via a special arrangement with Informa Economics, Inc.
First of two parts on how McCain and Obama size up key issues
NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.
I recently submitted some questions to presidential candidates John McCain (R-Ariz.) and Barack Obama (D-Ill.). Today is part one of a two-part series on how the presidential candidates responded. I will have my comments on the candidates' responses in a future dispatch.
Question: Exports have been one of the bright spots in the current economic situation and US agriculture is one of the few industries that enjoys a trade surplus. What will your administration do on trade issues -- especially relative pending Free Trade Agreements with South Korea, Colombia and Panama, and the lingering Doha Round?
Obama: “Trade is vital to our agriculture sector. About 50 percent of the wheat, 20 percent of the corn, and 35 percent of the soybeans we grow in the United States are exported. These markets increase demand for our homegrown products and provide American farmers with additional revenue. Our farmers are among the most efficient in the world, and if given a level playing field, can compete effectively with anyone in the world.
“There are several steps we must take to remain competitive and expand our access to markets. I support providing full funding to vital market promotion programs that enhance our access to important international markets. I have fought to break down trade and investment barriers that restrict our access to markets and will continue to do so. I supported bipartisan efforts to lift Korea’s and Japan’s bans on American beef.
“It’s also important that we ensure that our trade agreements create a level playing field for American businesses and workers, and that our farmers and businesses secure robust market access as a result of these agreements. Trade agreements must contain strong and enforceable labor and environmental standards so that American farmers are able to compete on a level playing field. I will also continue to support providing resources to research and technology that enhances the productivity and profitability of our farmers.”
McCain: “I believe that globalization is an opportunity for American agriculture. Ninety-five percent of the world's customers lie outside our borders, and we need to be at the table when the rules for access to those markets are written. To do so, America should continue to engage in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field and vigorously defend the rights of American agriculture within global trading rules. I will stand up for producers by holding America’s trading partners accountable under existing and future trade agreements. I support the free trade agreements with South Korea, Colombia and Panama currently pending before Congress. America should continue to push for multilateral agreements within the WTO that are fair to all countries.”
Question: Biofuels have emerged as a major debate point for agriculture as some are framing it in a food vs. fuel context. Is that correct or can we still have a viable corn-based ethanol production system and plentiful food for US consumers?
Obama: “Biofuels are critical to the future of America's energy independence. I have advocated an expansion of the renewable fuels standard, the development of a biofuels distribution infrastructure, research into new feedstocks for biofuels in the future and an expansion of the number of flex-fuel vehicles in the country. Corn-based ethanol is a critical part in achieving this long-term goal as this first generation product helps to create a pathway for future advances.
“I have heard the arguments about a conflict between fuel and food but they appear to ring hollow. A recent study conducted by USDA and the US Department of Energy (DOE) indicates that rising oil prices are the leading cause of rising food prices and that the development of biofuels is an insignificant factor in this trend. Similar results have been found by the Council of Economic Advisors, the Federal Reserve, Texas A&M and Iowa State University.
“With that said, my administration will closely monitor this situation to ensure that a conflict between food and fuel does not arise; we should not be put into a situation where we are deciding whether to feed our children or fuel our cars.
“Finally, I also note that in order to achieve the renewable energy goals that I have outlined, I support the development of alternative feedstocks to create the biofuels that we will need to power our country. Government incentives to test and develop these new technologies in order to get them to market are critical. Everyone acknowledges that we cannot rely on corn alone to provide for all of our renewable fuels needs so we must diversify our feedstocks. The early research being done now indicates that this next generation of feedstocks will come from even more sustainable sources, thus translating into even less potential conflict with food production.”
McCain: “Our nation's future security and prosperity depends on the next President making the hard choices to break our nation's strategic dependence on foreign sources of energy and cut off the flow of oil wealth to repressive dictatorships. I will push our country to make the necessary choices - producing more power, pushing technology such as flex fuel vehicles (FFVs) to help free our transportation sector from its use of foreign oil, cleaning up our air and addressing climate change, and ensuring that Americans have dependable energy sources.
