Washington Report
Washington Report Headlines Congressional News · USDA Aiming for More Effective Oversight · President’s FY 15 Agriculture Budget Request Federal Employee News · More Jobs Added Than Projected in Feb News from the Halls of Congress USDA Aiming for More Effective Oversight The U.S. Department of Agriculture's Office of Inspector General is using an increase in funding provided in fiscal year 2014 to provide more effective oversight of USDA programs, and a proposed modest increase in funding for FY 2015 will allow the office to continue that trend. The USDA's budget request seeks $97 million in funding, up from $90 million in FY 2014. The OIG plans to focus its resources on programs including fraud and abuse within the Supplemental Nutrition Assistance Program (SNAP) and crop insurance administration, as well as improving the use of information technology. SNAP, with an $86 billion budget last year, accounts for 56 percent of the USDA's portfolio, and the OIG devoted more than half of its investigative resources to the program. Efforts included recommendations for USDA to improve screening of retailers participating in SNAP, as well as an initiative to address SNAP fraud on a multi-agency level with state and local authorities. Budget constraints are resulting in tough choices for program managers as they seek to deliver benefits to those who need them. Over the past eight years, the department has averaged a $12 return for every $1 invested in the OIG's operations. In all, the USDA has requested $23.7 billion in discretionary spending for fiscal 2015, $938 million less than the department's FY 2014 enacted levels. President’s FY15 Agriculture Budget Request President Barack Obama requested a $22.2 billion discretionary budget for the Department of Agriculture, about $1.9 billion less than the fiscal 2014 enacted amount of $24.1 billion. The president's request would also provide $1 billion for emergency wildfire suppression and $295 million from his new Opportunity, Growth and Security Initiative. More than 80 percent of the Agriculture Department's funding comes from mandatory spending for programs such as nutrition assistance, commodity support and crop insurance. Funding for mandatory programs in fiscal 2015 is estimated at $123 billion, an $11 billion decrease from fiscal 2014. Major Themes » Farm bill: The five-year farm bill reauthorization (Public Law 113-79) enacted changes to major farm support programs, leaving the president's budget proposal to highlight other programs such as wildfire suppression, agricultural research and rural renewable energy. However, the budget request proposes a substantial decrease in direct spending--about $14 billion over 10 years--for the federal crop insurance program by reducing subsidies to farmers and insurance companies to help finance an additional $56 billion in spending for the Opportunity, Growth and Security Initiative. The farm bill, by contrast, expanded the crop insurance program by $5.7 billion over 10 years. » Nutrition: A $4.6 billion decrease in mandatory spending on the Supplemental Nutrition Assistance Program, also known as food stamps, is largely consistent with eligibility changes enacted in the farm bill that reduced spending on the program. The proposal seeks $6.8 billion, $100 million more than provided this year, for the Women, Infants and Children nutrition program, which is the department's largest discretionary program. The request also supports changing the types of food eligible under WIC to focus on nutritious foods, which could affect producers, processors and grocers. » More money: The president's request would exceed the discretionary budget caps for agriculture spending through the Opportunity, Growth and Security Initiative and by increasing caps for emergency fire activity. The former program would provide $295 million to support in-house research, competitive land-grant programs and a new biosafety research lab. The latter asks for an increased reserve fund to address firefighting in emergency situations. » Food aid: The fiscal 2015 budget proposes less extensive changes to food aid than the fiscal 2014 request, which focused on local procurement instead of shipping U.S. products overseas, and moving funding to the U.S. Agency for International Development, which administers the program. USDA could instead spend as much as 25 percent of the budget authority for Food for Peace, the largest of the food aid programs, for local procurement during emergencies. » User fees: $52 million in revenue over 10 years from new user fees for three inspection agencies will be submitted as new legislative proposals: the Animal and Plant Health Inspection Service, the Food Safety and Inspection Service, and the Grain Inspection, Packers and Stockyards Administration. Federal Employee News More Jobs Added Than Projected in Feb Employers added more workers than projected in February, indicating the U.S. economy is starting to shake off the effects of the severe winter weather that slowed growth at the start of 2014. The 175,000 gain in employment followed a 129,000 increase the prior month that was bigger than initially estimated, Labor Department figures showed today in Washington. The jobless rate rose to 6.7 percent from 6.6 percent as the number of people joining the workforce swamped the quantity of jobs available. The pickup following the weakest two-month hiring gain in more than a year shows employers remain confident the economic expansion will recover after winter storms slowed consumer spending. Yields on Treasury securities jumped as the report probably also means Federal Reserve policy makers will continue to trim monthly bond purchases aimed at spurring growth. The weather was less of a detriment overseas. German industrial output rose in January for a third consecutive month as mild temperatures boosted construction activity, another report today showed. While the increase in the jobless rate put the figure further away from the Fed’s threshold of 6.5 percent for raising interest rates, the central bank still faces a challenge in communicating its intentions to investors. Labor-market improvement is one reason why policy makers have dialed back monthly bond buying by $10 billion at each of their past two meetings. Hiring at professional and business services increased by the most in a year, while payrolls rebounded in education and health services. State and local government agencies, factories and construction firms also added to headcounts last month. The bad weather probably had the biggest impact on the length of the workweek last month. The number of hours worked by all employees dropped to 34.2 on average in February, the least since January 2011. The Labor Department’s survey of households, from which the unemployment rate is calculated, showed almost 6.9 million people worked less than a full week, the most for any February since record-keeping began in 1978. 601,000 Americans weren’t at work because of weather during the survey week, the most for the month since 2010. Bad weather can affect the payroll count if employees didn’t receive compensation for the entire pay period that included the 12th of month. The week ended Feb. 15 was the coldest second week of February since 2011. The South Atlantic region of the U.S. experienced the most snowfall since 1983 and New England registered the most in 20 years during the period. February’s winter blitz followed the chilliest January in three years. Wages were another bright spot in today’s report. Hourly earnings for all workers climbed by 9 cents, or 0.4 percent, on average to $24.31 last month, marking the biggest gain since June. Average weekly pay increased to $831.40 from $830.75.
