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November 19, 2010
 

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Deficit, Debt Reduction Plan Released

A comprehensive deficit and debt reduction plan entitled, Restoring America’s Future, was released by the co-chairs of the Bipartisan Policy Center’s Debt Reduction Task Force.

The Task Force was composed of former top federal officials and labor and business leaders. The Bipartisan Policy center was set up by former Senate leaders Dole (R-KS), Daschle (D-SD), Mitchell (D-ME) and Baker (R-TN). The Task Force was co-chaired by former Senate Budget Committee Chairman Domenici (R-NM) and former White House Budget Director Rivlin.

The plan is designed to stabilize the federal debt at about 60% of gross domestic product by ’20 by cutting spending, eliminating tax breaks and imposing a national sales tax.

The task force's plan aims for $5.866 trillion in deficit reduction over the ’12-20 timeframe, more than the President’s fiscal commission's goal of $3.831 trillion. The plan would cut individual tax rates to 15% and 27%, and cut corporate rates to 27%. However, it would eliminate most personal deductions and credits while keeping some of the most popular items, such as the home mortgage interest and charitable deductions. To boost growth in the near-term, it would create a one-year payroll tax holiday, with the shortfall in the Social Security and Medicare trust funds to be repaid over 10 years. It also would freeze domestic and defense discretionary spending levels for four and five years respectively, to save more than $2 trillion through ’20.

The plan would establish a 6.5% Debt Reduction Sales Tax and enforce all savings through strict budget rules. The “payroll tax holiday” for ’11, suspending Social Security payroll taxes for employers and employees is estimated by the Congressional Budget Office to create as many as seven million jobs. The plan also would phase in the steps to reduce deficits and debt gradually beginning in ’12, so the economy will be strong enough to absorb them.

The proposal included the following specific proposals to reduce spending in agriculture:

(1) Reduce and Limit Payments to Commercial Farms and Certain Producers – Rectify inequity between large and small producers by (1) eliminating all payments based on production history to large commercial producers (with combined farm and non-farm adjusted gross incomes of greater than $250,000); and (2) lowering the cap on direct payments based on production history from its current $40,000 level to $20,000 (although counter-cyclical payments will remain intact). These changes will reduce average government payments per commercial farm by about $20,000 and promote greater distributional equity in payments to farms, as smaller farms will still benefit from the payments. Savings would total $15 billion in ’20.

(2) Reform Federal Crop Insurance Program (FCIP) and Reduce Premium Subsidies - Reduce administrative and operating costs subsidies to levels consistent with recent studies that estimate a reasonable rate of return for crop insurance companies. The Task Force plan will also reduce the FCIP premium subsidy for farmers from its current 60% level to 50%. Savings would total $9 billion in 2020.

(3) Consolidate and Cap Agriculture Conservation Programs - Eliminate overlap by consolidating 16 of the programs into one capped entitlement that grows with inflation. Programs considered for consolidation include: the Conservation Technical Assistance Program, Soil Surveys, Snow Surveys and Water Supply Forecasts, Plant Material Centers, the Grazing Lands Conservation Initiative, Agricultural Management Assistance, the Chesapeake Bay Watershed Program, the Cooperative Conservation Partnership Initiative, Environmental Quality Incentives, the Agricultural Water Enhancement Program, Conservation Innovation Grants, Grown and Surface Water Conservation, the Farmable Wetlands Program, the Conservation Reserve Enhancement Program, Emergency Forestry Conservation Reserve Program, and the Voluntary Public Access and Habitat Incentives Program. Savings would total $6 billion in ’20.

The complete report is available at http://www.bipartisanpolicy.org/projects/debt-initiative/about.

 
Stabenow Comments on Senate Ag Committee Chairmanship

Sen. Stabenow (D-MI) made the following statement regardingthe next chair of the Senate Committee on Agriculture, Nutrition, and Forestry:  “I am ready to lead the Senate Agriculture Committee in the 112th Congress. Agriculture is critical to Michigan’s economy, employing a quarter of our workforce. Not only does agriculture create jobs and feed our families across America, but it is also helping us develop new fuels and energy sources. “I look forward to working with my colleagues on both sides of the aisle, as we begin writing a new farm bill that once again recognizes the importance of America’s agricultural economy and rural communities.”

