Washington Report for 6-8-12

By Steve Kopperud

Reid Blames GOP for “Wasted Week” as Farm Bill Finally Clears Process Hurdles; Senate Will Spend Almost all of Next Week on Farm Bill Debate

The Senate was supposed to be hip deep in Farm Bill debate this week, but only managed to clear the procedural hurdles to allow the Senate to take up the bill next week. On a 90-8 vote this week, the full Senate agreed to suspend general debate and move to formal floor consideration of the committee-passed and revamped bill, a process that took 72 hours under Senate rules. Senate Majority Leader Harry Reid (D-NV), frustrated with the “wasted week,” blamed the GOP for preventing the bill from moving forward by insisting on the formal cloture vote. With the House on district recess next week, the Senate is expected to spend almost all four workdays on the Farm Bill, but could suspend action and move to other matters over the next several days, returning to the Farm Bill as agreements on amendments are reached. Ag committee Chairwoman Debbie Stabenow (D-MI) continues to maintain that she has the 60 votes necessary for ultimate approval of the package, but floor amendments – some totally unrelated to the omnibus farm legislation – are mounting up with more than 30 filed by late this week. Stabenow told reporters this week that the unrelated amendments she’s seen will delay the Senate from finishing its work. Key is whether Reid can get Senate Minority Leader Mitch McConnell (R-KY) to agree to limit amendments to only those relevant to the Farm Bill and then set a finite number of amendments that can be offered. The first major floor battle will be over the commodity title. Southern producers, particularly rice and peanuts, are not happy with a new crop insurance-based price protection system in the bill, a program they say favors corn and soybeans and Midwest producers over southern interests. A bloc of southern Senators led by Sen. Saxby Chambliss (R-GA), former chairman of the ag committee, and Sen. Mary Landrieu (D-LA) have pledged to force the Senate to insert target prices and countercyclical payments back into the legislation. Chambliss and Landrieu have a dozen southern colleagues on their side, and some have gone so far as to threaten to vote against final passage of the bill by siding with fiscal conservatives who have targeted the bill as too expensive. Chambliss took to the Senate floor this week to tell his colleagues Stabenow and ag panel ranking member Sen. Pat Roberts (R-KS) have rejected all southern proposals to rework the commodity title to the benefit of rice and peanut producers. Chambliss said he hopes to “repair” what he called an “inequitable and unbalanced” Farm Bill through the amendment process. He said neither he nor peanut producers want to return to direct payments, despite media reports to the contrary and says any new approach must reflect price declines for some crops in recent years. Stabenow maintained the new Acreage Risk Coverage (ARC) proposal is not intended to reflect how much support crops received in the past, but rather is geared toward future needs based on acreage planted, not region or commodity. The second major battle will be to preserve the federal crop insurance program without significant spending reductions or re-invention. While ballyhooed as the backbone of farmer income protection, federal crop insurance costs have come under increasing fire in recent weeks. The Environmental Working Group (EWG) has targeted crop insurance premium subsidies – the federal government buys down the premium cost to a farmer by up to 60 percent as an “incentive” to buy crop insurance – calling for a $40,000-per-year cap on individual subsidies. 

