Issue Update

May 19, 2009 07:00 PM

via a special arrangement with Informa Economics, Inc.

TOPICS: New fuels plan; Dairy export bonus (DEIP); Immigration reform; Antitrust and railroads

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

-- New fuels standards/auto emissions plan does not need congressional okay. The major regulatory initiative unveiled Tuesday by President Obama sets national limits on climate-altering emissions from cars and trucks, and accelerates, increases and alters miles per gallon mandates for autos and trucks. The deal does not require congressional approval. To complete it, the Obama administration will need to finalize several pending decisions, at which point automakers will drop their lawsuits against California's proposed emissions limits. The administration will eventually release proposed rulemaking language that will be open for public comment.

Perspective: Obama's use of executive power in announcing a sweeping plan to curb auto emissions is another clear signal that if Congress fails to give him a cap-and-trade bill, he will take the executive route, even though he wants a congressional bill sent to him.

-- Implications of reactivating Dairy Export Incentives Program (DEIP). Some US dairy groups are urging USDA to reactivate the DEIP, an export subsidy program to help the US compete with exporters who subsidize their products. USDA is mulling the request and is consulting with other agencies, including the US Trade Representative's Office. DEIP has not been active since 2004. A Congressional Research Service report said exports via DEIP would increase demand for dairy products, at least to the extent subsidized exports do not substitute for commercial exports. But the report concluded that DEIP-assisted exports would have a relatively small effect on US milk prices and income for US dairy farmers.

Look for some dairy groups to quarrel with that assessment.

-- Napolitano to continue push for immigration reform. Department of Homeland Security (DHS) Secretary Janet Napolitano said she would continue to press Congress to pass comprehensive immigration reform legislation, including expanded efforts to check on the status of immigrants held in local jails. “The immigration issue is so large you have to create priorities,” Napolitano said during a Christian Science Monitor breakfast. She added the DHS is reviewing an existing effort, known as Secure Communities, that tracks the status of immigrant prisoners. Napolitano said her department’s $55.1 billion fiscal 2010 budget request would direct $112 million to strengthen employment eligibility verification systems and allow for hiring 80 new immigration personnel to work on border security.

She also said she would travel to Canada next week for a meeting with leaders on northern border issues.

-- House panel conducts hearing on measure to extend antitrust law to railroads: A House subcommittee on Tuesday heard from witnesses on a bill to apply federal antitrust law to the operation of rail common carriers. The measure would amend the Clayton Act to repeal existing antitrust exemptions and to extend the applicability of federal antitrust law to all common carriers subject to the jurisdiction of the Surface Transportation Board (STB). It would subject to antitrust review all agreements among rail carriers to pool or divide traffic, services, or earnings. All mergers and acquisitions involving railroads would be subject to Clayton Act § 7 review by the Justice Department and Federal Trade Commission. The measure also would authorize private enforcement of antitrust law for injunctive relief against a rail carrier. In any civil case against a rail common carrier, the district court would not be required to defer to the primary jurisdiction of the STB.

Reaction: J. Michael Hemmer, General Counsel of Union Pacific Railroad Co., cautioned the subcommittee that the proposal goes beyond mere repeal of the statutory exemption provided for the railroad industry. Hemmer, representing the Association of American Railroads, suggested that, if the subcommittee wants to address rail transportation policies, it should work with other congressional committees to craft a coherent, national rail policy that integrates regulation with antitrust jurisprudence. Dr. Mark Cooper, of the Consumer Federation of America, lamented excessive rail rates imposed on shippers because of the “pervasive abuse of market power.”

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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