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Washington Report prepared by McAllister & Quinn Washington Report Headlines Congressional News · Camp Unveils Tax Plan · $3 Million from USDA to Protect Honey Bees Federal Employee News · Obama Reworks Fed Cuts in FY2015 Budget News from the Halls of Congress Camp Unveils Tax Plan The top Republican tax-writer in Congress proposed restructuring the U.S. tax code to eliminate dozens of breaks to pay for reductions in the corporate and individual rates. The 979-page plan from Representative Dave Camp would mark the most significant changes to the U.S. tax system since 1986, affecting every part of the economy and reflecting politically unpopular tradeoffs that sparked immediate complaints from business groups. Though it’s unlikely to become law this year, Camp’s plan is a blueprint that lawmakers may use in the future and its ideas and details will shape U.S. tax policy going forward. The proposal includes new limits on breaks for health insurance, retirement savings, mortgage interest and private equity managers’ carried interest. The plan would repeal breaks for student loan interest, moving expenses, accelerated depreciation, and state and local taxes. Corporations would have a top rate of 25 percent, down from 35 percent. Individuals would have a top rate of 25 percent on their taxable income, down from 39.6 percent. The actual marginal rate for top earners would be higher. They would be subject to 10 percent surtax on a broader base that includes municipal bond interest and employer-provided health insurance. That would apply to married couples earning about $450,000 in 2013 or individuals making $400,000. Top earners also would lose certain benefits, such as the 10 percent bracket, as their income goes up. Camp’s goal is to reshuffle the tax burden while generating the same amount of revenue for the government -- and doing so without reducing the burden for top earners. He proposed a 3.5 basis-point quarterly tax on assets of the biggest banks and insurers, and limits on the deductibility of entertainment, advertising and research expenses. He proposed repealing the last-in, first-out accounting method using by many oil companies and wholesalers. Some breaks, such as the tax exemption for credit union income, were untouched. U.S. multinational companies would have lighter taxes on their future profits earned outside the country. Under the plan, they would pay a one-time tax on assets they’ve accumulated outside the U.S. under the current system, with the proceeds dedicated to the Highway Trust Fund. For individuals, Camp would increase the standard deduction, repeal the personal exemption and expand the child credit. He would also reduce the size of a mortgage eligible for the mortgage interest deduction to $500,000 from $1 million. Those changes would reduce the percentages who itemize deductions to 5 percent from about 30 percent now. Camp would create a new system for taxing capital gains and dividends -- a 40 percent exclusion. When applied to the top 35 percent rate, that would mean a 21 percent basic tax on long-term capital gains and dividends, which would be added to the 3.8 percent investment income tax that Camp would retain. The plan would push people into Roth-style retirement plans that rely on after-tax money instead of tax-deferred accounts. New contributions to standard individual retirement accounts would end. Private equity managers and others who received profits income as carried interest would pay $3.1 billion more over the next decade, with a portion of income that is now considered capital gains becoming ordinary income with higher rates. The plan excludes real estate professionals. $3 Million from USDA to Protect Honey Bees The U.S. Department of Agriculture (USDA) announced last week the availability of $3 million to protect vulnerable pollinators through the Environmental Quality Incentives Program (EQIP). These targeted funds will support conservation practices that both foster environmental benefits and provide habitat and forage for pollinating species. Farmer applications for this special EQIP initiative are due March 21, 2014. The funds will be available to farmers and ranchers located in the Midwest states of Michigan, Minnesota, North Dakota, South Dakota and Wisconsin for both technical and financial assistance to improve the health of honey bees, one of our most critical pollinators. The Midwest was chosen because it serves as the summer resting ground for roughly 65 percent of the commercially raised honey bees in the U.S. Honey bees are solely responsible for pollinating many of the fruits and vegetables that are mainstays in the American food supply and, according to USDA, collectively support approximately $15 billion worth of agricultural production. Though not referenced in the USDA EQIP announcement, the Conservation Stewardship Program (CSP) already provides financial and technical assistance on a nationwide basis — including but not limited to the five newly targeted EQIP states — for farmers and ranchers whose operations benefit pollinators. The CSP rewards farmers specifically for conservation activities that establish pollinator habitat as part of field borders, vegetative barriers, contour buffer strips, grassed waterways, shelterbelts, hedgerows, windbreaks, conservation cover, and riparian forest and herbaceous buffers. The special CSP pollinator habitat enhancement is available on all types of agricultural land – cropland, pastureland, rangeland, and forestland. In addition to the specific CSP enhancement option for pollinator habitat, other CSP enhancement options that would aid pollinators while also improving soil health and creating additional environmental benefits include intensive cover cropping, grazing management to improve habitat, extending the size of field borders and conservation buffers, native prairie restoration, multispecies native perennial plantings, hedgerow