N.H.”
Mr. Geman added that,
“Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman
(I-Conn.) are trying to craft a compromise bill that includes greenhouse gas
limits and support for nuclear power, low-emissions coal technologies and wider
offshore drilling.
“But centrist Democrats wary of cap-and-trade – such
as Sens. Blanche Lincoln (Ark.) and Byron Dorgan (N.D.) – have pushed for the
Senate to take up energy
legislation the Senate Energy and Natural Resources Committee approved
in June, while shelving the emissions caps.”
Reuters writers Steve
Holland reported yesterday that, “‘It is accurate that we are still
working on precisely what carbon-pricing mechanism, what shape it will take,’
[Sen. John Kerry]
said, adding, ‘We know we need to
price carbon.’
“A Senate aide close to
the negotiations told Reuters that the goal was to get a bill ready for floor
debate by April,
after the Environmental Protection Agency conducts an economic analysis of
whatever compromise is produced.
“Meanwhile, independent
Senator Joseph Lieberman told Reuters that he, Kerry and Republican Senator
Lindsey Graham were ‘working to get to 60’ votes of support — the number needed
to bypass opponents’ procedural hurdles and approve major legislation.”
“Asked when the senators
might be able to unveil a compromise bill, Lieberman said, ‘Probably not before March.’”
Climate Issues: EPA
Regulations
Robin
Bravender of ClimateWire reported yesterday at The New York Times Online
that, “Battle lines were drawn yesterday as the chief Senate architect of the
U.S. EPA spending bill and state regulators backed a White House proposal to ramp up funding
for programs to curb greenhouse gas emissions, and congressional opponents
vowed to fight the agency’s efforts.
“‘I would support it,’
Senate Interior Appropriations Subcommittee Chairwoman Dianne Feinstein (D-Calif.)
said yesterday of President Obama’s suggested $43 million boost for EPA
programs to limit greenhouse
gases in fiscal 2011. ‘There’s no question about greenhouse gas
in my mind.’
“The White
House yesterday requested $56 million — including $43 million in new funding —
for EPA and states to curb greenhouse gas emissions through regulatory program.”
Yesterday’s article noted
that, “Sen. James Inhofe (R-Okla.),
ranking member of the Senate Environment and Public Works Committee, questioned
whether climate regulations would move forward or get stalled in court battles.
‘Until such time as the lawsuits are filed … there may not be anything to do,’
Inhofe said, ‘And so why fund
something that doesn’t exist? That, in my opinion, is premature.’
“Rep. Earl Pomeroy (D-N.D.) vowed
yesterday to fight during the appropriations process to remove any
funding that would go toward EPA climate regulations.
Pomeroy last
month introduced a bill that would strip EPA of its authority to
regulate greenhouse gas emissions unless the agency was provided explicit
authority to do so by Congress.
Bravender also reminded
readers that, “Sen. Lisa
Murkowski (R-Alaska) has launched a bid in the Senate to
effectively veto EPA’s power to regulate greenhouse gas emissions. She
introduced a disapproval resolution
last monthwith the backing of 36 Republicans and three moderate Democrats.
Murkowski is expected to seek a vote on the resolution, which requires 51 votes
to clear the chamber, next month.”
Climate Issues: EPA
Regulations- Chairman Peterson Weighs In
Eric
Roper reported yesterday at the Hot Dish Politics Blog (Minneapolis
Star Tribune) that, “There seems to
be little prospect of passing cap-and-trade legislation in the Senate this
year, and Rep. Collin Peterson is fighting hard against what is seen as an
alternative — having the EPA regulate greenhouse gas emissions.
“The Agriculture Committee
Chair, who voted for cap-and-trade in the House and then said he didn’t
support the bill, was one of
three lawmakers to introduce
legislation today prohibiting the EPA from regulating greenhouse gas
emissions.”
Mr. Roper noted that, “Why
is Peterson doing this? First, he has been one of the agency’s most
vocal critics. But another
possible motivation could be that if the EPA takes over the effort to curb
greenhouse gasses there is little chance they would include his exemptions for
agriculture.
“Earlier this year,
Peterson withheld his support for the cap-and-trade bill in the House until
Nancy Pelosi agreed to exempt agriculture from emissions caps and create a
special exchange that would allow farmers to profit from greening their
businesses.
“While most farm groups are firmly against
cap-and-trade legislation, they have praised Peterson for these exemptions.
Their primary concern remains that the bill will unfairly heap costs on farmers
by increasing energy prices.”
Recall that Ken Anderson of Brownfield interviewed
Chairman Peterson yesterday (entire
interview available here (MP3-14:00); to listen to the part of this
discussion that focused on climate change issues, click
here (MP3-3:09), and to listen to a portion of the Brownfield
discussion that highlighted EPA issues, click
here (MP3-2:57).
Farm Bill Hearings
Ken Anderson also discussed the next Farm Bill and upcoming Farm
Bill hearings with Chairman Peterson yesterday, to listen to this part of
yesterday’s Brownfield interview, just
click here (MP3-2:13).
Biofuels
Reuters writer Timothy
Gardner reported yesterday that, “U.S. environmental regulators are expected to issue new rules that
could fine tune targets for alternative motor fuels like grain-based ethanol
and advanced biofuels to be blended into the country’s petroleum mix.
“The rules, known as the
second Renewable Fuels Standard, or RFS2, may affect both ethanol made from
corn and advanced fuels like cellulosic ethanol, which companies have begun to
make from the tough bits of corn waste and non-food crops like switch grass and
poplar trees.”
The
Reuters article noted that, “The most controversial item the EPA is considering
under RFS2 is how to measure greenhouse gas emissions due to land use changes
from the expansion of food or biofuels croplands abroad caused by growing U.S.
biofuels, known as indirect land use change. The ethanol industry fears ILUC
could put some limits on production of transportation fuels made from grains.”
Political Notes
- “Former Indiana
Sen. Dan Coats plans
to announce Wednesday that he will challenge Democratic Sen. Evan Bayh in November, a
senior Republican official told
POLITICO.”
- “If the election were
held today, Sen. Blanche Lincoln [D-Arkansas]
would lose in a landslide, according to the latest
polling from Public Policy….The poll shows 33% of voters would pick the
Arkansas Democrat, while 56% would vote for Republican Rep. John Boozman. (From The Wall Street
Journal’s Washington
Wire Blog).
--
Keith Good
President
FarmPolicy.com, Inc.
(t) 217.356.2269
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