Sen. Stabenow’s announcementfollows Sen. Conrad’s (D-ND) announcement that he would remain chairman of the Senate Budget Committee.Committee leadership and membership will be finalized in coming weeks.

 
Senate Leaders Chosen

Senate Majority Leader Reid (D-NV) and Senate Minority Leader McConnell(R-KY) were re-elected to serve in the positions they have held for the past four years. However, they will be working in a more narrowly divided Senate when the new Congress convenes on Jan. 5.

The Democratic majority will drop from 59 members to 53 and the Republican minority will increase to 47 members from 41.

The Democratic leadership lineup will remain the same for the third consecutive Congress, with Sen. Reid joined by Majority Whip Durbinof Illinois, Caucus Vice Chairman Schumer of New York and Conference Secretary Murrayof Washington. Sen. Reid announced that Sen. Schumer also will chair the Democratic Policy Committee; Sen. Stabenow of Michigan will be vice chairwoman and Sen. Begich of Alaska will be Steering Committee chairman. Those are appointed positions.

Republicans re-elected Sen. McConnell by acclimation. He will be joined by Minority Whip Kyl of Arizona, Conference Chairman Alexander of Tennessee, Policy Committee Chairman Thune of South Dakota, Conference Vice Chairman Barrasso of Wyoming, and National Republican Senatorial Committee Chairman Cornyn of Texas.

 
Rep. Boehner Endorsed For House Speaker Post

Rep. Boehner (OH) has been endorsed by the enlarged Republican caucus to serve as Speaker and barring an unforeseen event is guaranteed to be elected when the House votes in January. The Speaker is a constitutional office and second in succession to the Presidency so the full House must vote on the position.

House Democrats re-elected Rep. Pelosi (CA) to serve as their leader for the 112th Congress. She defeated Rep. Schuler (NC) by a vote of 150 to 43. Rep. Shuler, a conservative Blue Dog, decided to challenge her for minority leader when no one else stepped forward, following the Nov. 2 elections in which Democrats lost control of the House.

Reps. Doyle (PA), Cuellar (TX) and Moore (WI) spoke in favor of electing Pelosi as Minority leader for the 112th Congress. Reps. Matheson (UT), Ross (AR) and Kissell (NC) publicly supported Shuler. Matheson and Ross are senior members of the Blue Dog Coalition. Kissell is not affiliated with any formal caucus group.

Senior Democrats confirmed that Rep. Matheson worked out an agreement with party leaders to allow the full caucus to consider several amendments to caucus rules to make a number of leadership positions subject to caucus election, not appointment by Rep. Pelosi. The proposals called for the election of the top Democrat on the Rules Committee, the chairman of the Democratic Congressional Campaign Committee and four top positions on the steering and policy committee — two co-chairmen and two new vice chairmen.

Democrats conducted a prolonged and spirited debate over a motion to delay the leadership elections until Dec. 8, but they ultimately voted 129-68 to reject the postponement proposed by Rep. DeFazio (OR) and Kaptur (OH).

Alan Boyd of Florida, a Blue Dog defeated for re-election, said much of the dissent was aimed at Pelosi. “Nancy Pelosi is the face that defeated 60-plus members,” Boyd said. “I am very disappointed she decided to stay as minority leader.”

Rep. Pelosi recently has proved deft at bridging differences within the caucus, persuading current Majority Leader Hoyer (MD) and Majority Whip Clyburn (SC) to drop a contest for the No. 2 leadership spot in the minority. Instead, she created a new position — assistant leader, the No. 3 spot — to satisfy Clyburn. Democrats also re-elected Rep. Larsen (CT) as caucus chairman and Rep. Becerra (CA) as caucus vice chairman. Rep. Van Hollen (MD) will serve as ranking Democrat on the Budget Committee in the 112th Congress.