restoration, and advanced integrated pest management. Through renewable, five-year contracts, CSP enrolls producers that demonstrate advanced conservation across their operations. Farmers and ranchers agree to maintain existing and adopt new conservation practices that address priority resource concerns, and they receive annual payments for the environmental benefits they produce. By packaging a variety of enhancements, farmers and ranchers can maximize conservation benefits and deal with issues like pollinator health in a comprehensive and long-term manner. Federal Employee News Obama Reworks Fed Cuts in FY2015 Budget President Obama removed many of the cuts previously aimed at federal employees in his fiscal 2015 budget, instead promising to “unlock the full potential” of the government workforce. Obama struck a conciliatory tone in the blueprint when referring to federal workers that has been present in the rhetoric of past budgets, but mostly not backed up with substance. The White House on Tuesday announced a new initiative, and corresponding funding, to boost federal employee training and retention. The budget invests in the government’s most important resource, its workers, ensuring that we can attract and retain the best talent in the federal workforce and foster a culture of excellence. The proposal would fund the Office of Personnel Management to build a stronger onboarding program for new members of the Senior Executive Service, as well as leadership and engagement training for new managers to address the changing needs of a 21st century workforce. Obama promised his administration will work with labor groups to recruit and retain individuals with high-demand talents and skills, and will begin demonstration projects in 2015 to identify best practices in hiring, increasing diversity and reducing skill gaps. In his fiscal 2014 budget, Obama proposed federal employees contribute an additional 1.2 percent of their pay toward their retirement pensions. He also suggested switching to a new formula to calculate inflation, which would result in lower cost-of-living adjustments for federal retirees and Social Security beneficiaries. Both of those measures were eliminated from the current budget, in part due to the recent budget agreement putting in place a pension contribution hike for new employees. Obama has said the so-called “chained-Consumer Price Index” is still on the table, but the gridlock between congressional Republicans and the White House on deficit reduction has prompted him to proposal from his fiscal 2015 budget. Obama will not formally introduce his 1 percent pay raise proposal for civilian employees until next week. The budget was not all good news for federal employees; several agencies would face right-sizing under the president’s proposals. The intelligence community would face workforce reductions; the Environmental Protection Agency would modernize its workforce, resulting in job consolidations; the State Department would look to reduce the number of feds overseas at all agencies; the Transportation Security Administration would save $100 million in 2015 through staffing efficiencies; and, as previously announced, the Defense Department will reduce its headquarters funding by 20 percent. Overall, the Obama budget proposed 136 cuts, consolidations and savings opportunities, which would save $17 billion. Obama recommended a series of changes to the Federal Employees Compensation Act that would generate $340 million in savings over 10 years. The proposal -- which is nearly identical to language included in a Senate bill to overhaul the U.S. Postal Service -- would reduce benefits to retirement-age employees receiving workers’ compensation, establish an up-front waiting period before those injured on the job begin receiving payments, and attempt to reduce improper payments. Obama also included the cuts in his fiscal 2014 budget. The President also retained provisions to reform the Federal Employees Health Benefits Program. The administration wants to give OPM the power to contract with modern types of health plans rather than being limited to the current four statutorily-defined plans reflective of the 1950s insurance market. It would also give OPM the authority to negotiate pharmacy benefits for all FEHBP program participants. Currently, health plans participating in FEHBP contract with pharmacy benefits managers, who negotiate with drug manufacturers and pharmacies on behalf of their enrollees. OPM has said that working directly with a single pharmacy benefits manager would reduce costs to beneficiaries. Overall, the administration estimated the changes would save $2 billion over 10 years. Washington Report prepared by McAllister & Quinn LLC
Washington Report Headlines Congressional News · Farm Bill Passes House, Set for the Senate Federal Employee News
Farm Bill Passes House, Set for the Senate The U.S. House passed and sent the Senate a much-delayed bill to set agricultural policy for five years, as a coalition of rural Republicans and urban Democrats overcame objections about farm subsidies and food-stamp cuts. The Republican-led House voted 251-166 for the farm bill, which would cost $956.4 billion over a decade. Senators predicted passage in their chamber. The plan, which the Congressional Budget Office estimates will cut spending by $16.6 billion over 10 years from current levels, reflects the clout of rural and urban allies who kept farm subsidies and nutrition programs together. Supporters said the bipartisan bill showed differences can be bridged. President Barack Obama was pleased by progress on the bill and would sign into law the version passed by the House. The legislation governing U.S. Department of Agriculture programs emerged after more than two years of debate, with some lawmakers seeking to use the measure to curb spending and end subsidy programs. Senate Majority Leader Harry Reid yesterday predicted the plan, a compromise between competing versions passed