Congressional Agenda; Trade; Climate Issues; Biofuels; NAIS; and Ag
Economy
Posted By Keith Good
Congressional Agenda; Trade; Climate Issues; Biofuels; NAIS; and Ag
Economy
Congressional Agenda
Lori
Montgomery reported in today’s Washington Post that, “Congress
agreed Thursday to revive the pay-as-you-go budget rules that helped
wipe out massive deficits and balance the budget during the Clinton
administration, although the new version includes a long list of exceptions
that would permit Democrats to add at least $1.5 trillion to the nation’s tab
over the next decade.
“The House voted 233 to 187 to approve the rules, known in congressional
shorthand as paygo. The rules were adopted
last month by the Senate and now go to President Obama for his signature.
“The return to paygo comes as record
deficits push the government more deeply into debt than at any time since the
1950s. Democrats attached the new rules to a must-pass measure that
raises the legal limit on government borrowing by a record $1.9
trillion. With the public debt expected to hit the current cap by next
week, the increase — which was approved on a separate vote, 217 to 212 —
authorizes the Treasury Department to continue borrowing to cover the nation’s
bills through early next year.”
The Post article added that, “Obama
praised the legislation’s passage. ‘PAYGO would hold us to a simple
but bedrock principle: Congress can only spend a dollar if it saves a dollar
elsewhere,’ he said in a statement. ‘Mandatory spending increases and tax cuts
must be paid for; they’re not free, and borrowing to finance them is not a
sustainable long-term policy.’
“The revival of paygo is part of a
three-step strategy for tackling the nation’s budget problems. Obama
has also pledged to freeze non-security spending for three
years and to create a bipartisan commission to come up with a
plan for reducing projected budget deficits.”
An update
posted yesterday at CQPolitics.com reported that, “Senate Democratic
leaders said Thursday they will try to move jobs-focused legislation to
the floor next week that would likely include business tax breaks and
the extension of numerous economic stimulus measures that are set to expire.”
Alexander
Bolton reported yesterday at The Hill Online that, “But [Sen. Majority
Leader Harry Reid (D-Nev.)] and other leaders
declined to discuss key details, such as how much the package would cost, how
many jobs it would create and how it would be paid for. Reid had yet to secure
a Republican co-sponsor for the package.”
With respect to the jobs issue, Rebecca
Smith reported yesterday at The Wall Street Journal Online that, “The
U.S. could add hundreds of thousands of jobs if Congress requires that part of
the nation’s electricity be derived from renewable sources, according to a
study released Thursday.
“The study, by Navigant Consulting, said a renewable-energy standard
requiring utilities to produce between 20% and 25% of their energy from wind,
solar and other renewable sources would create between 191,000 and 274,000 jobs.
“More than half would be high-value manufacturing jobs that could help the
U.S. boost exports and develop an advantage in technological
innovation, said Navigant, a business consultancy that conducted the study for
the RES Alliance for Jobs, a consortium of renewable-energy companies.”
Trade
Helene
Cooper reported in today’s New
York Times that, “The administration on
Thursday unveiled its new strategy to make good on President Obama’s promise to
double American exports in the next five years. The approach included
pledges to pursue more trade agreements, increase pressure on trading partners
to open markets and the creation of an export promotion cabinet.
“But in announcing the new strategy [transcript,
video],
the commerce secretary, Gary Locke, did not say when the administration
might send Congress three completed free-trade accords — with Colombia, Panama
and South Korea.
Many trade specialists say that is essential to prod other countries to
negotiate with the United
States. But the move is likely to cause a
rift with Mr. Obama’s liberal supporters in the Democratic Party, as well as
free-trade opponents in the Republican Party.
“Still, many trade specialists nonetheless welcomed the new
strategy, particularly, they said, because it was the first time that the Obama
administration had embraced trade liberalization vigorously.”
The Times article added that, “Treasury Secretary Timothy F. Geithner told a House budget hearing on Wednesday that the
administration ‘absolutely’ planned to make passage of the three trade
pacts part of the new export strategy this year. ‘It’s not just that,’
Mr. Geithner said. ‘We want to be in the game in Asia as they move to negotiate new agreements there.’”
Darrell
A. Hughes reported yesterday at The Wall Street Journal Online that, “U.S.
President Barack Obama wants the Export-Import Bank to increase export
financing for small- and mid-sized businesses and is proposing that the amount
of credit available be increased to $6 billion in the next
year, Commerce Secretary Gary Locke said Thursday.
“The proposed increase from $4 billion is part of Obama’s plan to
double exports over the next five years, an effort being organized by
the Commerce Department.”
