Ag Policy Update–15 Jan 03       

(Sunup Program to be aired 16 Jan 03)

  

1.        Congress is back in session, and beginning to work with new leadership.  Let’s talk about the changes and what that might mean for agriculture and agricultural policy. 

Very quickly, let’s first summarize the key leadership positions. 

–The Republicans remain in charge in the House, with Hastert (IN) returning as Speaker, and DeLay (TX) as Majority Leader.

–Hastert and DeLay are moving quickly to consolidate power, selecting chairs on loyalty rather than seniority.

–So there is more likelihood that the House GOP will speak and act with one voice and that voice will support the Bush agenda.

–Pelosi (CA) becomes the first female Minority Leader for the Democrats, and the Democrats are likely to more toward a more solid opposition to the Bush agenda, but they won’t have the mandate to stop the Republican push. 

–In the Senate, the Republicans now hold power.

–After the recent meltdown of Trent Lott, Bill Frist (TN) is the new Senate Majority Leader.  He and his lieutenants are among the more conservative and supportive of the Bush agenda in the Senate.

–Oklahoma’s Don Nickles came very close to becoming the new Majority Leader, but his position as chair of the Budget Committee is still very powerful.

–Daschle (SD) remains in charge of the Democrats, but as Senate Minority Leader.

2.     In the Senate, however, the Democrats still are in charge of the committees.  How can that be? 

–It’s a fight over administrative funds.

–Before the last session of Congress, traditional rules held that the majority party received two-thirds of the funds for committee administration, while the minority party received one-third.

–When the Democrats took over the 107^th Congress, the entire Senate agreed that funds would be split 50-50.

–With the leadership now in the hands of the GOP, they now want to go back to the old rules of 2/3-1/3.

–Daschle and the Demos have threatened to filibuster.

–This problem will be resolved within the next week or two, probably in a compromise, and the committees’ leadership will formally switch to the Republicans.

3.     So, how will this all-Republican leadership play out for agriculture? 

–First of all, I don’t think there will be any major changes in agricultural policy.

–But, marginal changes will certainly be promoted. 

–We now have more “budget hawks” in key leadership positions.

–So, they are going to be much less likely to promote and support calls for new money or additional money. 

–Given that the Bush economic plan will call for acceleration and expansion of tax cuts, the federal budget deficit will worsen, unless cuts are made in existing programs.

–Since the GOP Congressional leadership has voiced support for the Bush proposals, this likely means they will also be finding domestic programs to cut, and agricultural programs will be on the list for some cuts. 

–War or threat war will add funds to the Defense budget, and make cuts more likely. 

–Some insiders are already saying the first casualties will be

(1)    no disaster aid for ag, or at least it will be a greatly reduced package.

(2)    conservation program spending will likely be cut.

(3)    while not as likely, the cutting mentality could be used to justify more severe payment limits, similar to what was proposed by the Senate in the 2002 farm bill debate. 

4.     As we look at leadership down at the committee level, some positions have not yet been named but we do know who will be chairing the Agriculture Committees.  Let’s talk about that. 

–Thad Cochran (R-MS) now chairs the Senate Ag Committee.

–Bob Goodlatte (R-VA) is the new chair of House Ag Committee, and the first chair from the East in some time.

–Cochran, in the past, has been an innovator for new ideas on farm policy, but he will be a supporter of the 2002 farm bill, perhaps more willing to consider cuts in conservation programs.

–Of course, he’ll also be an ardent defender of program support for cotton and rice, and will be unwilling to support the cuts that new payment limits would bring.

–Remember that Cochran is from the state that invented the so-called Mississippi Christmas tree, one of the more innovative legal maneuvers to avoid payment limits.

–Cochran will also chair the Ag Appropriations Subcommittee. 

–Goodlatte, has been a loyal soldier of the House GOP leadership and the Bush agenda.

–He is the Rep from the Shenandoah Valley of Virginia, which has all the state’s poultry and most of the dairy, and about 30-40% of the total value of agriculture.

–He will also be a supporter of the 2002 farm bill, and is likely to promote more emphasis on livestock issues, and programs that are livestock industry friendly such as whole-farm revenue insurance.

–He may also be willing to see cuts in conservation spending, except where the programs aid the livestock sector, like EQIP.

5.     Will the new composition of membership of the two ag committees matter much? 

–New personalities always make the dynamics interesting.

–Whether the new members will make much difference remains to be seen.

–Some members have yet to be named, but there will be more changes in the House Ag Committee.

–Of the 52 slots on the House committee, at least 12 members will not be back because of defeat, resignation or retirement.

–With several others have indicated a desire to move to other committees, we’ll likely see at least 25% new members.

–Lucas remains the OK rep on the House committee and will continue to chair a subcommittee.

–With all the changes, Lucas is now one of the most senior Republicans on the House committee, although Hastert & Delay have made seniority less important. 

–On the Senate side, there are 21 slots, and at least 5 are gone because of retirement, defeat, death and movement to other committees.

–The new members are Dole (NC), Grassley (IA), Talent (MO), Coleman (MN), Chambliss (GA)

–Assuming there no changes on the Demo side, that puts the regional representation like this:

(1)    Midwest: 12

(2)    South: 6

(3)    West: 2

(4)    Northeast: 1

–Oklahoma hasn’t been represented on the Senate Ag Committee since Sen. Boren left office.

 

6.     One quick question before we go about how commodity program signup is going. 

–The latest from the Oklahoma office of FSA is that 50% (about 26,000 farms) have made base and yield elections.

–While that’s a bit behind some other farm states, producers still have until 1 April to signup. 

7.        Looking at the weeks ahead, what issues are already being raised to make for healthy debate in Congress? 

–Here’s a brief list:

(1)    wrapping up the 2003 11 appropriations bills

(2)    disaster aid for ag

(3)    the Bush proposal to relax restrictions on some wetlands, including prairie potholes

(4)    consideration of the Bush economic recovery plan and the new 2004 federal budget, along with the unfolding economic news

(5)    relaxing restrictions to drilling for oil and natural gas on federal lands, including the ANWR and the West

(6)    how the Bush Administration deals with the war on terrorism, and the potential for war in Iraq and North Korea. 

8.        Congress: 

a.        Recent activity:

–Congress convened for the new 108^th Session. 

b.        Current/upcoming:

–Committee membership appointments, the agenda and developing a strategy for the new leadership is taking up much of the time.

–Another continuing resolution was passed to continue spending until the end of the month. 

c.        2003 schedule:

–to be announced 

d.        Key issues not completed

–11 of the 13 FY03 spending bills

–Healthcare reform

–Prescription drug benefits

–Merger activities, especially in agriculture

–Emergency assistance for agriculture

–Response to economic slump

–Comprehensive energy legislation (& status of renewable fuel standards)

 

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