by the two chambers, will pass the Senate, which could take up the measure as soon as this week. The bill governs farm subsidies, which encourages planting of soybeans, cotton and other crops by lowering costs for commodity processors including Bunge Ltd. The legislation would cut food-stamp spending by $8.6 billion over 10 years, though additions to other programs bring nutrition-aid cuts down to $8 billion -- one-fifth of the $40 billion sought by Republicans and fought by Democrats and food retailers. The annual reduction would equal about 1 percent of the program’s total spending of a record $79.6 billion in the year that ended Sept. 30. Total savings would be $23 billion over 10 years after automatic cuts in all federal spending tied to an earlier budget deal are included. The conference report eliminated the 15-year term limit on guaranteed loans and the accompanying graduation requirements, and exempt micro loans from direct term limits. Crop-growers facing loss of $50 billion in subsidies retained about two-thirds of it through other aid. Conservation initiatives would lose $6 billion, largely through consolidation of existing programs. Crop insurers that paid out $17 billion after the severe 2012 were largely unscathed. The bill ends the possibility, for at least five years, of U.S. farm policies reverting to a 1949 law that would potentially double milk prices. The House and Senate conference committee have posted the Farm Bill agreement worked out over the weekend; the text is available at http://www.ag.senate.gov/issues/farm-bill and other sites. The House is expected to vote on this Bill on Wednesday and it is expected to pass by a small margin. The Senate may vote as early as late this week or early next week, and it is projected to pass. It is anticipated that the President will sign it into law. As we know from experience, this is what is EXPECTED, but we will know soon enough the fate of this agreement.
Some of the highlights of the Credit Title are as follows: 1) Elimination of guaranteed loan term limits; 2) “median” reverts back to “average” acreage in the beginning farmer ownership limitations; 3) Embedded entities, definitional changes got fixed; 4) Micro loans are exempt from direct term limits; 5) Requirement for an annual report on the impact of term limits on direct operating loans. This is bigger than it first appears and we hope that objective evidence from the report will lead to eventual removal of term limits More information will follow as we study the details and the bill moves closer to passage. The NACS legislative committee felt it was important to communicate this information to our members. John Gehrke NACS Legislative Committee McAllister & Quinn Washington Report Washington Report Headlines Congressional News · Omnibus Bill Headed to the White House for Signature · USDA Appropriations for FY2014 · Farm Bill Gaining Momentum Federal Employee News
Omnibus Bill Headed to the White House for Signature The omnibus spending package providing $1.012 trillion in discretionary federal funds is headed to President Barack Obama's desk for signature after being passed by the Senate. The 12-bill package (H.R. 3547) is expected to be signed by the president and be law before a short stopgap government funding bill expires Jan. 18, thereby heading off any threat of another government shutdown. Obama's signature would bring to a late close the fiscal year 2014 appropriations process, which was dominated by the threat of deep sequester cuts and government shutdowns. It clears the way for appropriators to now begin work on the 2015 spending bills next month. The Senate passed the huge appropriations package on a vote of 72-26 after a day's debate, where lawmakers of both parties lined up to praise the deal negotiated during the past month by Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) and House Appropriations Committee Chairman Hal Rogers (R-Ky.). While the 1,500-page spending bill was unveiled only a few days earlier, Senate critics of the appropriations process kept their comments to a minimum amid urgings from leaders of both parties to expedite passage of the measure. The Senate vote was almost as lopsided as the 359-67 House vote the previous day, with lawmakers of both parties backing the bipartisan spending plan. As in the House the previous day, the Senate vote reflected lawmakers' strong desire to avoid any risk of a replay of October's government shutdown. On final passage, all 55 Democrats and 17 Republicans voted in favor of the measure. Another 26 Republicans opposed the bill and two did not vote. The vote on final passage was preceded by a similar 72-26 vote on a motion to invoke cloture and thereby head off any filibuster threat against the bill. The block of Republicans who supported the omnibus was bigger than the usual group of appropriators who typically back their committee's work product. But as expected the most conservative members of the Republican caucus withheld their support. The bill on its way to Obama's desk reflects the plan Mikulski and Rogers preconferenced during the month since Congress passed the bipartisan budget agreement (H.J. Res. 59). Besides allocating the budget deal's $1.012 trillion allocation among the 12 regular appropriations bills, the omnibus updates policy directives for departments and agencies. In addition to that, the bill provides $91.9 billion for overseas war costs, $5.6 billion for disaster relief, and $925 million for other initiatives not covered by the discretionary cap. An additional $749.4 billion in mandatory spending brings the price tag of the bill to almost $1.9 trillion. Appropriators of both parties said they were extremely pleased that negotiators managed to finalize all 12 bills and avoid having to provide straight-line continuing resolutions for any of the programs under their jurisdiction. USDA Appropriations for FY2014 Farm, nutrition and food programs would receive about $145.7 billion in