Senate Farm Bill Floor Amendments Piling Up

More than 30 amendments to the 2012 Senate Farm Bill, expected to hit the floor next week, have already been filed as of June 8, with several more expected to be filed early next week, and some will be totally unrelated to agriculture. Sens. Tom Coburn (R-OK) and Richard Durbin (D-IL) say they’ll support an amendment to reduce federal crop insurance premium subsidies by 15 percent for producers with adjusted gross income (AGI) of $750,000 or more, and a separate amendment is expected from Sens. Jean Shaheen (D-NH) and Pat Toomey (R-PA) to codify the Environmental Working Group’s (EWG) proposal to cap the premium subsidies at $40,000 per producer per year. Sen. Ben Cardin (D-MD) will try to force conservation compliance to the purchase of crop insurance, and Sen. Kirsten Gillibrand (D-NY) is dedicated to restoring all funding cut from food stamps and will offer an amendment to put back $4 billion in ag committee cuts. She would use the savings from the Coburn/Durbin amendment, along with further cuts in the federal insurance program, to pay for restoring the food stamp benefits. She’s expected to battle Sen. Jeff Sessions (R-AL), who has filed several amendments to cut food stamp funding even more than the committee action. Another crop insurance amendment is expected from a group of southern Senators to cut overall crop insurance spending. Relevant amendments expected include one from a group of Midwestern Senators to include a bill approved last year by the full House and the Senate ag panel to fix the Environmental Protection Agency’s (EPA) National Pollutant Discharge Elimination System (NPDES) that forces farm chemicals used near water into double-permitting; Sen. John McCain filed an amendment to withhold all federal funding for ethanol storage construction or blender pump financing; Sen. Mike Bennett (D-CO) is expected to offer an amendment to remove language from the dairy title capping per-farm dairy production; Sens. Gillibrand and Olympia Snowe (R-ME) will offer an amendment to stabilize milk pricing by allowing producers to present milk price formulas to the U.S. Department of Agriculture (USDA) and eliminate Class III end-product milk pricing formulas; Sen. Charles Grassley (R-IA) may offer an amendment to ban packer ownership of livestock, and Shaheen, along with Sens. Richard Lugar (R-IN), Mark Kirk (R-IL), Dan Coats (R-IN), Durbin and Toomey, will offer an amendment to phase out sugar subsidies. Unrelated amendments expected to be offered include one from Sen. John McCain (R-AZ) to require the Secretary of Defense to provide to Congress a report on the national security consequences of not exempting the Department of Defense from mandatory spending cuts due January 1, 2013. Other unrelated amendments include a move by Sen. Rand Paul (R-TN) to cut off all foreign aid to Pakistan; an amendment by Sen. Frank Lautenberg (D-NJ) to fund a study on the links between sugary drinks and obesity, and Coburn is thinking about trying to add language that cuts off federal spending to national political party conventions. Sen. Dianne Feinstein (D-CA) will offer changes to the federal Egg Products Inspection Act backed by the United Egg Producers in an alliance with the Humane Society of the U.S.

White House Blesses Senate Farm Bill

Once the Senate voted overwhelmingly to proceed with floor action on the 2012 Farm Bill, the White House released a formal “statement of Administration policy” blessing the bill and the “bipartisan efforts” to enact the bill. The White House, singling out the bill’s likely “significant contribution to deficit reduction,” said, in a somewhat restrained fashion, the bill “includes needed reforms and savings … and should promote rural development, preserve a farm safety net, maintain strong nutrition programs, enhance conservation, honor our World Trade Organization commitments and advance agricultural research.” The White House included no criticisms of the bill in its statement.

Groups Call for Research Foundation in House Farm Bill, New USDA Trade Slot

More than 70 national agriculture, input and human/animal science organizations, including the American Feed Industry Association (AFIA,) this week sent a letter to House Agriculture Committee Chairman Frank Lucas (R-OK) and committee ranking member Rep. Collin Peterson (D-MN) urging them to include in the House Farm Bill a Foundation for Food & Agriculture Research (FFAR). At the same time, several of the same groups sent the ag committee leadership a letter asking them to create within the House Farm Bill a new U.S. Department of Agriculture (USDA) Under Secretary for Trade and Foreign Agricultural Affairs subcabinet slot. FFAR would supplement USDA’s conventional research, education and economics mission areas. The group said FFAR would “add to USDA’s portfolio of intramural and extramural research program that help solve current and future challenges facing agriculture” and bring “innovative technology from laboratory to the marketplace.” The 72 organizations said global demand for food and ag products makes the FFAR effort even more important to maintaining U.S. and global food, economic and national security. Establishing FFAR, the groups said, will generate new sources of funding for food and ag research by creating a structure for public/private partnerships and investments to further USDA’s research initiatives. The new USDA trade under secretary slot is needed because the needs of agriculture have shifted since 1978 when the current under secretary for farm programs and foreign agriculture job was created. The groups said the new slot will provide “a singular focus on trade and foster more effective coordination of transparent, rule-based trade policies in other USDA agencies.”

