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Policy Journal

November 13, 2009
By: Roger Bernard, Farm Journal Policy and Washington Editor
 
 

Climate Change Focus Moves to Senate

Ag interests were not uniformly pleased with the House version of climate-change legislation—and the initial offering from the Senate (S. 1733) didn't help matters much.

The package, put together by Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.), did have at least one change that some in agriculture liked—a supplemental allowance program that could help conservation efforts that have been in place for a while, rewarding early actors. Indications are the program would be designed by USDA and the Interior Department to provide financial assistance to those with ag and forestry land that reduces greenhouse gas emissions or increases carbon
sequestration. Since these wouldn't qualify under the House plan if they were in place before 2001, the program could woo their support of the package. It could also help farmers use the carbon market who otherwise might not be eligible.

Missing from the plan, though, is a House provision that would prevent the Environmental Protection Agency (EPA) from using regulations to achieve climate-change goals. Senate Finance Committee Chairman Max Baucus (D-Mont.) and other lawmakers have groused about this development. Allowing the EPA a free hand "takes us further away from an achievable consensus [and] commonsense climate-change legislation,” Baucus says.

In its analysis of the Senate package, EPA says the differences between the plans are so small that the economic costs "would be similar.” Their bottom line: Agriculture would realize "net annualized benefits of $1.2 billion to $18.8 billion.”

The Senate package will change, possibly substantially, by the time it reaches the floor. At press time, hearings have started in the Environment and Public Works Committee. The bill could also have to go through hearings in the Agriculture, Foreign Affairs, Commerce and Finance committees before it is ready for the full Senate.

 



Estate Tax Not Likely to Die

With the estate tax set to disappear in 2010, lawmakers are scrambling to extend the levels that are in place for 2009—a $3.5 million exemption per person and a 45% tax rate beyond that—for at least one more year.

However, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) warns that the estate tax situation won't be addressed until after the House takes up health-care reform legislation and a package of initiatives intended to create jobs and jump-start the economy.

At issue is whether a one-year extension will be passed or if lawmakers can muster enough support for a multiyear fix. But the latter option would come with a cost, due to the way the government's budget-making process works.

For example, if the 2009 levels are extended for just one year, it would result in savings: The current budget assumption is for no estate tax in 2010, so putting one in place for that year would bring in additional revenue.

In 2011, the tax is poised to come back, but at much harsher levels—a $1 million exemption and a 55% rate. So if the 2009 levels are kept in place for 2011 and beyond, it will cost, as there would be fewer taxes collected.

What are the numbers? A permanent extension of current estate tax rates would cost $233.6 billion, while a one-year extension would raise about $1 billion.

There are efforts out there to create a longer-term fix that would eventually raise the exemption to $5 million per person and a 35% rate for estates beyond that level.

However, putting such a plan in place will not be easy. One thing is certain: The death tax is not likely to die anytime soon, not even when it's supposed to in 2010.

 



Policy Briefs

Taiwan–U.S. beef trade. The U.S. and Taiwan signed a protocol to expand access for U.S. beef. Bone-in beef could start arriving in Taiwan soon.

USDA/DOJ competition workshops. The first of several USDA and Department of Justice (DOJ) public meetings on competition in agriculture will start in mid-March, including sessions in Iowa, Wisconsin and Colorado, as well as other locations.

World Trade Organization cases. The U.S. blocked the first request for a dispute settlement panel to look at U.S. mandatory country-of-origin labeling (COOL) for meat products, but it won't be able to block a second request for a panel from Mexico and Canada. Meanwhile, the Euro-pean Union (EU) blocked the U.S.'s request for a panel to examine an EU ban on imports of U.S. poultry treated with antimicrobial chlorine rinses.

 

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FEATURED IN: Farm Journal - Mid-November 2009

 
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