House Speaker Boehner (R-OH) said he believes the budget approved by the House Budget Committee on a near-party line vote (19-18) will be approved by the House.
The debate on the budget resolution is expected to begin on March 28, with votes on March 29. However, because the Senate is not expected to take up a budget this year, a final budget resolution is not expected to be agreed upon by the House and Senate.
The Senate has not passed a budget in two years and Senate Majority Leader Reid (D-NV) has said it will not do so this year either. Senate Democrat leaders say a budget already is in place as provided in the Budget Control Act adopted last year. Senate Budget Committee Chairman Conrad (D-ND) filed a budget "deeming" resolution that will reflect that agreement. This ensures legislation considered by the Senate will not be subject to a point of order as long as it complies with the spending limits in the Budget Control Act.
For FY13, which begins on Oct. 1, the plan approved by the House Budget Committee proposes $3.530 trillion in spending and $2.734 trillion in revenues, leaving a deficit of $797 billion. According to the Congressional Budget Office, the budget submitted to Congress in February by President Obama proposed $3.717 trillion in spending, with $2.741 trillion in revenues, leaving a deficit of $977 billion.
In a key development that would affect agriculture in the short-term, the Budget Committee would replace a scheduled across-the-board spending cut set to begin in Jan. '13 with directions to six committees, including agriculture, to come up with sufficient savings to eliminate the need for sequestration. The House Agriculture Committee would be required to identify changes in programs that would save $8.2 billion in one year and $33.2 billion over 10 years. This process, known as reconciliation, requires the Committee to report its recommendations to the Budget Committee by April 27.
It is unlikely that a Reconciliation measure approved by the House would ever be considered by the Senate and be enacted into law. However, the $33.2 billion in savings assigned to agriculture by the Budget Committee could become the new savings standard for the '12 farm bill replacing the $23 billion in savings achieved in the legislation offered to the Joint Committee on Deficit Reduction late last year. The Senate is not bound by the House action so the Senate Agriculture Committee still is likely to consider the $23 billion offered to the Joint Committee as its guideline.
The House Budget plan assumes a major overhaul of Medicaid and Medicare. Medicaid would be made into a block grant program with the federal share of money being sent to states and indexed for population growth and inflation. For Medicare, Chairman Ryan (R-WI) modified his previous proposal by allowing use of Medicare funds to purchase individual insurance beginning in '23 or the choice of staying in the traditional Medicare program.
The House Budget also assumes an overhaul of tax policies that would reduce the number of individual income tax brackets from six to two brackets of 10% and 25%. Revenues generated from reducing a number of tax credits and deductions would be used to lower the rates. Corporate rates would be lowered to 25% from 35%. The current tax on income generated outside the United States would be replaced with a territorial corporate tax system.
Preserving America's Family Farm Act Introduced
Sens. Moran (R-KS) and Thune (R-SD), along with 36 bipartisan cosponsors, introduced the Preserving America's Family Farm Act. The legislation is intended to prevent the Dept. of Labor (DOL) from enacting a controversial rule proposed in Sept. '11 that would place new restrictions on youth working in agriculture. A similar measure (H.R. 4157) was introduced on March 7, '12, in the House by Rep. Latham (R-IA) and three other cosponsors.
The DOL is "re-proposing" the portion of their proposed child labor rule regarding the agricultural parental exemption, which allowed children under 15 to perform certain tasks on farms owned by their families. Although the re-proposed rule is anticipated to clarify that children of farm operators, including those involved in various partnerships and other business models, would be exempt from the regulations, the legislation seeks to stop the entire rule from being implemented. The rule also would prohibit youths under the age of 18 from working with farm animals without adult supervision, operating certain types of farm machinery, or working in stockyards and grain and feed facilities.
No committee hearings or mark-ups on either of the bills have been announced. The re-proposed rule should be published by early summer. However, the DOL will continue to review comments received regarding the remainder of the proposed rule and will proceed toward finalizing the proposed rule. No date has been set for finalizing the remainder of the proposed rule, but the NCC remains engaged and will monitor the process.
