Want a Big Loan? Just Ask the Federal Reserve

Published on: 12:35PM Sep 17, 2008

By Jim Wiesemeyer
via a special arrangement with Informa Economics, Inc.

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-- Farm Bill writers really goofed up when they took way too long to find $10.3 billion in budget offsets: It seems all they had to do was ask the Federal Reserve for the money!

-- Farm Bill writers also goofed up when detailing the Average Crop Revenue Election (ACRE) program: When will the so-called smart legal writers on Capitol Hill ever understand that if you give a Republican administration -- and one increasingly being driven by budget types at OMB -- the chance, they will make sure they will interpret legislative language the way they see fit, and not the "intent" of Congress. Here is what the ACRE language says: "The ACRE program guarantee price for a crop year for a covered commodity or peanuts in a State shall be the simple average of the national average market price received by producers of the covered commodity or peanuts for the most recent 2 crop years, as determined by the Secretary." The smart way to write it: "The simple average of the national average market price received by producers of the covered commodity, or in the case of the most recent year, a projection of the price, for the most recent 2 crop years, as determined by the Secretary, but the ACRE program guarantee can be no lower than the announced guarantee." All those Harvard types had to do was look how the counter-cyclical loan program works. Jeez.
More comments:  The key decision here is whether USDA and OMB use the 2006 and 2007 or the 2007 and 2008 marketing years for season average prices as it would make a difference of "billions of dollars" in payments, according contacts. One government source also points out, "Not knowing the guarantee when producers sign up for the first year of ACRE shouldn't be a major deal as they are in ACRE for the rest of the bill and certainly don't know the guarantee for those two, three and four years down the road."

-- The bailout tab so far: Reuters reports the following: "With the $29 billion the Fed pledged to swing the Bear Stearns sale to JPMorgan in March, $100 billion each to rescue mortgage finance firms Fannie Mae and Freddie Mac, as much as $300 billion for the Federal Housing Authority, the $85 billion loan to AIG and various other rescue deals and loans, taxpayers (that is you and me) are potentially on the hook for more than $900 billion." My comments: Your government at work. Now tell me why budget deficits don't matter?

-- Talk about a lot of money... The General Accountability Office (GAO) issued its regular report on total funding for the global war on terrorism. The September report notes that total spending since 2001 totals more than $807 billion, still below the "war on corporate and banking greed" for the U.S. financial institutions.

-- NFU: Loophole stands in way of COOL: Will we ever get the country-of-origin labeling (COOL) implemented for meat and meat products? National Farmers Union (NFU) today expressed disappointment in USDA's interpretation (there is that word, again) of the COOL provision in the 2008 Farm Bill and urged the department to immediately reinterpret the provision. COOL is scheduled to go into effect October 1, 2008. NFU was joined by R-CALF USA and the U.S. Cattlemen's Association in a letter to USDA Secretary Ed Schafer expressing concern over reports large meat processors intend to circumvent both the intent and letter of the labeling law. "The law clearly states that products born, raised and slaughtered in the United States are to be labeled as a product of the United States. Despite this clear language, USDA's rules will allow packers to label exclusively American products with those from other countries," NFU President Tom Buis said. The farm bill language explicitly states exclusively born, raised and processed U.S. animals cannot be used in the multiple country category (category 2). "USDA has created a loophole big enough to drive a truck through, violating the spirit, letter and intent of the law and deceiving consumers who have consistently shown support for buying U.S. products," Buis said. "This is about truth in labeling." The COOL provision in the farm bill was a compromise agreement that creates four labeling categories: Products exclusively born, raised and processed in the United States would be labeled as a U.S. product; Products from animals that were not exclusively born, raised and processed in the United States and not imported for immediate slaughter be labeled with all countries in which the animal may have been born, raised or processed; An animal that was imported for immediate processing may be labeled as a product of the importing country and the United States; and Animals that were born, raised and processed in a foreign country will be labeled as a product of the country of origin. "We negotiated in good-faith, offering flexibility for processors to transition their facilities to appropriately segregate animals," Buis said. "Yet processors have been clear about their intent to take advantage of our efforts. This is a disservice to COOL."

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