State Association Weekly Washington Report 9.8.16 Congress Returns, It s All About Spending Congress returned this week from its seven-week recess the longest summer recess in 30 years and the plan is to work through September, then disappearing until after the November 8 election. While there are more than enough issues to keep lawmakers busy, and several about which agriculture cares, attention and energy will be devoted to the one must-pass piece of legislation a continuing resolution (CR) to keep the government operating past the September 30 end of the federal fiscal year. Senate Majority Leader Mitch McConnell (R, KY) this week said he s shooting for a CR funding government operations at current levels through December 9, and his talks with the White House, Democrats broadly and the House leadership indicate that date is a lock. House Majority Leader Kevin McCarthy (R, CA) signaled he ll support a December CR. McConnell said the Senate could vote on the CR as early as next week, but his House counterparts weren t meeting with the GOP caucus until September 9, so the pathway is still unclear. Some speculate the Senate could pass its CR and recess early to force the House into a take-it-or-leave-it situation on keeping the government open past September 30. The Senate is also expected to try and tuck into the CR new spending to battle the Zika virus, action blocked by Senate Democrats because of unrelated GOP policy riders, including a proposal to use the CR to cut Planned Parenthood funding for clinics in Puerto Rico. Zika funding has been a bipartisan priority for the Florida congressional delegation, and threatens to become an even bigger campaign issue if the GOP-controlled Congress doesn t act soon. Complicating the short-term spending negotiations, however, are far right GOP House members backed by conservative Washington, DC, think tanks who want a CR that runs for six months or through the end of March, a move designed to avoid cobbling together an FY2017 omnibus spending package laden with policy riders, and leaving major spending decisions to a new Congress and a new President. House Freedom Caucus Chair Rep. Jim Jordan (R, OH) said his group is very concerned about policy riders that could get tacked on to an omnibus spending package, leading to budget increases or other Democrat mischief. House Speaker Paul Ryan (R, WI) is between a rock and a hard place; if he chooses to walk away from the demands of the conservative wing of his caucus, he may not be able to move a CR in a timely way. If he accedes to the six-month CR demand, it s likely the Senate would reject the notion and he d run the risk of Republicans being blamed for shutting down the federal government a month before the election. Senate Minority Leader Harry Reid (D, NV) said last week that if there s a push for a six-month CR, he ll shut the government down, though few believe he ll make good on the threat. The December 9 CR deadline signals the post-election lame duck session will likely begin Monday, December 5, and the main focus of that session will be to get FY2017 spending approved. McCarthy says the only legislation likely to be dealt with during the lame duck is the spending package. But while most contend a repeat of last December s approval of an omnibus spending package is the likely outcome, House Speaker Paul Ryan (R, WI) this week signaled he d like to see a series of FY2017 minibuses approved each dealing with specific areas of government operation, some for the fully fiscal year, others for a shorter term rather than a single massive spending package.
What Congress May Do or Not in September or in Lame Duck While all congressional eyes are on the debate over the continuing resolution and the potential for an FY2017 omnibus spending package, several unresolved issues for agriculture remain. While little is expected to get done this month, save for a lot of campaign rhetoric, several within agriculture have made it clear what Congress should do. The following are key issues for agriculture and their likely fate during the remainder of September and during the December lame duck session: Farm Loan Shortages Despite last week s announcement by USDA that it will allocate $185 million to try and clear as many as 1,900 pending farm loan applications which received big cheers from agriculture groups at most agriculture committee hearings and symbolic action on a farm loan funding shortage during tough economic times is likely. USDA s Farm Service Agency (FSA) has made it abundantly clear it does not have enough money to fund all of the demand for farm loans of which it s aware, and the announced funding is achieved by redirecting funds from others USDA accounts with congressional approval. If USDA can fund those 1,900 loan applications, that s still only one-third of the applications received by FSA, the department said. Water Resources Development Act (WRDA) The $10.6-billion waterways infrastructure support bill has been stuck in a political quagmire that has little to do with the merits of the bill, but late Wednesday this week, Senate Majority Leader Mitch McConnell (R, KY) overcame Democrat opposition and brought WRDA to the flood. Democrats objected to taking valuable floor time when heavy political issues like Zika funding and the continuing resolution are in play to deal with the bill, but offered only token opposition. The bill provides authority for more than two dozen lock, dam, levee and port projects across the country, as well as municipal water infrastructure programs. The fact the waterways package also contains $220 million and new program authority to aid Flint, Michigan and other community s water system woes helped in leading both the GOP and Democrats into the light. Senate Environment & Public Works Committee Chair Jim Inhofe (R, OK) and ranking committee member Sen. Barbara Boxer (D, CA) say they have the votes to move the bill as early as September 9, after getting past at least half a dozen amendments to be added to a manager s package. If WRDA survives the Senate process, it s fate in the House is unclear as that chamber approved a much leaner authorization bill last year dealing only with U.S. Army Corps of Engineers projects. Immigration Reform Nothing is going to happen on immigration reform in either chamber during the remainder of this Congress. The issue is too closely tied to the presidential race and is too politically volatile given President Obama s executive orders on deferring deportation of undocumented workers and their families are in the federal court system and headed to the Supreme Court. Trans-Pacific Partnership (TPP) With House Majority Leader Kevin McCarthy (R, CA) this week telling reporters the only major legislation to be tackled during the post-election lame duck session will be FY2017 spending, that pretty much closes the door on any action to ratify TPP. Several agriculture groups whose members stand to benefit from TPP increased access to Asian markets the National Pork Producers Council (NPPC) says TPP is far and away our top issue are pushing House and Senate leadership to clear time for an up or down vote on the trade pact, but as McConnell put it last month, the politics of trade have become toxic. Both presidential candidates oppose TPP.