And Philip
Brasher pointed out yesterday at the Green Fields Blog (The Des Moines
Register) that, “Locke offered little new as far as agricultural
exports specifically. He noted that the president’s budget proposes an
additional $54 million for export promotion. The department wants to hire more
staff overseas to talk up U.S.
products.
“At the same time, however, the budget would slash the Market Access
Program that subsidizes private promotional programs. The program
is especially popular with fruit and vegetable producers and has subsidized
marketing campaigns for everything from asparagus to wine. (The Wine Institute
is getting $7 million this year.) The White House budget office questions
whether the program is really effective, but Congress rejected Obama’s
attempt to cut the program last year.
“By the way, Agriculture Secretary Tom Vilsack emphasized earlier
this week at a budget briefing with reporters that the president was not promising
to double agricultural exports, which totaled nearly $97 billion last
year.”
The Los Angeles Times editorial
board indicated today that, “It has taken the loss of 4 million jobs in one
year and a nationwide unemployment rate of 10% for President Obama to finally
take a firm stand on the economic benefits of free trade.”
The LA Times opinion piece added that, “Of course, doubling annual exports
to between $2 trillion and $3 trillion in such short order is a tall order, and
it is almost impossible to see how the goal can be met without action on the
three pending free-trade agreements. Ratification would add an
estimated $15 billion annually in exports, and the deal with South
Korea is particularly important for California agriculture; exports of dairy,
almonds, walnuts, pistachios and pomegranate juice could hit the $1-billion
mark in the next few years. Continued inaction, by contrast, would
endanger several hundred thousand jobs, according to the U.S. Chamber of
Commerce. Also, the president seemed to contradict himself by being both
populist and pro-trade, urging taxation of companies that move jobs overseas —
that threat is a favorite, but those companies also account for 44% of the
nation’s exports. It’s unclear how penalizing them
will help meet the president’s goal.
“Still, Obama’s positive tone is welcome.”
In other trade news, Reuters news reported yesterday (article posted at DTN,
link
requires subscription) that, “U.S. and Brazilian officials have
begun talks to try to settle a trade dispute at the World Trade Organization
over U.S. cotton subsidies, the U.S. ambassador to Brazil said on Thursday.
“The South American agriculture giant was expected to present a definitive
list of U.S.
targets for retaliation in coming days.
“Until last month, Brazilian authorities said they had seen no signs from
their U.S. counterparts that
the United States
wanted to negotiate a settlement.”
Yesterday’s Reuters article stated that, “Total sanctions could be worth
$829 million based on 2008 data for the export credit guarantee program,
Brazil’s foreign trade ministry said in December.
“Brazil had already identified more than 200 possible U.S. targets
for trade retaliation, ranging from foodstuffs to textiles to pharmaceuticals.”
And a news
release issued earlier this week by Rep. Adrian Smith
(R-Neb.) stated that, “[Rep. Smith (R-NE)] today joined with a number of his
House colleagues in signing a letter to Taiwan’s Representative to the United
States Jason Yuan expressing their disappointment with the recent
unilateral decision by Taiwan to bar the import of certain beef and beef
products and urging a reversal of the policy.
“Nebraska has the top three beef cow
counties in the U.S.,
and produces more beef per square mile than any other state. Nebraska ranks first in the country in live
animal and meat exports ($1.1 billion) and number one in cattle harvest (seven
million head).”
“‘Export markets are critically important to Nebraska’s beef industry. America has the safest food supply in the world
and I am disappointed Taiwan
took this action, which is in direct violation of a bilateral agreement
concluded by our nations just two months ago. Taiwan
should honor its commitments to provide full market access to U.S. beef and
beef products,’ Smith said.”
Climate Issues
The Los Angeles
Times editorial
board indicated today that, “If changes in the public mood and the party
alignment of the U.S. Senate have stalled healthcare legislation, they
may have thrown the highly anticipated climate bill under a bus.
“Even before Republican Scott Brown’s stunning election to the Senate in
traditionally Democratic Massachusetts last month, it was proving hard
to corral moderate Democrats to support a bill capping greenhouse gas emissions.
Now they’re afraid to back anything that could be perceived as harmful to the
economy. ‘Realistically, the cap-and-trade bills in the House and the
Senate are going nowhere,’ Sen. Lindsey Graham (R-S.C.) told the New York Times.
That’s a distressing comment coming from one of the three senators supposedly
crafting a compromise climate bill that’s capable of achieving a
filibuster-proof majority in the Senate.
“President Obama has backed down too. On
Tuesday, he signaled that cap-and-trade could go the way of healthcare
reform’s ‘public option,’ saying it could be removed from the climate bill.