total spending under the Agriculture-FDA portion of the $1.1 trillion omnibus spending agreement for fiscal 2014. The agreement would provide about $3.5 billion more in total spending for the programs than the president requested. The measure would provide $20.9 billion in fiscal 2014 discretionary funding, which would be $350 million more than the fiscal 2013 enacted level. The agreement would provide $29.9 billion for agricultural programs in fiscal 2014, $138 million less than requested. The funding includes $6.8 billion in discretionary money. The Farm Service Agency, which oversees farm assistance programs, would receive $1.6 billion, about $5 million more than the administration’s request. The measure also would authorize $5.5 billion in loans under the Agricultural Credit Insurance Fund Program Account for programs such as farm ownership, farm operating, conservation and emergency loans. The measure would provide “such sums as necessary” for the Federal Crop Insurance Corporation Fund and Commodity Credit Corporation two mandatory accounts. The Appropriations Committees estimate that the Federal Crop Insurance Fund would receive about $9.5 billion in direct spending. In addition to insuring farmers against crop losses, the fund subsidizes insurance companies that provide crop coverage, such as Wells Fargo & Co., ACE Ltd and QBE Insurance Group Ltd. The Commodity Credit Corporation, which funds mandatory programs that support farm income and prices, would receive $12.5 billion to reimburse losses related to farm commodity support. Agricultural research programs would receive $2.6 billion and rural development programs would receive $2.4 billion, of which $1.1 billion would go to the Agriculture Department’s Rental Assistance Program. The agreement would also authorize $35.9 billion in loans for programs such as the Rural Housing Insurance Fund, Rural Business-Cooperative Service and electrification and telecommunications loans. The Food Safety and Inspection Service would receive $1 billion, about $2 million more than the administration’s request. A policy provision in the bill would prohibit the Grain Inspection, Packers and Stockyards Administration (GIPSA) from implementing or further establishing rules related to livestock and poultry industry compliance, which industries said have overreached beyond the law’s intent. Domestic food programs would receive $108.6 billion under the agreement, including $6.8 billion in discretionary spending. Domestic food programs make up the largest appropriation under Agriculture-FDA programs. The measure would provide $82.2 billion in direct spending for the Supplemental Nutrition Assistance Program, formerly called food stamps, which is about $3.8 billion more than the administration’s request. Funding levels for SNAP are being debated under the farm bill, which sets multiyear authorizations of farm policy. The program is funded through the appropriations process even though it is considered mandatory spending. Child nutrition programs would receive $19.3 billion in direct spending, of which $5.6 billion would go toward school lunch programs. The Supplemental Nutrition Program for Women, Infants and Children (WIC) would receive $6.7 billion in discretionary spending. The agreement would also require oversight and monitoring of the program, such as directing the USDA to help rein in food costs through oversight of vendors. The agreement would provide a total of $4.4 billion in budgetary resources to the Food and Drug Administration. It would include $2.6 billion in discretionary funds, $3 million more than requested, and allow the agency to spend $1.8 billion in user fees collected from industries. The measure also would make available to the FDA some user fees that were deposited in fiscal 2013 but withheld from agency’s use because of sequestration. That would provide an additional $85 million to the agency. All authorized user fee programs are included in the agreement, which doesn’t provide collection authority for new proposed user fees, such as for food import or cosmetic activities. The Commodity Futures Trading Commission would receive $215 million for fiscal 2014, $100 million less than requested. The agency, which regulates commodity futures and options markets, is involved in the implementation of the Dodd-Frank financial regulatory overhaul. To accommodate a difference in House and Senate subcommittee jurisdictions, the CFTC is funded under Agriculture-FDA appropriations measures in even-numbered years and Financial Services appropriations measures in odd-numbered years. The agreement would provide $1.5 billion for Food for Peace grants to private organizations to provide food assistance abroad. The administration had requested moving the jurisdiction of the program to the U.S. Agency for International Development, which wasn’t included. The agreement wouldn’t require a study on the administration’s proposed food aid reforms, such as focusing on local procurement instead of shipping U.S. products overseas, which was sought in the House bill. The Animal and Plant Health Inspection Service would receive $824.9 million under the measure, about $24 million more than requested. The measure would also provide an additional $20 million for fiscal 2014 to combat a citrus plant disease called citrus greening. The agreement would prohibit using federal money for horse meat inspection, which would effectively prevent horses from being slaughtered for human consumption. Funding for this purpose hasn’t been allowed since 2007. Farm Bill Gaining Momentum Negotiations in Congress on the long overdue U.S. farm bill could be completed this week after progress was stalled by a disagreement over a dairy price support program, a senator said on Wednesday. The five-year farm bill, which covers issues from domestic crop subsidies to exports and global food aid, is being held up chiefly by a dispute between Republican House Speaker John Boehner and Democratic