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Congressional & Administration News
Senate Passes Stopgap U.S. Government Funding to Avoid Shutdown
The Senate passed a stopgap measure on Thursday to avoid a potential U.S. government shutdown this weekend, as talks continue on a $1.1 trillion spending plan and a separate measure to revive dozens of tax breaks. The measure, passed by voice vote, would finance the government through Dec. 16. It requires approval by the House, which plans to vote on it on Friday, one day before current funding is set to expire.
Lawmakers and the White House are negotiating over a list of policy changes that Republicans insist on adding to the spending bill, including lifting a 40-year-old ban on the export of most U.S. crude oil, and blocking Syrian refugee resettlement in the U.S. House Democrats announced their own demand on Thursday, which would use the spending bill to remove a nearly two-decade-old ban on research about gun violence by the Centers for Disease Control and Prevention. The gun research issue is among the items under discussion. A text of the spending bill may be released this weekend to prepare for a House vote by the middle of next week.
Congress is simultaneously negotiating two fiscal measures, one that would fund the government through September 2016, and another that would extend several dozen expired tax breaks that need to be renewed before year-end. The bills aren’t connected in any substantial way, except that lawmakers are now using horse-trading on the tax extender bill help reach a compromise on the spending measure.
With the 2016 election nearing, Republicans want to avoid a repeat of the 16-day federal government shutdown in 2013 that hurt their standing in public opinion polls. On the tax extensions, Republicans are pushing to make a number of business incentives permanent. Those include the business research and development tax credit, and a break that allows small businesses to take a larger depreciation allowance for an asset’s value during the first year after purchase. Democrats, meanwhile, seek a permanent extension of the current Child Tax Credit, the Earned Income Tax Credit and the college-tuition tax credit, which are set to expire at end of 2017. The tuition tax credit provides as much as $2,500 per student for people with adjusted gross incomes as high as $80,000 for individuals and $160,000 for families.
Among other items awaiting renewal is a sales tax deduction that’s popular in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming because those states don’t tax income. Some Democrats want at least a 10-year extension of wind and solar tax breaks, in exchange for lifting the ban on U.S. crude oil exports as part of spending bill. Democrats think those tax breaks should be tied in terms of size and scope to any benefits oil companies receive from lifting the export ban.
Also at issue is whether the spending bill will include a Republican proposal, opposed by Democrats, to block Syrian refugee resettlement in the U.S., as well as a plan backed by both parties to tighten a visa waiver program that eases travel to the U.S. for some 20 million people a year. Both topics become priorities for many in Congress following terrorist attacks that killed 130 people in Paris in November and 14 in San Bernardino, California, on Dec. 2.
USDA Announces Enrollment Period for Safety Net Coverage in 2016
U.S. Department of Agriculture (USDA) Farm Service Agency (FSA) Administrator Val Dolcini today announced that producers who chose coverage from the safety net programs established by the 2014 Farm Bill, known as the Agriculture Risk Coverage (ARC) or the Price Loss Coverage (PLC) programs, can begin visiting FSA county offices starting Dec. 7, 2015, to sign contracts to enroll in coverage for 2016. The enrollment period will continue until Aug. 1, 2016. The choice between ARC and PLC is completed and remains in effect through 2018, but producers must still enroll their farm by signing a contract each year to receive coverage.
Producers are encouraged to contact their local FSA office to schedule an appointment to enroll. If a farm is not enrolled during the 2016 enrollment period, producers on that farm will not be eligible for financial assistance from the ARC or PLC programs should crop prices or farm revenues fall below the historical price or revenue benchmarks established by the program.
The two programs were authorized by the 2014 Farm Bill and offer a safety net to agricultural producers when there is a substantial drop in prices or revenues for covered commodities. Covered commodities include barley, canola, large and small chickpeas, corn, crambe, flaxseed, grain sorghum, lentils, mustard seed, oats, peanuts, dry peas, rapeseed, long grain rice, medium grain rice (which includes short grain and sweet rice), safflower seed, sesame, soybeans, sunflower seed and wheat. Upland cotton is no longer a covered commodity.
The ARC and PLC programs were made possible by the 2014 Farm Bill, which builds on historic economic gains in rural America over the past six years, while achieving meaningful reform and billions of dollars in savings for taxpayers. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life in rural America.