That would eliminate the market mechanism for pricing greenhouse gas pollution
— and without setting such a carbon price, other measures under consideration,
such as a national renewable energy standard, won’t go far enough to
significantly slow global warming.”
However, Christa
Marshall of ClimateWire reported yesterday at The
New York Times Online that, “The Obama administration’s top climate
adviser strongly defended a cap on emissions a day after the president
suggested Congress might move an energy bill without such a cap in place.
“White House climate and energy adviser Carol Browner used the words ‘cap’
and ‘price signal’ several times yesterday in describing what the
administration would be pushing for in the days ahead to spur new jobs and curb
the ‘dangerous pollutants that contribute to global warming.’
“‘We need comprehensive
energy and climate legislation that will not only allow us to lead the world …
but also enhance our national security,’ Browner said in front of renewable
energy industry representatives at the Retech
Conference in Washington, D.C.”
And with respect to Senator Scott Brown (R-Mass.), Kevin
Friedl and Christopher Snow Hopkins reported
yesterday at the National Journal’s Energy and Environment Blog that, “Scott
Brown’s unlikely victory in Massachusetts may have reinvigorated the Republican
Party, but one polling company says that’s no guarantee the freshman
senator will join his caucus in opposing cap-and-trade legislation.
“Joel Benenson, of the Benenson
Strategy Group (D), today presented new polling data conducted on behalf of the
Climate Protection Action Fund — an affiliate of Al Gore’s Alliance
for Climate Protection — that shows a majority of Massachusetts independent voters support a bill that includes a mandatory cap on emissions.”
Meanwhile, Darren
Samuelsohn of ClimateWire
reported yesterday at The New York Times Online that, “Key senators are
studying whether power plants should be the guinea pig industry for the
nation’s first cap-and-trade system designed to curb greenhouse gas emissions.
“Electric utilities are responsible for about a third of the country’s
annual heat-trapping pollutants, and they have been involved for about 15 years
in a similar market-based mechanism that has successfully reduced acid rain.
“But the focus on just one industry also comes with perils, and it is far
from certain that Senate politics would be any different if lawmakers set aside
the House-passed economywide approach that goes after
major energy, transportation and manufacturing companies — accounting for more
than two-thirds of U.S.
emissions.”
The article noted that, “Industry lobbyist Scott Segal said he
doubts a power plant-only approach has much of a chance on Capitol Hill
as lawmakers representing the power companies would quickly start to hear about
how they are taking on too great of a burden compared with other industrial
sectors.”
Mr. Samuelsohn explained that, “The power
plant-only approach gains another wrinkle today when a bipartisan Senate
coalition introduces legislation setting up a cap-and-trade system for three
traditional air pollutants: sulfur dioxide, nitrogen oxides and mercury
[related
article, related news
release.]
“Co-sponsors Sens. Tom Carper (D-Del.) and Lamar
Alexander (R-Tenn.) previously worked
together on air pollution issues during the George W. Bush administration. Back
then, they also wrote a bill with carbon limits.
“They are coming back for another run this time — minus the carbon
— because of public health concerns associated with a lack of strong federal
controls. And they also want to give the electric utility industry greater certainty
as they seek to make multibillion-dollar capital investments. Currently, power
companies are holding back as they wait for U.S. EPA to outline its regulatory
plans following a 2008 federal court decision that struck down a Bush-era
cap-and-trade approach to slash NOx and SOx emissions from power plants in the eastern United States.”
Biofuels
With respect to executive branch
action regarding biofuels earlier this week, Allison
Winter of Greenwire reported yesterday at The New
York Times Online that, “U.S. EPA Administrator Lisa Jackson yesterday
announced the new regulations for low-carbon fuels, which would implement the
long-awaited renewable fuels standard that Congress included in the 2007 energy
bill. The final rule is friendlier to ethanol than a proposal EPA
floated last year, which incited bipartisan rage from Midwestern lawmakers, who
thought the analysis was unfair to farmers and ethanol producers.”
The article added that, “But some lawmakers are not backing down in
their efforts to fight the rule, despite the fact that the final rule
won hesitant support from the ethanol industry and praise from environmental
groups. Lawmakers in the House and Senate who have fought to block EPA’s work
on the rules indicated last night that they will continue to oppose the
agency’s work on the effort.
“‘Typical of most decisions made in Washington,
there is some good and some bad in the renewable fuel standard final rule
announced today,’ House Agriculture Chairman Collin
Peterson (D-Minn.) said in a statement yesterday.