No Highway Deal Means Extension: Boehner

Ratcheting up pressure on House and Senate conferees on re-authorization of federal highway/waterway and commuter programs, House Speaker John Boehner (R-OH) this week warned conferees if a deal isn’t reached by the end of the month, he’ll move to extend existing federal highway programs for six months or possibly longer. Boehner rejected a shorter extension, giving proof to talk he does not want the highway negotiations to get in the way of other Republican House initiatives before November. Senate Environment & Public Works Committee Chairwoman Barbara Boxer (D-CA) and her ranking member, Sen. James Inhofe (R-OK) this week presented House conferees an offer to resolve differences on existing authorities between the Senate-approved two-year, $109-billion package and the House demand for a longer term re-authorization. Political issues, including fast-track approval of the Keystone pipeline, will be dealt with separately, Boxer said. Rep. Dan Mica (R-FL), chairman of the House Transportation & Infrastructure Committee, called the Senate offer a “positive step” and said he was hopeful his side of the table would respond to the Senate offer before the House goes out on a week-long district work period next week. The biggest hurdle for conferees is how to pay for expanded authorities in the face of a dwindling federal Highway Trust Fund. Also at issue is a House resolution that instructs its conferees to reduce FY2013 highway spending to levels supported by various excise taxes and fees, a move that amounts to cutting overall funding by one-third. The U.S. Chamber of Commerce opposes the House instructions saying it will cost “thousands of jobs.”

Creditor Status Filed by CFTC in MF Global Bankruptcy; Roberts Wants Safeguards

The Commodity Futures Trading Commission (CFTC) this week filed as a potential creditor in the bankruptcy of MF Global (MFG), filing as a “general creditor … in order to preserve all possible options” to recover the taxpayer costs of its investigation into the nation’s eighth largest bankruptcy. At the same time, Sen. Pat Roberts (R-KS) said he was pleased to hear MFG trustee James Giddens is contemplating possible legal action against former company management, saying, “When the music stopped playing, MF Global executives were caught without a chair. Apparently the firm’s contingency plan was to tap customer funds in order to avoid a doomsday collapse.” Roberts said he is committed – after all investigations are complete – to “working with regulators and customers to strengthen the safeguards around customer accounts and make sure those responsible are held accountable.” On the creditor filing, the CFTC said it moved on the creditor status because it needed to preserve its “restitution status,” and that its priority continues to be to work to claim funds for MFG customers. The commission stressed its claim for costs would not take precedent over customer claims. As of this week, 72 percent of the value of customer accounts has been received; the remainder has still not been located.

CFTC Spending Cut by House Appropriators

Drawing outrage from the commission chairman, the National Farmers Union (NFU) and Democrat appropriators who say the cuts will make it nearly impossible to implement Dodd-Frank financial protections, the House Appropriations Committee subcommittee on agriculture/Food and Drug Administration (FDA) this week approved FY2013 appropriations for the Commodity Futures Trading Commission (CFTC) that cuts the commission’s funding by $25 million, or 12 percent compared with FY2012. The approved spending level of $180 million is $128 million less than President Obama requested in his budget plan. Reuters reports that of the CFTC’s spending levels, no more than $25,000 can be spent in the coming fiscal year for consultations with foreign governments and regulators, and tells the CFTC to spend $32 million on information technology. The subcommittee also instructs the CFTC chairman to report to Congress with 30 days of enactment “a schedule of implementation and sequencing of all rules, regulations and orders” including cost/benefit analyses and studies, with particular emphasis on pending rulemakings on swap dealers, position limits and commodity trading advisor registrations. CFTC Chairman Gary Gensler said the bill does not provide enough money to the commission, saying the package “effectively puts the interests of Wall Street ahead of those of the American public.” Gensler said the commission’s new oversight authority on the $300-million swaps industry and a staff level just 10 percent higher than at its peak in the 1990s, argue for greater CFTC funding. The NFU said, “Now is not the time to be cutting from an agency that has an important role to play in preventing the next financial meltdown. Our economy needs stronger rules and more referees, not fewer.” 

