31  October 01 
(Sunup Program to be aired 1 November 01)  

1.                  The Farm Bill debate continues to move forward with the Senate Ag Committee beginning markup yesterday.  What’s the latest?

–The past week has been very interesting. 
–Ranking Minority member Sen. Lugar’s proposal for a new farm bill was given a qualified blessing by Secretary Veneman.
–Senate Ag Committee Chair Tom Harkin began to leak a draft of a proposed new farm bill, then quickly began to modify it.
–Senate Majority Leader Daschle, Senate Budget Committee Chair Conrad, and Ag Committee Democrats Wellstone & Dayton of Minnesota criticized Democrat Harkin’s changes.
–Harkin announced he’s trying for a bipartisan bill that will be accepted by the President.

2.                  So we’ve got the Harkin bill, the Lugar bill, the House version, and key Democrats and the President pushing different agendas.  Let’s look at some of the details.

–The Harkin bill that was introduced to begin markup in the Senate Ag Committee yesterday costs about the same as the House bill–$170 billion over 10 years.
–The Harkin bill, like the House bill, continues flex payments, adds a new countercyclical payment program, and adds funds for conservation programs.
–The Lugar bill is a 5 year bill with less funds.
–Lugar would replace flex payments with subsidy vouchers for individual risk management options such as revenue assurance, and phase out LDPs.
–Lugar would also have more funds for conservation.
–The Harkin countercyclical program is different than the House version: 
–the House bill bases countercyclical payments on a target price formula.
–the Harkin bill sets target revenues by commodity makes prorated payments to producers when the market doesn’t meet those targets.

3.         What are some of the differences from the House version that the Senate is considering?

–There are few details yet, although Harkin may begin hearings this week or next.
–Harkin wants more emphasis & funds on conservation, and earlier this year introduced a Conservation Security Act that could be proposed for the conservation title of the bill.
–He also wants to end or phase out transition payments and shift to a counter cyclical payment program.
–His idea evidently differs from the House in that payment is a composite of all support such as flex payment, crop revenue, loans, & deficiency payments; it would also be triggered by state and not by crop.
–Senator Grassley (R-IA) may introduce a commodity title that includes a payment similar to the transition payment, but adjusted for exchange rates, weather, & other counter cyclical patterns, hoping to avoid market distortions and WTO problems.
–Senator Lugar (R-IN) is considering proposing a price revenue assurance program with risk management options.
–A coalition of influential Republican & Democratic senators are pushing for an amended version of the House bill.
–Several senators want a competitiveness title in the bill to either slow mergers or assure broad market access.

4.         You mentioned that the President is worried about the economy.  What’s the latest update?

–Most indications are that the US is very close to a short term recession.
–There was little to no growth in the first 2 quarters of this year.
–Some thought the economy was contracting before the terrorist attacks of 11 Sep, and the trend worsened since then.
–The Fed interest rates are the lowest in 4 decades (2.5% federal funds rate, 2% discount rate), and some think there will be another drop in the next month.
–Several sectors are struggling financially, with industrial production the latest category to show a drop.
–Consumers haven’t returned to their pre-11 Sep spending patterns and, in fact, there was a record drop in retail sales last month.
–Fed Chair Greenspan testified to Congress yesterday, indicating he remains optimistic about the long-term, but was unwilling to hint at what actions, if any, the Fed will take 6 Nov.
–The technical definition of a recession is 2 consecutive quarters of a shrinking economy.
–It will be mid-January before we can say if both the 3d & 4th quarters of this year in fact declined.
–The economic stimulus package in Congress may help, but perhaps not that soon.
–Consumers seem to be the key to quick recovery.

5.            Speaking about Congress, what’s the latest on the spending bills?

–The second continuing resolution was passed last week, set to expire 23 Oct.
–This means the government can operate in fy 02 (which began 1 Oct) without spending approved.
–As of this week, here’s the status of the 13 spending bills:
–0 passed by Congress
–0 signed by the President
–6 passed by both House & Senate & in conference
–2 reported out of conference
–Ag Appropriations is among 4 bills awaiting Senate debate/passage

6.         There was some movement in Congress this past week on trade negotiating authority.  Any breakthroughs?

–Trade Promotion Authority, formerly known as fast track negotiating authority, passed the House Ways & Means Committee.
–The next step is the House Floor vote, where the vote is expected to be close but likely pass.
–The Democratic leadership would prefer to have more coverage on labor and environmental issues, and even House Ag Committee Chair Combest and Ranking Minority leader Stenholm are witholding support.
–This authority allows the President to negotiate trade treaties that Congress cannot amend, but only approve or disapprove.

7.            Congress:

a.            Recent/Current:

–Primary focus on spending bills and terrorist attack response

b.            Upcoming:

–Senate Ag Committee continues hearings on next farm bill, supposedly this week
–Senate Ag Committee hearing, Boise, ID, 27 Oct.

 c.            Congressional Calendar:

–The target adjournment date has passed; date of adjournment unknown. 

 d.         Key issues for this session of 107th Congress include:

–dealing w/war effort & acts of terrorism
–completing/continuing progress on the next farm bill
--dealing w/Social Security, Medicare, Medicaid
–consider debt reduction & appropriations bills
–campaign finance reform
–education reform
–prescription assistance
–moratoria on mergers in agribusiness
–Endangered Species Act reform
–energy policy reform
–Trade Promotion Authority (TPA–formerly Trade Negotiating Authority TNA, formerly fast track authority FTA)

 

 

 

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