 
Senate Moves Forward on Food Safety Legislation

The Senate voted (74-25) to invoke cloture and move forward on bipartisan food safety legislation (S.510). The measure was first approved by the Senate Health, Education, Labor and Pensions Committee almost a year ago. It would make the most significant changes to food safety laws in 70 years and bolster the Food and Drug Administration’s (FDA) enforcement powers, including the authority to recall food and regulate imported food.  It also would require businesses to identify food safety hazards at all of their facilities.

The House passed its version of food safety legislation, HR 2749, on July 30, ’09. A number of agricultural groups, including the NCC, opposed the bill because of a variety of provisions such as registration fees and extensive traceability requirements. The bill would cover gins and cottonseed handlers and processors.

Some senators voted against moving forward out of concern about certain amendments that have been circulating. One of these amendments, offered by Sen. Tester (D-MT), proposes to exempt small farms and food production facilities that sell directly to consumers, retailers and restaurants in their states or within a 400-mile radius. Sen. Chambliss (R-GA), a co-sponsor of the original version of S.510, said he voted against the motion to proceed because of the Tester substitute amendment. Critics of the Tester amendment, including public health groups and the United Fresh Produce Assoc., worry that inspections and oversight at the state and federal level are inconsistent. The produce association said it supports exemptions based on a scientific assessment of a fruit, vegetable or processed food’s risk for causing food-borne illnesses rather than on size.

A compromise was reached that would allow state and local inspections, rather than federal oversight, of farm and food processing operations that sell directly to consumers within a 275-mile area and average less than $500,000 in annual sales. The FDA could withdraw an exemption from a facility that has been associated with a food-borne illness outbreak.

The other contentious amendment, authored by Sen. Feinstein (D-CA), would have banned the use of bisphenol A from plastic food and beverage containers used for children’s food products. The food industry indicated it would drop support of the bill after Sen. Feinstein said she wanted to expand the proposed BPA ban to metal food cans and all plastic food and beverage containers. Later, Feinstein said the chances for her proposal were dimming and, eventually pulled back her amendment.

 “We’re going to finish the bill,” Senate Majority Leader Reid (D-NV) said.

However, Sen. Reid will have to work around Sen. Coburn (R-OK) who insisted that he be allowed to offer two amendments to the food safety bill: a bipartisan proposal to set a moratorium through FY13 on earmarks and a substitute amendment that would completely rewrite the food safety bill. Sen. Coburn blocked a unanimous consent agreement to take up the bill before the fall recess, arguing that the bill would not end food-borne illnesses and is too expensive. He said authorizing the FDA to order recalls is unnecessary because voluntary recalls work. The earmarks amendment is not directly related to the food bill, but he said in a statement that Sen. Reid indicated he will “obstruct a straight up or down vote” on the proposed moratorium.  Sen. Coburn said he would “use all procedural tools available” to force a Senate vote on his earmark measure.

The Senate will proceed with the bill when they return from Thanksgiving break on Nov. 29. Sen. Reid filed a motion to limit debate that will be considered. If cloture is invoked, the Senate will consider a series of amendments including Sen. Coburn’s.

If the Senate does ultimately approve S.510, it still must go to a conference committee to resolve the significant differences between provisions of the House and Senate bills. With time running out on the 111th Congress, negotiations have been going on for months between the House and Senate to reach an agreement so that the House would accept the Senate version in order to expedite its passage.

The NCC has worked closely with other organizations and Senators in an effort to ensure that the Senate bill does not include arbitrary, unnecessary and burdensome tracing requirements and fees on gins, cottonseed handlers and processors.

 
Noise Control Standards Changes Proposed

The Occupational Safety and Health Administration (OSHA) issued a notice on Oct. 19, ’10 announcing its intention to change its official interpretation of workplace noise exposure standards and enforcement.