EPA Regulations House and Senate Republicans have tried and have been partially successful in tacking on to various legislation, primarily spending bills language that would end run or stop dead EPA s waters of the U.S. (WOTUS) rulemaking, as well as President Obama s clean air initiatives. However, all of these efforts have drawn veto threats, and none of these efforts have survived given both sets of rulemaking are currently in the federal courts based on industry and state actions filed against them, Congress won t take the time to try and deal with them this year. Trade with Cuba There will be no effort to try and formally lift the 1960 embargo on U.S. trade with Cuba given staunch opposition among Hispanic and Cuban American lawmakers on both sides of the aisle and both sides of Capitol Hill. However, next week the House Agriculture Committee will hold a hearing trade prospects with Cuba and how existing financial barriers are affecting existing trade, the goal being to ultimately remove the cash-only requirement on Cuban purchases. Even though normalizing trade with the Caribbean island nation is a priority for agriculture and agribusiness, the Obama Administration s normalizing of diplomatic relations including opening a USDA office in Havana and incremental erosion of the private citizen travel ban appear to be about as far as that effort can go this year. Energy Bill While House and Senate conference committee members have only just begun work on a compromise omnibus energy bill the first major energy legislation since 2007 supporters are keeping hope alive a door will open to clear that long-pending legislation for final action. The Senate bill is the bipartisan product of the Senate Energy & Natural Resources Committee; the House takes a majority rules stance on the energy package. The bill increases energy efficiency through building retrofitting; improves the energy infrastructure, including cybersecurity safeguards and electric grid upgrades; increases the domestic energy supply, and promotes conservation. However, the conference remains tied up over the fate of the Land & Water Conservation Fund the Senate wants to make the fund, which pays for federal land acquisitions, a permanent entity, the House is not convinced as well as language designed to provide aid to victims of the California drought, the setting of federal energy efficiency standards for new construction. If it moves this month, it will be because all controversial portions of the bill are jettisoned and a much leaner, agreed-to version emerges. Grassley Sets September 20 Hearing on Agrichem Mergers; Poultry Processors Hit with Antitrust Suit Never a fan of big agriculture, Senate Judiciary Committee Chair Chuck Grassley (R, IA) has been outspoken in his skepticism of several pending mergers in the farm input sectors, particularly seeds and farm chemicals, and to put action behind his words, Grassley has set September 20 for a judiciary hearing on the issue. In a related development, a New York foodservice company has filed a class action lawsuit against 14 poultry processors alleging the companies illegally manipulated supplies to keep prices high, action dating back to 2008. Expected witnesses at Grassley s hearing will include principals from companies involved in takeovers or sitting as takeover targets, as well as federal regulators and agriculture group representatives. Mergers and acquisitions pending are Bayer s move to buy Monsanto the Swiss giant announced it upped its bid again this week as well as the prospective Dow-DuPont merger, ChemChina s pursuit of
Syngenta and John Deere s pursuit of Monsanto s Precision Planting operation, with the Justice Department sued to stop last week. In the poultry antitrust case filed this week, Maplevale Farms, Falconer, NY, a foodservice distribution company, said companies such as Tyson Foods, Pilgrim s Pride, Perdue Farms and several other companies representing about 98% of all chicken sold in the U.S. worked together to artificially lower broiler supplies in order to increase prices. The joint action allegedly included sharing of confidential information, news on plant closings, hatching egg export levels and destroying breeder hens, according to a report in meatingplace.com. The actions, the suit contends drove prices up by 80% during a period when corn and soybean prices dropped by 23%. The company wants damages awarded to the maximum extent allowed under federal antitrust laws, including triple damages and attorneys fees. Think Tanks Says End Commodity Programs, Crop Insurance Received by agriculture with a whole lot of disdain this week is a recommendation by the Heritage Foundation, a conservative think tank, that holds eliminating income safety net commodity programs and federal crop insurance would cause little harm to farmers and ranchers because they generally have the economic means to weather risk without taxpayer help. The recommendation is part of a report obtained by ProAg, and reported widely. The report is allegedly designed to help guide policy positions for the Foundation s lobbying arm, Heritage Action, during debate over the 2018 Farm Bill. Critics were quick to point out such recommendations by Heritage are not new and that Congress has rejected them in the past. The report says that about $15 billion spent each year on subsidies distorts planting decisions and promotes practices deemed riskier than farmers might pursue without the federal assistance. The report says farms are generally financially healthy, but some farmers will go under just as other businesses go under. The federal government should not guarantee that all operations will survive and, even worse, guarantee that all operations will flourish, the report added. The report says several programs should be eliminated, including the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, the dairy Milk Margin Protection (MPP) program, the sugar price support program, and federal crop insurance, as currently constituted. Policies should not cover income loss, but protect against deep yield losses and disasters. Farmers would be transitioned off these safety programs through one-time state grants. Klobuchar, Boozman Want to Ease Conservation Reporting Senate Agriculture Committee members Sen. John Boozman (R, AR) and Sen. Amy Klobuchar (D, MN) this week introduced legislation to make USDA conservation program reporting requirements easier for small farmers. The two lawmakers say their bill the Improving Access to Farm Conservation Act is needed because federal conservation reporting requirements are written for large producers and are overly burdensome on smaller farms and ranches. This burden, they say, makes it tougher for smaller producers to get help with their conservation program compliance.