Representative Collin Peterson of Minnesota over a program that would cut milk production if prices decline below a certain level. The dairy issue appears to be the last major hurdle to a deal on the farm bill. Peterson, top Democrat on the House Agriculture Committee and one of the top four negotiators on the farm bill, has championed the Dairy Security Act, a new program that offers producers profit-margin insurance as long as they agree to cut milk output if prices fall below a set level. Lawmakers are more than a year late in replacing the 2008 farm law, which expired in the autumn of 2012 but was extended until September 30, 2013. If no bill is passed, the Agriculture Department may be forced to peg dairy subsidies to an underlying "permanent" 1949 law that would double the price of milk in grocery stores - an event often referred to as the dairy cliff. Negotiators have reportedly agreed to about $8 billion in cuts over 10 years to the food stamp program, formally known as the Supplemental Nutrition Assistance Program, which gives about 47 million low-income Americans money to pay for food. In its version of the farm bill passed in June, the Democratic-run Senate offered $4.5 billion in cuts to food stamps over 10 years The House proposed $39 billion in cuts. Federal Employee News 1% Pay Raise for Blue Collar Feds in Spending Bill Congressional negotiators have agreed on a $1.1 trillion spending package that would avert a new government shutdown, set federal agency funding levels for fiscal 2014 and give a 1 percent pay raise to more than 200,000 blue-collar federal workers at military depots and other facilities. Those “wage-grade” employees were not covered by the 1 percent increase that President Obama ordered for workers paid under the General Schedule, starting this month. After a three-year freeze on federal pay scales, unions had lobbied hard to include the wage-grade workforce through legislation. For affected employees, the increase would be retroactive to the beginning of fiscal 2014 in October, or some time thereafter, depending on when their schedules adjust. The $1.1 trillion package fleshes out the budget agreement reached last month. That deal partially rolled back sequester-related budget cuts for the Defense Department and other agencies. The new bill would tweak one controversial aspect of that deal, which pared cost-of-living adjustments for working-age military retirees. Under the new measure, medically retired individuals and survivors would be exempted from the reduced adjustments. The bill also renews a long-standing provision barring the U.S. Postal Service from ending Saturday mail delivery. That step is a key priority for USPS leaders, who have said that it enjoys broad public support and would save almost $2 billion per year. NACS has continued to work with McAllister & Quinn on our legislative agenda during the last several months. What started out as optimism for a non-controversial appropriations bill and a Senate Farm Bill proposal, both very favorable to our credit programs, has turned into a roller coaster ride. Each day seems to bring new challenges for our funding and to the Farm Bill; many having nothing to do with agriculture.
Despite this, we continue to move forward knowing that in a short period of time we will have either a Farm Bill extension or a new credit title. Either way, strong support remains for rural credit. At the request of legislators, NACS and McAllister & Quinn worked with the American Bankers Association to provide the attached letter to Farm Bill conferees. We continue to look for opportunities to meet with other Ag groups and legislators to educate them on FSA's role in rural credit and we encourage each of you to do the same. John Gehrke NACS Legislative Committee Washington Report Headlines
Congressional News · Navigating a Path Out of the Shutdown · Working Group Aims to Spur Solution Federal Employee News
Navigating a Path Out of the Shutdown The way out of the political morass in Congress remains elusive as the U.S. enters the second week of a partial government shutdown and with a potential lapse in U.S. borrowing authority just 10 days away. Though Republican lawmakers and President Barack Obama say they want to end the government shutdown quickly and avoid a historic default, there’s no sign they’re talking to each other and their demands are mutually exclusive. The standoff, heightened by Obama’s refusal to negotiate on measures needed to keep the government solvent and running and House Republicans’ demand for a delay in the president’s signature health-care plan, means at least one side must make a concession or find a way to describe a concession as a victory. At least three possible routes include a resolution, based on previous deadlocks: the Senate jam, in which that chamber forces the House to accept a bipartisan compromise; the complete cave, where one party buckles under public pressure; and the fig leaf, where one side accepts a partial defeat while claiming a symbolic victory. Many parts of the government were shuttered Oct. 1 after a compromise was not reached. The shutdown has become intertwined with the need to raise the $16.7 trillion debt ceiling. The U.S. will run out of borrowing authority Oct. 17, according to the Treasury Department, and cash reserves will run dry between Oct. 22 and Oct. 31, according to the Congressional Budget Office. Because of the partial shutdown, the U.S. has furloughed about 800,000 workers while others in critical jobs worked without immediate pay. The government shuttered national parks, closed Internal Revenue Service call centers and delayed the release of unemployment data. Some U.S. services, including Social Security benefits, continue. While both parties plot their strategies behind the scenes, the possible paths to a resolution are becoming more evident -- in part because they’ve happened before. The Senate jam played out at the last fiscal deadline, the combination of