A full House Agriculture Committee hearing ostensibly to review “the state of the rural economy,” with Secretary of Agriculture Tom Vilsack as the sole witness, turned quickly into a bipartisan three-hour wrangle between Vilsack and committee members over the impact of sequestration on programs under his control and allegations the U.S. Department of Agriculture did not properly plan for the spending cuts. The hearing zeroed in on the $1.95 billion in cuts that fall on USDA for FY2013. The President has taken heat for allegedly “overstating” the impacts of sequestration; Vilsack said early on he’d have to furlough government meat inspectors effectively shutting down the meat industry, which drew immediate challenges from the meat and poultry processing industries. However, the secretary now says meat inspectors would absorb up to 17-22 days of furlough and the effects of that action “won’t be felt for months.” The Administration also came in for criticism for not requesting that Congress give agencies and departments “reprogramming authority” to allocate appropriated funds within programs to lessen the impact of the cuts, but Vilsack stood his ground saying “it would be helpful if Congress would put together a Farm Bill and pass it.” He reiterated he does not currently have the discretion to determine how sequestration cuts are made and he must apply the reductions proportionally to all programs. “The reality of sequestration is it does not allow you to prioritize,” the secretary said. On planning for the cuts, he said he couldn’t act on the cuts until the President formally signed the order March 1, and Vilsack said his hands are further tied by requirements of various USDA contracts with labor unions. The secretary emphasized he’s using flexibility where he can find it to “ensure we apply (cuts) in the most equitable and least destructive way.”
Having failed to come up with a way to avoid sequestration – those March 1 mandatory across-the-board federal spending cuts – Congress appears willing to leave the cuts in place as it moves ahead with avoiding a full government shutdown on March 27 when the current funding measure expires. President Obama is slated to head to the House this week for a meeting with Republican members, House Speaker John Boehner (R-OH) calling Obama’s visit “a hopeful sign.” House Minority Leader Nancy Pelosi (D-CA) said the visit is an issue of the President “being too accommodating of the GOP.” Meanwhile, the House approved its $984-billion continuing resolution to keep the federal government operating through September 30 at FY2012 levels. The bill’s cost is less than the $1.043-trillion budget cap because it includes the sequestration cuts. This package contains the 2.5 percent general cuts to federal spending mandated by the Budget Control Act, but provides new FY2014 funding for the Department of Defense, military construction and veterans affairs. House Democrats criticized the measure for not including spending increases in other accounts, including financial services, health care, Women Infant Children nutrition and drug enforcement, while some House Republicans were disappointed the bill did not contain language banning federal spending to implement the new health care law. On the Senate side, new Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD), said she’ll unveil her committee’s plan on March 11, a package expected to include the House language, but expanding the bill to include new funding measures for agriculture/Food and Drug Administration, Homeland Security, Commerce and Justice Department spending, as well as expanded science funding. The Mikulski package will also contain “reprogramming authority,” flexibility to departments and agencies to move appropriations money around within their budgets to blunt some impacts of sequestration and prioritize other spending areas. While Boehner warned the Senate not to “overload” its continuing resolution lest it fail when it returns to the House, Mikulski purposely picked her additional spending add-ons because Senate GOP colleagues indicated they were noncontroversial. She stopped short of including an increase in transportation funding because of inter-party squabbling in both chambers.
The Congressional Budget Office’s release of its most recent cost estimates – the Farm Bill “baseline” – on a 2013 omnibus ag bill show savings achieved in 2012 by both the Senate-passed Farm Bill and the House Agriculture Committee’s approved version are dropping as Congress gets ready to re-engage on a five-year re-authorization of farm programs. The overall savings reductions have complicated House and Senate committee efforts to draft a new Farm Bill. Sen. Mike Johanns (R-NE) was surprised the Senate bill didn’t score close to what it did last year as he expected, saying the committee will have to find $10-15 billion in additional savings. The new score also forced ag groups back to the drawing board on some of their 2012 proposals, as several have higher price tags – including far-reaching dairy program reforms – or were predicated upon savings significantly greater or which no longer exist under the new CBO score. This is the reality farm groups predicted when Congress failed to re-authorize a comprehensive Farm Bill last year. However, at the Commodity Classic in Florida, almost all national farm and commodity groups re-affirmed their previous overall farm bill positions with only slight modification. The Senate Agriculture Committee’s 2012 bill was scored at saving about $23 billion; the House ag panel bill was estimated to save about $35 billion. The Senate bill as passed was rescored to save about $13.1 billion, with the House version’s savings reduced to $26.6 billion. Part of the Senate’s “lost savings,” i.e. higher program costs, comes from CBO’s estimate the new Agriculture Risk Coverage program will cost about $3.8 billion over 10 years due to slightly higher commodity prices. The dairy cooperative’s Margin Protection Program saw savings shaved and cost increase due to lower milk prices, and livestock disaster assistance costs are projected to increase due to the lingering drought. The re-evaluation of House savings is similar, with CBO saying crop insurance would cost $1.4 billion more due to higher participation in the Price Loss Coverage program in the House bill, as well as House language making more producers eligible for the Supplemental Coverage Option.
