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January/February 2011 |
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| State of the Union Looks to Innovate
for Jobs |
The President smiled and glad-handed as he slowly
walked down the rarely mixed aisle of a Joint Session of
the House and Senate on January 25, 2011. Seating assignments
intentionally mixed Democrats and Republicans as a
testament of solidarity in the wake of the recent shooting of
Congresswoman Gabrielle Giffords and supporters attending
a local meet and greet in her home AZ district. At the top
of the chamber alter, Vice President Joe Biden stood next to
newly positioned Speaker of the House, John Boehner, who
introduced the President.
The President opened his remarks with those of working
together but focused on innovating and educating to “win the
future.” He told Members of Congress that the United States
needed to “out-innovate, out-educate, and out-build the rest
of the world” in order to not just stay competitive but to remain
in our position of global power. President Obama called
this our “Sputnik moment,” referring to a time in the late
1950’s when Russia’s Sputnik satellite was the first to reach
space. An unmatched national commitment to increase and
invest in space technology followed the event and the United
States was the first to step foot on the moon.
It is this commitment to invest in innovation, renewable
energy, and broadband expansion that the President is counting
on to invigorate employment and job creation. The President
called on Congress to eliminate the billions of tax cuts
given to oil companies and create a market for renewables
that can make their investment worth the effort. He proposed
that by 2035, 80 percent of all electricity used in the U.S.
would come from clean energy sources, such as clean coal,
natural gas, wind, solar, and nuclear. With regard to broadband
expansion, the President said he would make it possible
in the next 5 years for businesses to deploy high-speed internet
to 98 percent of all Americans.
In education, President Obama called for more investment
innovating our schools and establishing a heavier focus
on science and math, where the U.S. consistently falls behind
other less developed nations. With keen attention to a certain
more-watched football game coming up in the next week,
he said “ We need to teach our kids that it’s not just the
winner of the Super Bowl that needs to be celebrated, but
the winner of the science fair.” He asked for the Tuition Tax
Break to be made permanent and that we take a new look
at the role our community colleges are playing in training
tomorrow’s workforce and those who have been forced into
second and third careers to stay competitive.
The President called for Congress to help simplify the
tax code and help businesses grow by expanding trade and
exports. In his coverage of the nation’s astounding debt,
he denounced how the government is spending more than
it is taking in and offered several solutions to begin reigning
in spending. President Obama called for freezing domestic
spending for 5 years, but also noted that domestic
spending only consists of about 12% of our budget and that
just isn’t enough. Other parties that will be affected are the
budgets of Medicare and Medicaid, a closer look at medical
malpractice reform, and restructuring social security
without “throwing it to the whims of the stock market.” He
addressed the harsh criticism which his health care reform
bill has received from both sides of the aisle and admitted
that all things have room for improvement; “Let’s fix what
needs fixing and let’s move forward.”
Additionally, he once again targeted the tax breaks for
the top 2% of U.S. income earners as well as committing to
a drastic reduction and reorganization of the Federal Government.
The President aims to make the Federal Government
smaller and more efficient, because in his eyes, “We
can’t win the future, with a government of the past.” 
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| Landscape of Power Changed By
Mid-term Elections |
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Newly elected Speaker of the House, John A. Boehner |
On November 2, 2010, the
balance of power in Washington
D.C. and throughout the
country changed drastically and
placed an Ohioan as the new
Speaker of the House. One of
13 children, raised in Southwestern
Ohio, Speaker John
Boehner will have the momentum
of 242 Republicans and out
of that, 63 freshman. The wins
in the house for the GOP signaled the largest pick-up since 1994.
In the Senate, although the democrats still hold the majority,
republicans picked up a total of six seats and successfully
defended all of their republican-held seats that were up for
election, leaving the ratio at 53-47 and Senator Harry Reid of
Nevada returning as Senate Majority Leader.
The elections will have a huge impact on the leadership
of all House Committees as well as shrinking the veto margin
in the Senate. So what does all this mean? Three things are
likely to happen in the first several months:
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Healthcare – a proposal to repeal several of the more
controversial sections of the Healthcare Reform
measure passed in 2009.