Homeland Security Spending Bill Contains Immigration Actions

The House FY2013 appropriations bill on homeland security was approved this week by the full chamber animated debate centering on immigration actions included in the bill. The White House immediately threatened to veto the nearly $45-billion package, saying the bill does not comport with last year’s spending control actions, something it’s said about all House spending bills. At issue in the Administration’s statement of policy – the official “position” of the White House – are several provisions in the bill aimed at immigration proposals and current programs. The bill contains requirements for more Immigration & Customs Enforcement (ICE) “detention beds” than has been requested, and a limit on ICE’s ability to fund abortions for detainees. Also at issue was a requirement that at least $68 million be used to fund federal/state/local enforcement agreements, $5 million more than last year, and the House made the section even tougher by accepting an amendment that would block any spending by the Administration to terminate the enforcement agreements. The bill provides $91 million for alternative detention programs, including monitoring immigrants involved in deportation proceedings using electronic surveillance systems. Another amendment accepted would block funds from going to what supporters call “sanctuary cities,” urban areas which refuse to cooperate with federal immigration officers. Rep. Steve King (R-IA) successfully offered an amendment blocking funding to Administration programs that he called “administrative amnesty” because ICE pays priority attention to illegal immigrants it considers more dangerous, while spending less time going after illegals who may be attending college or in the military. Rep. Sam Graves (R-MO) successfully offered an amendment that would block funds to allow illegal immigrants to remain the U.S. with family members who are citizens while awaiting the outcome of petitions for waivers to remain legally, and another amendment blocking funds for ICE to provide “public advocates” for illegal immigrants was also accepted.

One-Year Extension of Bush Tax Cuts, Tax Incentives Pushed by GOP

Hoping to avoid a pre-election battle over tax reform and how much “the more fortunate among us” are paying to Uncle Sam, congressional GOP leadership this week said they want to see at least a one-year extension of the Bush federal income tax schedules, as well as a similar extension of a package of federal tax incentives that expired at the end of last year. House Speaker John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY) said the extension is necessary to avoid further interfering in a slowly recovering economy. McConnell said the extension will give Congress time to come to some sort of bipartisan meeting of the minds on broad tax reform. House Ways & Means Committee Chairman Dave Camp (R-MI) said his panel is working on legislation to extend the tax rates for a year, along with extending nearly 1,200 federal tax credits and other incentives – including blenders’ tax credits for biodiesel and renewable diesel – for a year but making the extension retroactive to January 1, 2012. The timing of the Republican announcement came immediately after statements by former President Bill Clinton who proposed this week a similar year-long extension of the Bush tax rates, which are set to expire January 1, 2013. Clinton said extending the tax rates “is probably the best thing to do right now,” though he balked at agreeing to permanent extensions, and now publicly regrets making his opinion known. However, despite Clinton’s remarks, many Democrats in both the House and Senate want to see an end to tax cuts for “the wealthiest Americans,” but can’t decide on how to define that status. Some contend tax breaks should end for those making $250,000 a year or more; others say the threshold should be $1 million a year. 