Adding insult to injury, they said, most conservation program reporting is done electronically, and smaller farmers in areas of limited broadband access are at a distinct disadvantage. GM Labeling Law Rules Won t Be Quick, Won t be Cheap: Vilsack It s unlikely USDA will be able to even propose rules to implement recently enacted genetically engineered (GE) food ingredient access legislation before President Obama leaves office, and the main culprit is a lack of funding, said Secretary of Agriculture Tom Vilsack this week. Assuring attendees at a biotech meeting that USDA is working diligently to write rules that work the way Congress intended and publish those rules by 2018, Vilsack responded to agriculture groups pushing to see a proposed rule before the Obama Administration shuts down in January, saying that won t happen. The new law says human food packages must either declare the presence of GE ingredients, carry a label symbol to be developed by USDA indicating the use of biotechnology, or provide several options to consumers to discover ingredient information if they so choose. The department has created a website and a 1-800 number and so far has received about 500 comments, Vilsack said. A priority, Vilsack said, is to implement the ingredient information access requirements for labeling in a way that does not violate international trade laws, that works in the marketplace and isn t overly vulnerable to lawsuits. The department will release in October a request for proposals (RFP) for a study to find out if electronic labeling methods QR codes, bar codes, website addresses, etc. will provide consumers easy access to ingredient information if they want it. The biggest roadblock, the secretary said, is that Congress forgot to provide the money for the study and USDA staff time, a cost estimated at about $2 million. We don t want to do this on the cheap; we don t want to do this halfcocked, he said, adding he s pushing congressional backers of the legislation to ensure USDA funding is forthcoming to cover the study s cost. The department will also release by year s end a notice of proposed rulemaking seeking very specific information from food makers and other stakeholders. Vilsack says White House Food Council Good Idea Acknowledging it won t happen on his watch, Secretary of Agriculture Tom Vilsack this week said he thinks the next administration should create a White House Food Council, similar to the Rural Council or the Council on Environmental Quality. The high profile council s job, he said, would be to coordinate efficiently the jobs of various federal agencies and departments which regulate food and agriculture issues. We have the Council on Environmental Quality, the Rural Council (and) I think the time has come for the administration to strongly consider a food council, Vilsack said. He said the council would help develop better collaboration and coordination among producers, processors and food marketers, create a more stable situation for commodity prices, and coordinate production practices more closely. We have 15 different agencies that are involved in food safety, trade and regulatory issues of one kind or another, he said in remarks to a meeting of the Advisory Committee on Biotechnology for the 21 st Century (AC21). I think we re the only major country in the world that has that many fingers in the pie.
DOT Wants Speed Governors on Heavy Rigs A proposed rule published last week by the Department of Transportation (DOT) seeks to require trucks weighing more than 26,000 pounds to be fitted with speed limiting devices, aka, speed governors, but the proposal stops short of recommending at what maximum speed trucks should be held. The use of speed governors reduces the severity of crashes, reducing the resulting fatalities and injuries, DOT said, adding the speed limiter requirement would apply to all trucks weighing 26,000 pounds or more. The rulemaking more a solicitation of comments and opinions on the action is a joint effort between DOT s National Highway Safety Administration (NHSA) and the Federal Motor Carrier Safety Administration (FMCSA), and provides little detailed information as to how the program would be implemented if the rule goes final. The agencies want to hear from carriers and truck makers on the technical ins and outs of speed limiters and how they d be fitted and used on trucks already in service. Reports indicate DOT is considering a 60-mph limit on heavy trucks, but is also looking at 65 and 68 mph, based on analyses the department has completed over the last year. Public comment on the proposal will be accepted for 60 days, DOT said.