Ex-Im Amendment Not Included in Jobs Bill
The Senate rejected a motion (55-44) to begin debate on an amendment to reauthorize the Export Import Bank (Ex-Im) co-sponsored by Sens. Cantwell (D-WA), Graham (R-SC), Shelby (R-AL) and Johnson (D-SD). The vote essentially ended the effort to reauthorize the Ex-Im as part of H.R. 3606, Jumpstart Our Business Start Ups Act. H.R. 3606, a bill to increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies, was passed (73-26).
The Ex-Im'scharter expires in May. The Cantwell amendment would have extended the bank's charter through Sept. 30, '15, and increased the bank's lending authority from $100 billion to $140 billion. The Ex-Im provides financing for sales of US exports to international buyers. The amendment included an important provision that would haveimproved access to financing for the textile apparel supply chain.
The NCC joined with the National Council of Textile Organizations and the American Apparel & Footwear Assoc. in supporting this amendment, including sending a letter to Senators urging them to vote for the amendment.(see 3/16/12 Cotton's Week)The letter is on the NCC's website at www.cotton.org/issues/2012/eximlet.cfm.
It is unlikely that Ex-Im reauthorization legislation will find a place on the Senate calendar in the near future, according to Senate Leaders. However, discussions in the House indicate the possibility of a two-year extension of the bank's charter.
The Ex-Im bank recently has become controversial even though it has been reauthorized more than 25 times since it was established in '34. Although the bank is self-funded and not supported by US taxpayers, conservative groups argue that it displaces financing that should be made through commercial banks where there is a more rigorous review of risk.
SPCC Plan Deadline Approaching
The EPA extended the deadline date from Nov. 10, '11 to May 10, '13 by which owners or operators of a farm must prepare or amend and implement an Oil Spill Prevention, Control, and Countermeasure ProgramPlan (SPCC). However, owners and operators of regulated facilities should pay close attention to guidelines to ensure that their SPCC Plan is in place in a timely fashion. Many farms and all gins should already have a plan in place.
Farms in operation on or before Aug. 16, '02, must maintain (have a plan in place now) and amend their existing plan if needed by May 10, '13. Farms in operation after Aug. 16, '02, but before May 10, '13 must prepare and implement a plan on or before May 10, '13. Farms that begin operations after May 10, '13 will be required to have a plan in place before they begin.
Gins were excluded from this compliance date extension. Currently, gins in operation on or before Aug. 16, '02, must have a plan in place. Gins in operation after Aug. 16, '02, but before Nov. 10, '11 also are required to have a plan in place at this time. Gins that start operations after Nov. 10, '11 must have a plan in place before they begin.
The EPA's SPCC Farms Fact Sheet at www.epa.gov/emergencies/docs/oil/spcc/spccfarms.pdf is perhaps the best information source for evaluating responsibilities under the SPCC Program. Farm and gin owners/operators should first establish whether they qualify as a regulated facility. Owners/operators are reminded that containers on separate facilities are not to be added together when determining total oil storage capacity. It is not uncommon for a farm to be comprised of multiple facilities with respect to oil storage. It is also recommended that owners and operators document and file explanations of circumstances that exclude them from this rule. Exemption from this rule does not exclude responsibilities for clean-up of oil spills or any containment requirements for their storage containers.
NCC also updated its slide set at www.cotton.org/tech/safety/upload/SPCCUpdate.pdf that may be useful in helping explain the basics of the SPCC Program. The slides include information regarding who is covered, what a covered facility should do, current deadlines and where to get additional information.
Owners or operators of qualified facilities should not wait until May 10, '13 to prepare or modify their existing plan. They also are urged to contact a qualified Professional Engineer as soon as possible if self-certification is not an option.
Beekeepers Petition EPA to Ban Pesticide
Commercial beekeepers and environmental organizations in California submitted a petition requesting EPA to revoke the registration of clothianidin, a neonicotinoid insecticide used in cotton for control of thrips, aphids, cutworms, plant bugs, stink bugs and white flies.
Beekeepers and some researchers claim that neonicotinoids are lethal to bees. Some studies indicate that at non-lethal doses, these chemicals may weaken their immune systems, making them more susceptible to pathogens and, thus, contribute to Colony Collapse Disorder (CCD). First recognized in '06, CCD has destroyed colonies at a rate of about 30% a year, double the loss rate prior to '06, according to the USDA.