Latest House Energy Package is New “Jobs” Bill

Calling it the “Domestic Energy & Jobs Act,” House Republicans this week said they’ll repackage seven separate energy-related bills, an effort to “ease regulations and spur job growth.” All seven bills have been approved by committee. House Majority Whip Kevin McCarthy (R-CA) said the goal is to move closer to energy independence while creating new jobs, and pointed to North Dakota oil and gas development, an exploding industry that’s dropped that state’s unemployment rate to less than 3 percent. The plan was attacked by some Democrats who contend the move is simply a strategy to get around the Clean Air Act (CAA). House Minority Leader Nancy Pelosi (D-CA) called the package “a boon for big oil and the only jobs it will help are those of the oil CEOs.” Pelosi called on House Speaker John Boehner (R-OH) to cancel next week’s House recess and for leadership to pass a construction jobs bill being pushed by Democrats. The package includes a bill to mandate an increase in any oil/gas equivalent in any release from the Strategic Petroleum Reserve; a bill that would delay for at least six months new Environmental Protection Agency (EPA) rules on refinery emissions; a bill to require the Secretary of the Interior to develop a plan for energy production on public lands; a bill to bar the federal government from rescinding leases on federal lands for energy exploration and production; a bill to expedite permitting; a bill to set up live Internet auctions for Bureau of Land Management leases; and a bill to speed up the National Petroleum Reserve-Alaska. 

House Approves Carving Back EPA, Army Corps Water Authority

The full House this week approved FY 2013 Energy Department appropriations legislation that includes language to stop the Army Corps of Engineers and the Environmental Protection Agency (EPA) from extending their authority under the Clean Water Act (CWA). The action came after the House turned back a Democrat amendment to allow the Corps to complete a new definition of “navigable waters,” an action the Republicans said would extend CWA authority to “ponds, puddles and drainage ditches.” The Corps, working with EPA, is trying to respond to a 2001 Supreme Court decision – and a 2006 re-interpretation – charging them with protecting “remote wetlands” not connected to rivers, lakes and streams. 

USDA Economist Sees Lower Corn Prices on Record Crop

Anticipating record 2012 U.S. corn production and despite “steady demand from ethanol producers,” the U.S. Department of Agriculture’s (USDA) chief economist sees continuing downward pressure on corn prices. With U.S. corn production forecast at a record 14.79 billion bushels, global supplies will increase, said USDA’s Joe Glauber at the International Grains Council’s London conference this week. Consumption of ethanol will likely be relatively unchanged because high prices have stemmed overall fuel demand and U.S. corn-based ethanol no longer enjoys federal tax incentives. The rebuilding of stocks coupled with flat ethanol demand will “bring down corn prices significantly,” Glauber said, but acknowledged prices will remain relatively high. USDA releases its updated world supply/demand forecast on June 12. 

Judiciary Committee Says “Yes” to Enviro Review Deadlines

The House Judiciary Committee this week approved legislation to set deadlines for federal agencies to complete environmental impact studies of propose project development. The approved bill would give agencies one year to file environmental assessments before a project can break ground as required under the National Environmental Policy Act (NEPA), and two years to file more extensive environmental impact statements.

EPA Releases Ammonia IRIS Assessment for Public Comment

A draft Integrated Risk Information System (IRIS) health assessment for ammonia was released this week by the Environmental Protection Agency (EPA) for 60 day’s public comment, after which it will be sent to independent peer review. Ammonia, EPA said, is used in agricultural fertilizers, pharmaceuticals, water purification, household cleaners, refrigerants and in several industrial processes, and studies have shown it can affect the respiratory system. The draft IRIS assessment includes an estimate of the “safe level” of ammonia a person can inhale during a lifetime, a level “less stringent than the current value for ammonia on IRIS.” Details of the assessment can be found at http://cfpub.epa.gov/ncea/iris_drafts/recordisplay.cfm?deid=200305.

NASS Sends Out Three “Core” Surveys

Three “core” surveys have been sent to thousands of farmers and ranchers across the country by the National Agricultural Statistics Service (NASS) in an effort to update the numbers reflecting how farmers use their land and what ag activities they conduct. NASS is collecting data on crops, livestock and economic data through three simultaneous surveys. NASS expects to release the collected data in a series of reports on June 29, including acres planted and acres harvested for various crops; grain stocks on hand, and hogs and pigs inventory. The data collected in the surveys is protected by federal law. More information on the NASS surveys can be found at www.nass.usda.gov/Surveys.