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Budget – a proposed budget that will come out of
the House, will most likely call for spending levels
to be set at or below 2008 levels. The Senate
will most likely go along with less drastic cuts in
spending and draft a proposal calling for a freeze at
current levels. Regardless of which measure goes
to President Obama, both parties will have to agree
on a continuing resolution or CR before the middle
of March, in order to keep the Federal Government
operating.
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Jobs – both parties will seek to pass legislation that
create jobs. Look for a package that stimulates small
business and reduces regulation on business from the
House and a measure containing an investment of
federal dollars in the renewable energy sector from
the Senate.
With the U.S. House and Senate now having closer numbers,
there is sure to be contention as both parties face a mandate
from last fall’s voters to cut spending and put America
back to work, but it will also force compromise on some key
issues that have not been dealt with in over 18 months.
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| EPA Compliance Question Slows
Mexican Tariff and Trucking
Negotiations |
In March of 2009, the Mexican Economy Secretary issued
a press release announcing that the Economy Mexican government
was increasing tariffs on 89 U.S. exported products. Almost
six months later, the Mexican government issued a second
press release increasing tariffs on an additional 10 U.S. products.
The Mexican government was sending a reminder and an
estimated $2.4 billion worth of trade tariffs hung in the balance.
The bad trade blood stemmed over a section of the North
American Free Trade Act (NAFTA,) which ensured that Mexican
trucks could have access to U.S. roads, and the expiration
of a pilot program which the trucks were operating under since
2007. In 2009, President Obama let this expire, and thus prohibited
Mexican trucks access to deliver goods across the border.
Although the Mexican government requested the situation
be addressed as a breach of NAFTA, the White House and the
Department of Transportation were silent on the issue. Unions,
such as the Teamsters, opposed allowing the Mexican trucks
back on U.S. highways, claiming that it would add to the current
historical rate of U.S. unemployment and create greater
opportunity for drug cartels to expand further across the U.S.
border.
Over the last two weeks, the White House has broken its
silence on the issue and has extended an olive branch to Mexico
to reopen negotiations. Secretary LaHood is finally engaged and
taking action and the producers are waiting with baited breath.
However, a new kink in the chain of progress has occurred. The
head of Mexico’s largest trucking organization, Juan Carlos
Munoz, has made it public that U.S. environmental emissions
standards are too high for Mexican trucks, citing a lack of capacity
to supply the cleaner diesel required by the EPA.
It has been almost 2 years since the first round of Mexican
tariffs were announced and 17 years since the passage of
NAFTA.
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| Farm Bill Blues |
As the Republican-led House settles into their Washington
duties, topics such as the 2012 Farm Bill are coming into discussion.
Since the November elections, several changes have
occurred to the Senate Committee on Agriculture, Nutrition,
and Forestry that are sure to have an impact on the provisions of
the 2012 Farm Bill. For starters, as previously expected, Debbie
Stabenow (D-MI) took over as Chair, and Pat Roberts (R-KS)
took over as the Ranking Member.
Stabenow has a strong background in agriculture, as her
first bill as a member of the House was the Wheat and Barley
Protection Act of 1997. Roberts also has a strong agricultural
background, with a particular focus on wheat production. John
Boozeman (R-AR) and John Hoeven (R-ND) also joined the
committee. Hoeven’s assignment will allow North Dakota to
join Iowa and Nebraska, two of the largest producers of corn
and soybeans, in having two members on the committee. Several
changes have been made to the House Agriculture Committee
as well, including Frank Lucas (R-OK) becoming chairman.
In the past, Lucas has been a strong supporter of safety net
programs, as well as conservation programs aimed at helping
farmers maintain their land.
Issues sure to influence the construction of the 2012
Farm Bill include budget allocations, farming subsidies, and
the Brazilian cotton conflict. Obviously, with Congress on a
mission to cut spending, agricultural subsidies, commodity
programs, environmental programs, and crop insurance programs
are in danger of reduction. Tara Smith, director of congressional
relations for the American Farm Bureau Federation
stated; “38 programs in the 2008 Farm Bill have absolutely
no budget. If we want to continue those programs…money
will have to be taken from someone else to do it” (Smith).
In fact, these 38 programs would require about $9 billion in
funding; a large sum which will be hard to squeeze from other
programs.
To see more of this blog go to: http://nationalgrange.blogspot.com/.