“Bio-fuel technologies of all types will play an important role in supporting this goal. I do not support the current system of tariffs, subsidies and mandates for ethanol or special tax breaks for oil – energy entrepreneurs should have a level playing field. Rather, as a country, we must focus on stimulating end-user demand for renewable energy and creating a consistent regulatory and tax framework that encourages investment in research, domestic refining capacity, and distribution systems to promote energy independence. We must build upon the infrastructure and biofuel technologies that are already contributing to America’s domestic energy production and focus on developing the technologies that will allow us to use the entire biomass of plants so that America’s harvest can continue to support our food, feed and fuel needs without contention between these important requirements.”
Question: Tax policy is a major issue for agriculture interests, specifically areas like the estate tax and capital gains. What are your administration's tax policy plans for these two areas and other areas that would affect agriculture?
Obama: “The central tax policy of my administration will be to lower taxes on 95 percent of all Americans. The only Americans that will see their taxes rise are the wealthiest 2 percent of all Americans-- those making more than $250,000 a year. The overwhelming majority of farmers and ranchers aren't in that income bracket so most producers would see either no increase in their taxes or more likely a reduction in their tax burden. My tax plan also is focused on helping American families in these challenging times by providing tax credits in order to send children to college, tax credits for health care, and making it easier to save for retirement. All of these benefits have been sorely needed on the farm and in rural America during the last 8 years and my administration will deliver them.
“With regard to the estate tax, I have put forward a reasonable policy that would set a generous exemption level of $7 million per couple, effectively repealing the tax for 99.7 percent of estates. For the remaining 0.3 percent of estates that have more than $7 million per couple, I will retain a rate of 45 percent. This policy would cut the number of estates touched by the tax by 84 percent relative to 2000. My plan for capital gains is to maintain the current rate for families with incomes below $250,000. Those in the top two income brackets would pay a new rate of 20 percent, which is equal to the lowest rate that existed in the 1990s and the rate that President Bush proposed in 2001.”
McCain: “I have proposed a comprehensive economic plan that will create millions of good American jobs, ensure our nation's energy security, get the government's budget and spending practices in order, and bring relief to American consumers. Small businesses are critical to job growth, especially in rural America. I am committed to reducing the estate tax rate to 15 percent and permitting a generous $10 million exemption to enable farmers and ranchers to pass along their heritage to the next generation. I will keep the top tax rate at 35 percent, maintain the 15 percent rates on dividends and capital gains, and phase-out the Alternative Minimum Tax. Small businesses are the heart of job growth; raising taxes on them hurts every worker.”
Question: Our nation's financial system is under severe stress. Are the efforts being worked on regarding the US financial system enough to right the ship, or are further actions needed?
Obama: “The events of the last few weeks have shown us that the stakes in this election could not be higher.
“We are in a financial crisis as serious as any we’ve faced since the Great Depression. In recent weeks, we’ve seen our financial landscape shift before our eyes. We’ve seen a growing credit crunch put new pressures on banks, businesses, and families. And in late September, we saw the single largest decline of the stock market in two decades – a decline that threatens not just the wealth of Wall Street executives, but the life savings, jobs, and economic security of millions of ordinary Americans.
“Everywhere you look, the economic news is troubling. Steps taken to strengthen our credit markets are critical to preventing an even further decline in our economy. Fortunately, with good prices agriculture has not felt the pain hitting other sectors of the economy. However, without action, agriculture could also be impacted. Unfortunately, I predicted that the deregulation philosophy of the Bush administration would allow the sorts of excesses and irresponsible behavior that forced our government to act. My opponent, despite his recent statements to the contrary, has spent his political career eliminating regulations and reducing government oversight. There is much work to be done. My administration would reverse this trend toward deregulation and ensure that the American people are protected from these types of systemic excesses in both lending and finance that have brought our country and the global economy to the brink.
“The work does not stop there. I have put forward a vigorous plan that will jump start our economy. We must provide tax relief to the middle class because in my administration wealth will trickle up, not trickle down. We must provide tax incentives that target small businesses which are the engines of our economy and incubators of innovation. Finally, we must invest in research, technology and education for the long-term economic growth of our nation.”