expiring tax cuts and scheduled spending reductions at the end of 2012. Then, Senate Minority Leader Mitch McConnell and Vice President Joe Biden decided which taxpayers would have higher burdens and the Republican-controlled House accepted with only a minority of Republicans voting yes. Repeat that bipartisan pathway on the debt ceiling, and Boehner could be left with a debt-limit increase, none of the policy conditions he wants and the clock ticking toward a default he’s already said he won’t allow. The speaker’s big decision, as the person who controls the House floor, would be whether to allow a vote. That prospect of changing a House proposal might be the reason that Senate Majority Leader Harry Reid hasn’t started what could be a week-long process of getting a debt-limit bill without conditions ready for a final Senate vote. To advance his bill -- as opposed to ending debate on a House bill full of Republican priorities -- Reid probably would have to overcome procedural hurdles requiring 60 votes. That means he would need the support of six Republicans and might have to make policy concessions to get their votes. Even then, the strength of a bipartisan consensus in the Senate could force Boehner’s hand and cause him to accept a deal engineered by Reid. The second potential path is the complete cave, where one party yields to public pressure. That’s what both parties are trying for now as the standoff continues. Republicans say they think they can move Obama off his no-negotiations stance in two ways. First, they’re passing separate bills to fund parts of the government, trying to force Democrats to choose between programs they champion, such as national parks and infant nutrition, and the president’s insistence that the entire government be opened. Republicans have had some success in this effort, getting some House Democrats to join them in voting for the measures. Second, Republicans are pointing out flaws in the Affordable Care Act, also known as Obamacare, as they insist on changes to the law as a condition of ending the shutdown. They’ve been bolstered by the computer problems that hampered the rollout of the insurance exchanges last week. For Obama, caving would mean accepting health-law changes and engaging in the kinds of negotiations on entitlement programs he entered with Boehner in 2011 during the previous debt-ceiling fight. So far, Obama hasn’t budged, insisting that avoiding default and reopening the government aren’t concessions to him because everyone wants them. Instead, Democrats have been applying their own pressure to get Republicans to cave, particularly on ending the shutdown. Democrats also point to the at least 20 Republicans who have said they would vote for a bill to open the government without policy conditions related to the health law. One other possibility is the fig leaf, in which both parties make concessions and declare victory, even without a negotiated deal that resolves major fiscal disputes. Boehner has been trying to package the debt limit with as many party priorities as possible, including the Keystone XL pipeline, limits on environmental regulations and cuts to entitlement programs. Representative Paul Ryan, a Wisconsin Republican and his party’s 2012 vice presidential candidate, is pressing for a plan that would resolve the spending impasse and raise the debt limit while extracting entitlement program cuts and making changes to economic policies. Working Group Aims to Spur Solution House Republicans will vote on legislation Tuesday to form a new bipartisan, bicameral working group on fiscal issues comprising of 20 members. Majority Leader Eric Cantor, R-Va., briefed GOP lawmakers earlier today on the latest strategy tied to the government shutdown, now in its eighth day. If Democrats agree to go along with the committee, it could be a mechanism to ending the government shutdown and eliminating the prospect of a default, at least in the short-term. Senate Majority Leader Harry Reid, D-Nev., meanwhile, used his authority to require all senators to report to the Senate floor Tuesday afternoon to again call on the House to reopen government and lift the debt ceiling without conditions. Republicans will introduce a bill to provide pay to workers who are at their desks but not getting paid because of the shutdown. As part of the legislative push, the House will also approve the creation of a working group that is reminiscent of 2011's Joint Select Committee on Deficit Reduction, commonly known as the supercommittee. The supercommittee tried and failed to come to a bipartisan agreement for more than $1 trillion in deficit reduction over the next decade. Because they failed, automatic budget cuts known as the sequester have kicked in this year affecting both defense and non-defense spending across-the-board. The cuts will stay in place unless Congress can find agreement for a mechanism to turn them off. The new group will be different than the supercommittee because it will not have any legal authority, no date certain for a conclusion, and a gauzy framework only to discuss fiscal issues. However, the proposal is intended to create a new opportunity for Democrats to agree to negotiations. The working group would consist of 20 lawmakers evenly split between the parties including six House Republicans and four House Democrats and six Senate Democrats and four Senate Republicans. The legislation outlines three priorities for the group: to set a top-line spending number through Sept. 2014, to establish conditions for a debt ceiling increase, and to propose spending reforms for mandatory programs like Medicare, Social Security, and the Affordable Care Act. So far, President Obama and Reid have said they will not negotiate budget issues until Republicans vote to first reopen government and approve an increase in the nation's $16.7 trillion debt limit without conditions. On Tuesday, Reid reiterated his call for House Republicans to end the shutdown and raise