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| National Grange Weighs in on the
STOP ACT |
In late January, the National Grange joined other
members of the Commodity Markets Oversight Coalition
in sending a letter to Senator Ron Wyden to ask for his
continued help in passing the “Stop Tax-breaks for Oil
Profiteering Commodity Speculation Act,” a bill that seeks
to level the playing field between speculators and end-users
of commodity future markets.
Currently, speculators are able to invest in U.S. Commodities,
including oil, gasoline, heating oil, wheat, soybean,
cotton, and other agriculture commodities. The bill
would tax gains and losses of any non-commercial commodity
speculator, such as hedge funds and index investors,
the same way commercial participants are taxed as
if they were ordinary gains and losses. Gains and losses
for non-commercial investors are currently taxed as capital
gains and losses at 15 percent rather than ordinary gains
and losses that commercial users must pay. Gains made
on oil, refined products and agriculture commodity investments
would no longer be eligible for lower capital gains
rates.
The legislation would also end tax breaks that favor
tax-exempt commodity investors, like pension funds or
endowments, over commercial traders. At present, tax exempt
organizations and funds pay no taxes on their commodity
investments. This bill would require gains from
any kind of commodity trading to be defined as “unrelated
business taxable income” (UBTI) and taxed at the same
rate as other taxable income.
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| 1099 Burden Opposed by National
Grange |
The National Grange joined other agricultural organizations
to support the repeal of the new IRS Form 1099 filing
requirements in a letter to Senators Mike Johanns and Max
Baucus. While this new provision might improve tax compliance,
it is certain to make record-keeping costs for our members
skyrocket.
Farms, ranches and related agri-businesses already are overburdened
with tax paperwork and reporting requirements.
Under existing law, a Form 1099 must be issued to unincorporated
service-providers that are paid more than $600 during
a tax year. Under new reporting rules set to start in 2012,
Form 1099s will be required for payments to incorporated
vendors and will be expanded to cover payments made for
goods as well as services. Virtually all business-to-business
transactions will be covered, creating a new major paperwork
burden for the farms, ranches and related agri-businesses.
The business of producing food, fiber and fuel is a handsome
venture where productivity and competiveness is compromised
by government rules and regulations that turn producers
into bookkeepers. The letter, dated January 31, 2011, asks
that prompt action be taken by Congress to reverse this onerous
tax-reporting requirement.
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| Legislative Round-Up |
Wisconsin State Grange Engages
State Leaders to Modernize
Telecom Plan
Wisconsin State Master, Duane R. Scott, recently
signed onto a letter with the Wisconsin
Technology Council and Wired Wisconsin which
calls on the Wisconsin legislature to modernize the state’s outdated
Telecommunications Act. As consumers and businesses
have moved on to wireless and broadband technologies, other
states have updated their telecommunications laws to reflect
this new world job creation and economic growth. Wisconsin’s
telecommunications law was last updated in 1994, while neighboring
states like Indiana, Michigan, and Ohio have updated
their telecom laws and have seen investment and jobs follow.
Maryland Holds Legislative Day
The Maryland State Grange is planning a Grange/Farm
Bureau Legislative Day on Saturday, February 12, 2011 at 9
am at the New Midway Fire Hall, New Midway, MD. County,
State and National issues will be discussed by legislators. Contact
person - Donna Wiles, Master, Frederick County Pomona
Grange#11, 301-829-0545.
Ohio State Legislative Day
Ohio’s Annual Legislative Day is schedule
for March 19, 2011, from 9:30 am to 3:15pm, at
our Grange Camp: Friendly Hills Camp, Zanesville,
Ohio. So far the topics are the Ohio AgrAbility
program, the Ohio Second Harvest program
and The Ohio Project, a petition program
to change the Ohio constitution regarding the
health care bill. Contact person for the Legislative
Day is Lisa Tharp, Ohio Grange Legislative
Director, 740-694-9955, jl.tharp@earthlink.net.
Vermont Legislative Day
Vermont’s Legislative Day is to be held Thursday, April
28, 2011 at the State House in Montpelier, Vermont. Come
join other Vermont Grangers to discuss legislative issues
New Jersey Legislative Day
New Jersey’s Legislative Day is to be held on Thursday,
April 21st at the Rutgers Eco Complex in Bordentown. The
contact for the event is Claire Grissett. She can be reached at
908-782-6832. |
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