McCain: “The rescue bill is not perfect, and it is an outrage that it's even necessary. But we must stop the damage to our economy done by corrupt and incompetent practices on Wall Street and in Washington. The action Congress took is a tourniquet, not a permanent solution. Our economy is still hurting and further action is needed, and it should not take a crisis to get this Congress to act. Washington is still on the wrong track, and we face a stark choice in this election. We can go backwards with job-killing tax hikes, the same old broken partisanship, and out of control spending as Senator Obama would have us do or we can bring real reform to Washington. My focus is to reform Washington and put government back on the side of working families with tax relief, modern job training, energy independence, more affordable health care, and policies that get spending under control. That's how we're going to get America moving again, and that's exactly what I'm going to do.”
Question: Farmers often are concerned about government regulations negatively impacting their businesses. What areas do you propose to increase or decrease regulations that affect farmers?
Obama: “The most significant regulatory change that will impact agriculture in my administration is my proposal to simplify tax filings so that millions of Americans will be able to do their taxes in less than five minutes. My proposal will ensure that the IRS uses the information it already gets from banks and employers to give taxpayers the option of pre-filled tax forms to verify, sign and return. Experts estimate that my proposal will save Americans up to 200 million total hours of work and aggravation and up to $2 billion in tax preparer fees.
“My administration will also vigorously implement the country of origin labeling (COOL) proposal that has been included in the Farm Bill. Unlike John McCain, who opposed COOL, and this administration, which appears to be again dragging its feet in setting down workable regulations that achieve Congressional intent, my Administration is fully committed to COOL. While farmers and ranchers are not likely to see any regulatory impact, the rest of the agricultural sector, starting with downstream processors will be expected to implement the law and my administration will ensure proper regulatory oversight is in place.
“My Administration also will enforce the packers and stockyards act in order prevent price discrimination. I will also strengthen anti-monopoly laws and modify federal agriculture policy to strengthen producer protection from fraud, abuse, and market manipulation.
“Finally, my administration will set and enforce science-based air and water pollution limits for livestock operations, including limits on nitrogen, phosphorus, hydrogen sulfide, ammonia, and other pollutants. We will strictly monitor and regulate pollution from large CAFOs, with fines for those who violate air and water quality standards. At the same time, we will work with producers to ensure that they have the right mix of incentives to comply with these standards.”
McCain: “When it comes to US agriculture, I have consistently voted for a smaller government and less regulation. I believe in limiting the unnecessary intervention of government regulations that severely alter or limit the ability of the family farm to produce efficiently. As President, I will support improved investment and research incentives to ensure that farmers and ranchers have access to the most modern technology.”
Question: Immigration is an issue that seems to have no answer that all can agree to. What is your position on this topic and what assurances can you give agriculture that there will be a supply of workers to harvest the crops, etc. they produce?
Obama: “I fully recognize that the issues of immigration and labor are critical to agriculture. The agriculture industry relies heavily on seasonal and migrant labor. I helped lead the fight for comprehensive immigration reform in the Senate, and I will make it a priority as president. We need comprehensive reform that secures our borders, fixes our broken immigration bureaucracy, and puts the 12 million undocumented immigrants on a responsible path to citizenship. At the workplace, we need a simple, but mandatory electronic system that enables employers to verify the legal status of the people they hire. We need to make sure we allocate visas in a way that honors America's commitment to family unity and hard work while also leaving room to bring people that America needs to compete in a global economy. We must also ensure that immigrant workers have the full rights and responsibilities, like any other worker in our labor market.”
McCain: “We must prove we have the resources to secure our borders and use them, while respecting the dignity and rights of citizens and legal residents of the United States. When we have achieved our border security goal, we must enact and implement the other parts of practical, fair and necessary immigration policy. We have economic and humanitarian responsibilities as well, and they require no less dedication from us in meeting them.
“I will implement temporary worker programs that will reflect the labor needs of the United States in both the high-tech and low-skilled sectors while protecting the employment opportunities for US workers. I will reform the H-2A visa program to provide a non-bureaucratic, adaptable, useable program that is reflective of market needs and protects both the immigrant and US workers. I will implement a secure, accurate, and reliable electronic employment verification system to ensure that individuals are screened for work eligibility in a real-time fashion and provide responses to employer inquiries in a prompt and timely manner to provide both the employer and employee security in their hiring decisions.”
NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.