‘To think that we can credibly measure the impact of international
indirect land use is completely unrealistic, and I will continue to
push for legislation that prevents unreliable methods and unfair standards from
burdening the biofuels industry.’
“Last year Peterson successfully tacked language on to the House-passed
climate bill (H.R. 2454) that would have delayed EPA’s work on the regulations.
He also cosponsored
a bill earlier this week that — among other things — would stop the
agency from using land-use calculations as part of its assessment of ethanol’s
carbon footprint.”
Ms. Winter noted that, “Now that EPA has finalized the rules,
legislative efforts to block the effort would be more complicated. But
Peterson and other lawmakers could try to advance similar bills to keep EPA
from expanding the regulations or issuing new regulations with different
science in the future. They could also use spending bills in an effort
to squelch funding for their implementation.
“A stab at the agency’s appropriations could come from Rep. Jo Ann
Emerson (R-Mo.), a cosponsor of the bill with Peterson who sits on the House
Appropriations Committee.
“Emerson offered an amendment to EPA’s 2010 spending bill that would
have barred the agency from considering the effects of international land-use
changes when calculating the carbon footprint of biofuels.
The committee narrowly rejected that proposal, 29-30.
“Emerson’s spokesman, Jeffrey Connor, said last night that the congresswoman
would continue to look for ways to fight the regulations this year — either
through legislation or appropriations.”
Reuters writer Charles
Abbott reported on Wednesday that, “A new U.S. program that
subsidizes biomass crops for energy use may cost $263 million this year —
nearly four times its expected cost — with an opening emphasis on forest and
sugar scrap.
“The Obama administration cited the Biomass
Crop Assistance Program (BCAP) on Wednesday in steps to encourage clean energy
production. It would broaden the geographic base of a bioenergy
industry now dominated by corn ethanol production mainly in the Midwest.
“BCAP went into operation last summer on an interim basis. A more permanent
regulation was opened for comment by the Agriculture Department on Wednesday.”
The Reuters article added that, “Farm activists have worried for
months that BCAP would be dominated by businesses that are longtime recyclers
of scrap materials to power their operations, rather than newcomers.
“When BCAP was created, it was forecast to $70 million over five years. On
Monday, the administration estimated the cost at $263 million this fiscal year
and $479 million in fiscal 2011, which opens Oct. 1.”
See a related analysis on this issue that was posted yesterday by Chris
Clayton at DTN’s Ag Policy Blog, “USDA
Now Tries to Cap BCAP.”
National Animal Identification System (NAIS)
William
Neuman reported in today’s New York Times that, “Faced
with stiff resistance from ranchers and farmers, the Obama administration has
decided to scrap a national program intended to help authorities quickly
identify and track livestock in the event of an animal disease outbreak.
“In abandoning the program, called the National Animal Identification
System, officials said they would start over in trying to devise a livestock
tracing program that could win widespread support from the industry.
“The agriculture secretary, Tom Vilsack, will announce the changes
on Friday, according to officials at the Agriculture Department, who spoke on
condition of anonymity because the decision had not yet been made public.”
Ag Economy: Production Costs; and Productivity
University of Illinois Agricultural Economist Gary Schnitkey
noted in a paper from earlier this week (“Fertilizer
Prices in 2008, 2009, and 2010”) that, “Fertilizer costs for corn
in 2010 likely will average $100 per acre for corn on high-productivity
farmland in Illinois. These costs will be below 2009 costs. These
fertilizer costs are based on fertilizer prices reported in a new report
listing average fertilizer prices in Illinois.”
Dr. Schnitkey added that, “A new report released by
AMS reports average fertilizer prices in Illinois,
thereby allowing farmers and others to more closely monitor fertilizer in Illinois. Prices suggest
that 2010 costs for corn likely will be around $100 per acre, considerably
below 2009 costs. Fertilzier costs in 2009 will vary
across farms simply due to the timing of fertilizer purchases. Current Prices
suggest that 2010 costs for corn likely will be around $100 per acre,
considerably below 2009 costs. While below 2009 levels, 2010 costs will
be historically high. Between 2000 and 2007, fertilizer costs for corn averaged
$68 per acre in central Illinois
on high-productivity farmland [see
related table].”
Earlier this week, USDA’s Economic Research Service provided an update to a
data set regarding agricultural
productivity in the United States; ERS noted that, “It is widely
agreed that increased productivity is the main contributor to economic growth
in U.S.
agriculture. This data set provides estimates of productivity growth
in the U.S.
farm sector for the 1948-2008 period, and estimates of
the growth and relative levels of productivity across the States for the period
1960-2004 [see
related graph].”
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