The petitioners, which include Beyond Pesticides, the Pesticide Action Network and the Center for Food Safety, state that EPA failed to find that clothianidin does not have any unreasonable adverse effects on honey bees and other insect pollinators and that it failed to consult with the Fish & Wildlife Service as required under the Endangered Species Act.
EPA evaluated clothianidin based on 34 scientific studies and concluded that the chemical poses less risk to workers and wildlife than alternatives. While data show clothianidin is toxic to honeybees, the agency says there's no proven link to CCD from exposure to the pesticide.
The neonicotinoids are currently in the Reregistration Review process under the Federal Insecticide, Fungicide & Rodenticide Act, which requires EPA to reassess all pesticide registrations every 15 years.
Cumulative Regulations Impacts' Assessment Urged
Cass Sunstein, administrator of the White House Office of Information and Regulatory Affairs (OIRA), issued guidance encouraging agencies, including EPA, to carefully assess the cumulative economic costs and other impacts of their rules on small businesses and start-ups "where appropriate and feasible." This guidance (full details atwww.white.gov) is effective immediately.
The guidance could help ease criticisms from Republicans, industry and agriculture that EPA is failing to consider the cumulative adverse economic impacts of its various regulations. Congressional Republicans have introduced several bills to require cumulative economic impacts.
Last September, the House passed H.R. 2401, known as the TRAIN Act, which would require a cumulative impact assessment of several key EPA rules, including the delay two major air rules. Another bill, H.R. 3010, passed the House in December with the support of a number of Democrats. That bill would expand judicial review of rules, limit agencies' discretion to interpret statutes and uncertain science, and require cost/benefit analyses of health-based standards. The White House threatened to veto the latter bill if passed by the Senate.
Environmentalists and other activists were quick to criticize the policy for undermining the ability of agencies to execute their statutory mandates.
IRS Provides Farmers Tips
The Internal Revenue Service (IRS) released 10 key points for farmers regarding federal income taxes/deductions. According to an IRS e-newsletter, the IRS said taxpayers in the business of farming who cultivate, operate, or manage a farm for financial gain, either as owners or tenants, should adhere to the following key points:
Crop insurance proceeds received as a result of crop damage must be included in income, generally in the year they are received;
Regarding sales caused by weather-related conditions, if more livestock and poultry are sold than normal for one year, taxpayers may be able to postpone until next year the gain from selling additional animals;
Farm income averaging may allow taxpayers to average all or a portion of the current year's farm income by allocating it to three prior years;
With respect to deductible farm expenses, ordinary and necessary costs of operating a farm for profit are considered deductible business expenses;
Taxpayers may deduct reasonable wages paid for employees or help hired to perform farming operations;
In the year of the sale, a taxpayer may deduct the cost of items purchased for resale, including livestock and freight to transport it to the farm;
If deductible expenses from operating a farm exceed other income for the year, the taxpayer may have a net operating loss, which can be carried over to later years and deducted;
No deductions are allowed for the repayment of a loan if the loan proceeds are for personal expenses; and
With respect to fuel/road use, taxpayers may claim a credit or refund for federal taxes on fuel used on a farm.
Additional information regarding farm income and deductions can be found in the Farmer's Tax Guide at www.irs.gov/pub/irs-pdf/p225.pdf.
Sales Steady, Shipments Strong
Net export sales for the week ending March 15 were 206,400 bales (480-lb). This brings total '11-12 sales to approximately 11.8 million bales. Total sales at the same point in the '10-11 marketing year were approximately 15.9 million bales. Total new crop ('12-13) sales are 840,500 bales.
Shipments for the week were 318,400 bales, bringing total exports to date to 6.4 million bales, compared with the 9.0 million bales at the comparable point in the '10-11 marketing year.
Effective March 23-29, ’12
Adjusted World Price, SLM 11/16
76.46 cents
*
Fine Count Adjustment ('10 Crop)
0.24 cents
Fine Count Adjustment ('11 Crop)
0.29 cents
Coarse Count Adjustment
1.34 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
13
Limited Global Import Quota (480-lb bales)
871,389
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
97.02 cents
Forward 5 Lowest 3135 CFR Far East
NA
Coarse Count CFR Far East
NA
Current US CFR Far East
100.00 cents
Forward US CFR Far East
NA
'11-12 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-Jan.)
91.09 cents
**
**Aug.-July average price used in determination of counter-cyclical payment