President Obama as expected nominated Gina McCarthy to head the Environmental Protection Agency. In addition, Ernest Moniz, an MIT professor, has been nominated to head the Department of Energy. Sylvia Mathews Burwell was nominated to head the Office of Management & Budget, and REI executive Sally Jewell was nominated to be secretary of the interior. McCarthy, formerly head of Connecticut’s Department of Environmental Protection and currently EPA’s assistant administrator for air and radiation, has worked for both Republicans and Democrats, and is seen as a strong voice for the President’s climate change initiative that may include strong EPA regulation of large emitters of greenhouse gases. She led the agency effort to cap power plant emissions, as well as tougher standards on mercury and soot pollution and greater fuel efficiency standards for cars and trucks. Moniz is a physics professor who formerly served as undersecretary of energy during the Clinton Administration. The White House said Moniz supports the President’s “all of the above” alternative energy approach, but he’s also drawn fire from clean water activists because of his support over time for fracking to access natural gas and oil shale reserves and as an advocate for nuclear energy. Jewell, who faced tough questions during her confirmation hearing because of her time on the board of the National Parks Conservation Association – which has sued the federal government multiple times to stop energy exploration and exploitation on federal lands and over her previous support for cap-and-trade legislation – is a former oil industry engineer and worked in banking before moving to REI. Burwell, head of the WalMart Foundation and a former executive of the Gates Foundation, was deputy director of OMB during the Clinton years.
Sen. Debbie Stabenow (D-MI), chairwoman of the Senate Agriculture Committee, and committee ranking member Sen. Thad Cochran (R-MS), released a joint letter calling on “stakeholders and the public to make recommendations on re-authorization of the Commodity Futures Trading Commission (CFTC).” Stabenow promised the letter and invitation during last week’s committee oversight hearing on commission re-authorization at which CFTC Chairman Gary Gensler testified. The letter invites interested parties to send their recommendations on CFTC re-authorization to the committee by May 1 at cftcreauthorization@ag.senate.gov. The suggestions will be made public. “This year’s re-authorization comes at an important, but challenging time. Domestic regulators like the CFTC continue to implement the Wall Street Reform & Consumer Protection Act (Dodd-Frank), and to work to harmonize that legislation globally. These markets are evolving rapidly and face extraordinary regulatory and market pressures. The unacceptable failure of companies like MF Global has raised questions about how better to protect customers,” the Senators said. The full letter can be found at www.agriculture.senate.gov.
The House saw a group of bipartisan supporters introduce H.R. 935, “The Reducing Regulatory Burdens Act,” a bill that once again tries to make clear to the Environmental Protection Agency that it was never Congress’ intent to force pesticide applicators to get a Federal Insecticide, Fungicide & Rodenticide Act (FIFRA) NPDES permit for pesticides used on or near water if the product is already FIFRA registered. The full House approved a fix to the double-permit problem in 2011, and the Senate Agriculture Committee approved almost identical language to the House fix. However, Sen. Barbara Boxer (D-CA), chairwoman of the Environment & Public Works Committee, blocked floor action on the ag panel’s bill.
A bill to give states the authority to allow 97,000-pound trucks with six axles and additional braking power access to sections of interstate highways within their states was re-introduced by Rep. Mike Michaud (D-ME) and Rep. Reid Ribble (R-WI). H.R. 612 – the Safe & Efficient Transportation Act – seeks to allow heavier, but not longer, trucks on sections of interstate highways which now carry an antiquated 80,000-pound weight limit. The current federal weight limit forces shippers to put trucks on the road with less-than-truckload shipments, requiring more trucks, more fuel, more emissions and greater wear and tear on roads and bridges, SETA supporters say. The Coalition for Transportation Productivity, made up of more than 200 associations and companies, saw the bill in the last Congress turned into a study due to heavy railroad opposition, a move condemned by CTP which points to several domestic and international studies showing heavier trucks are as safe or safer and provide no greater wear and tear than other conveyances. Rails contend allowing heavier trucks on interstate highways will cost them freight customers. CTP also points out that Canada, Mexico, Europe and Asia already allow 97,000-pound trucks on their highways, making U.S. shippers less competitive, particularly in North America.
Sen. Al Franken (D-MN) sent a letter to President Obama detailing what the Minnesota Senator referred to as the “rail monopoly problem.” Franken contends the Surface Transportation Board is trying to apply the outdated Staggers Rail Act of 1980 to the rail freight industry which does not enjoy the competition it did 35 years ago. “There are very limited opportunities for rail-dependent shippers to have access to more than one major railroad,” Franken wrote. Franken pointed out the problem is limited competition, but also “the discredited and burdensome procedures by which rail customers without access to transportation competition can challenge rail rates for being excessive.” A copy of the Franken letter can be found at www.franken.senate.gov/?p=press_release&id=2308.
Rep. James Sensenbrenner (R-WI) re-introduced legislation to repeal the Environmental Protection Agency’s waiver decision allowing for gasoline to be blended with up to 15 percent ethanol (E15), up from the previous 10 percent limit. His bill would also repeal agency authority to grant any similar action until it seeks an independent scientific analysis of the effects of the E15 on vehicle engines and emissions systems. He said in a “dear colleague” letter sent to all House members that EPA has “dismissed safety, durability, performance and environmental concerns,” and these concerns must be investigated “before we can allow this fuel to move forward.” Sensenbrenner said the agency is also ignoring its responsibility to ensure “citizens are not put at risk by a faulty fuel that has not been thoroughly vetted.” He contends the agency has ignored multiple studies provided by engine and vehicle manufacturers, instead relying on a single study conducted by the Department of Energy.