To protect employees against hearing loss from long-term exposure to noise, the agency has maintained a decades-old policy that allows employers to provide “personal protective equipment” such as ear plugs and ear muffs, as well as engineering controls like noise-dampening equipment and muffling systems, to effectively supplement their operating practices. OSHA’s common-sense approach held that it was permissible for employers to adopt these practices when they were effective.

OSHA now plans to abandon this practice by reinterpretation of the term “feasible.” In its notice, the agency announced a goal of requiring employers to implement all “feasible” controls – with “feasible” meaning “capable of being done”– regardless of the costs or effectiveness of currently-used personal protective equipment. According to the notice, these changes must be adopted regardless of the costs unless an employer can prove that making such changes will “put them out of business” or severely threaten the company’s viability.

OSHA is claiming that because this action is only a reinterpretation of a term, it is not a formal rulemaking and, therefore, not subject to interagency review, economic impact analyses or clearance through the Office of Management and Budget. However, this proposal is a change from a long-held OSHA policy.

If the agency implements the proposal, employers that have not made every systematic change “capable of being done” will have to make sweeping changes to their workplaces, including development of new workplace practices, procedures and work schedules; installation of new equipment such as baffles and other sound containment devices; and retrofitting machines and production systems with often expensive noise-dampening controls. These changes would be required even if effective mechanisms already are in place to protect employees from loud noises. Unfortunately, this proposal will force manufacturers to divert additional resources away from job creation, investment and expansion.

OSHA has indicated that it intends to enforce this new interpretation by issuing citations for employers found in non-compliance. Unless employers can prove to OSHA inspection officers that the changes will be economically devastating or are impossible to make, businesses will be forced to implement them, which will be particularly costly and burdensome for smaller-sized manufacturers.

The agency has requested public comments on the proposal before Dec. 20, ’10.

 
FY10 Export Promotion Grants Announced

Agriculture Secretary Tom Vilsack announced that USDA’s Foreign Agricultural Service (FAS) has provided funding allocations supporting more than 100 organizations’ efforts to help expand commercial markets for US agricultural exports. The FY10 allocations were provided under FAS’ Emerging Markets Program (EMP), Foreign Market Development Program (FMD), Market Access Program (MAP), Quality Samples Program (QSP) and Technical Assistance for Specialty Crops Program (TASC) to help expand commercial markets for US agricultural exports.

Cotton Council International received $20,645,807 in MAP funds, $5,052,334 in FMD funds while $200,000 in EMP funding was awarded for a Cotton USA Technical Assistance Initiative in Bangladesh. For a complete listing of funding allocations and projects, visit http://www.fas.usda.gov/info/fiscal2010.

 
Sales Surge, Shipments Steady

Net export sales for the week ending Nov. 11 were 518,900 bales (480-lb.). This brings total ’10-11 sales to approximately 12.7 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 4.7 million bales. Total new crop (’11-12) sales are 1.1 million bales.

Shipments for the week were 146,300 bales, bringing total exports to date to 2.4 million bales, compared with the 2.6 million bales at the comparable point in the ’09-10 marketing year.

 

 
Effective Nov. 19-25, ’10

Adjusted World Price, SLM 11/16

143.07 cents

*

Fine Count Adjustment ('09 Crop)

 0.00 cents


Fine Count Adjustment ('10 Crop)

  0.00 cents


Coarse Count Adjustment

  0.00 cents


Marketing Loan Gain Value

 0.00 cents


Import Quotas Open

11


Special Import Quota (480-lb bales)

759,056


ELS Payment Rate

0.00 cents


*No Adjustment Made Under Step I

 

Five-Day Average



Current 5 Lowest 3135 CFR Far East

159.91 cents


Forward 5 Lowest 3135 CFR Far East

116.26 cents


Coarse Count CFR Far East

NA


Current US CFR Far East

158.80 cents


Forward US CFR Far East

NA


 

'10-11 Weighted Marketing-Year Average Farm Price  
 

Year-to-Date (Aug.-Sept.)

75.82 cents

**


**August-July average price used in determination of counter-cyclical payment