Federal Employee New
$15 Minimum Wage? Labor Economists Still Not Sure
The fight for a $15 per hour minimum wage began as a worker organizing demand and is picking up support from a growing share of Democratic politicians, but even some liberal economists wonder if that number is too high. A wide range of labor economists favor increasing the federal minimum wage from its current $7.25 rate. Although many are fearful about the possible job losses that could come with going all the way up to the $15 per hour.
The right answer is that no one knows the impact this will have, and it's not exact science. Just because economists sign a letter in favor of a wage raise doesn't mean they're sure about how well the hike will work out. Two-thirds of nearly 50 leading economists, including those in labor and other focus areas, either agreed or were uncertain when asked if a federal minimum wage of $15 by 2020 would substantially reduce the employment rate.
Any economist who believes that they know where the sweet spot is, is talking beyond the data. Certainly there are some places in the country where $15 is not a big deal, but there are other places where wages are much lower and it would be a big deal. The genesis of the $15 figure can be likely pinpointed to a day-long walkout in 2012 by some 200 fast-food employees in New York City. That action sprang from a campaign backed mostly by the Service Employees International Union, with the stated goals of achieving at least $15 per hour and union representation rights for fast-food workers.
Three years later, those two demands have not been met, but the campaign, now known as the Fight for $15, has spread to hundreds of cities and other industries such as retail, home care and airport passenger services. Their 14th and most recent coordinated day of action was Nov. 10 in 270 cities. Under considerable financial and strategic support from the SEIU, the effort has also played what some see as a major role in the passing of $15 minimum wage ordinances in three West Coast cities.
A pair of Democrat-backed bills to raise the federal minimum wage to $12 and $15 respectively is unlikely to move in Congress. Still, the fast-food movement and growing number of state and local minimum wage hikes have started a debate among left-leaning lawmakers and economic observers about just how high the federal pay floor should be set.
It is a way to signal that, while it may be difficult to get it through in Congress now, it is worth a try because there are people in Congress that believe this is a righteous and just cause. Worker productivity jumped by more than 52 percent in the last 20 years and workers’ inflation-adjusted hourly earnings increased by only about 17 percent over the same period.
Meanwhile, the divide between the highest and lowest ends of the income spectrum appears to be growing. The median net worth for all American families ticked up to $81,000 from $77,000 over the two-decade period ending in 2013. The net worth of the country's upper-income families, those earning at least $150,000 per year, skyrocketed to $639,000 from $318,000 during the same time. Economists who back a minimum wage hike believe the low pay floor means that taxpayers wind up subsidizing businesses that pay their workers the minimum rates. That's because many of those workers are eligible for food stamps, public housing, Temporary Assistance for Needy Families (TANF) and other government assistance.
The Fast food industry could absorb a four-year move to a $15 minimum wage without having to shed jobs. Instead, employers could cover the increased payroll costs with a modest price increase, savings related to lower worker turnover, and higher sales based on both trends and more spending money for employees. Any increase needs to be somewhat gradual. If it is phased in over several years, you should get very little negative employment effect. But even some economists who are sympathetic have reservations about moving the floor to $15. At that point, the pay rate may outstrip worker productivity in fast food and retail positions based in areas where the cost of living is relatively low. Economically, if it is raised to $15 quickly, what is left is a lot of workers who don't generate $15 an hour in revenues and so it's unjustified.
Several labor economists also cited one economic indicator as a particular reason for hesitation. The ratio of minimum-to-median wage, which varies depending on region, is often used as a barometer of a state or city's ability to absorb a minimum wage hike without negative employment consequences. Based on the current federal level of $7.25, today's ratio is about 36 percent, down from 55 percent in 1968, when the minimum wage had its highest value. The median is the midpoint, where half of the workers earn more than that amount and the other half, less. Therefore, those now earning the minimum wage are paid hourly wages that are 36 percent of what the typical worker earns per hour.
Depending on wage growth trends in the next few years, the $12 by 2020 proposal would move the ratio back up to 55 percent. A $15 minimum wage over that time period would bring the ratio significantly higher than that, and that's why economists have been a bit dubious when folks talk about $15. $15 would be much more attainable if middle-wage workers see their pay rise more quickly over the next few years.