the debt ceiling first. Federal Employee News The Debate on Back Pay For many furloughed federal employees, their Oct. 11 paychecks may be half their usual amount, and the last for a while. Many workers had already cut back after across-the-board budget reductions known as sequestration resulted in mandatory, unpaid leaves earlier this year. The Office of Management and Budget said in a statement that the two-week paychecks for many civilian employees on Oct. 11 will reflect only the work they did in the last week of September, before the shutdown. Some employees are on a different pay cycle. Unless they are paid through funding sources other than annual appropriations, their pay will only cover 9/22-9/30, whether they are excepted or not. The “excepted” workers are those whose jobs have been deemed necessary to protect life and property. The shutdown sent about 800,000 federal workers home without pay last week. The Defense Department has since recalled most of the 350,000 civilian workers it put on furlough. About 40 percent of the workers in the union are paid less than $50,000 a year. Some workers took solace in the passage of a bill in the U.S. House of Representatives Oct. 5 to reimburse employees once they return to work. If an employee receives unemployment benefits, they would have to return it if they receive their accumulated pay at the end of the shutdown. The longer the shutdown lasts, the more impact to the economy as companies lose revenue from U.S. contracts, tourists cancel reservations to hotels near closed national parks, and federal workers are forced to live on less. The Defense Department’s decision to bring back about 90 percent of the 350,000 civilian employees furloughed last week mitigates some of the shutdown’s impact. The Pentagon was able to call the workers back after Obama signed legislation to pay uniformed service members during the shutdown. The Defense Department interpreted that bill as meaning it could call back support employees, as well. The shutdown cost the economy $1.6 billion during the first week. With Defense Department employees returning to work, the impact to gross domestic product falls to about $800 million this week. Even with retroactive pay, workers probably will be more cautious with spending. The economic fallout of the shutdown has been limited so far. That could change if it extends through the end of the month. Economic activity could be reduced by as much as 1.5 percentage points in the fourth quarter. Effects could escalate as more government contract workers feel the sting and companies that do business with the U.S. lose out on orders. Before the Pentagon recalls, lost compensation would equal about $400 million a day. MESSAGE FOR NACS MEMBERS:
As you are undoubtedly aware, there has been an incredible amount of attention and scrutiny upon federal agencies and programs. Complaints and allegations of wrongdoing have simply become the cost of doing business for many federal employees. Whether true or false, and whether exacerbated by media sensation, negative public impact or political agendas, if you don't have professional liability coverage in place, the cost to defend your decisions, actions, or inactions could be cost prohibitive - even if you are ultimately vindicated. FEDS professional liability coverage is available for $280 annually for NACS members. If you are a manager or supervisor the agency will pay up to half the cost. All employees are eligible for payroll deduction – starting at just $12 per month - regardless of reimbursement eligibility. You must enter discount code: NACS13 or tell the FEDS Staff that you are a NACS member in order to be eligible for the discounted price. The FEDS policy also includes coverage for managers, at no additional cost, for employment practices liability claims such as allegations of harassment, discrimination, retaliation, whistleblower reprisal and wrongful termination. Most Umbrella policies exclude employment related acts, errors and missions. FEDS is recommended for your protection. For questions or to request brochures email [email protected]. To enroll, call 866.955.FEDS or log on to www.fedsprotection.com. Don't wait. 5 minutes now can save you thousands of dollars and will give you a whole lot of peace of mind in your work related decisions and actions. Washington Report
Congressional News · House Nutrition Bill May Complicate Farm Bill Process · September Action Planned on Energy-Efficiency Bill Federal Employee News
House Nutrition Bill May Complicate Farm Bill Process House Democrats have expressed concern that a separate nutrition bill will further complicate the process of enacting a final farm policy overhaul before Sept. 30. Republican leadership has indicated they may bring to the floor in September a nutrition bill that would cut the Supplemental Nutrition Assistance Program (SNAP) by $40 billion over 10 years and might include provisions such as work requirements for SNAP recipients. However, no such legislation has yet been introduced (149 DER A-37, 8/2/13). The House July 11 passed a farm bill (H.R. 2642) that does not include a nutrition title. An earlier version (H.R. 1947), which was defeated in the House, would have cut $20.5 billion from SNAP over 10 years. There is concern that the $40 billion SNAP cut is likely to further polarize the already contentious Farm bill debate. House Majority Leader Eric Cantor (R-Va.) said July 19 he wants a nutrition bill included with the House farm bill before going to conference with the Senate. The Senate sent a request to go to conference to negotiate final farm legislation with the House July 18. The Senate Agriculture Farm, Foods, and Jobs Act of 2013 (S. 954), approved June 10, cuts $4 billion from SNAP and does not include the work requirement. Senate Names Farm Bill Conferees The Senate leadership Aug. 1 named seven Democrats and five Republicans to serve on a conference committee to negotiate farm and nutrition policy (S. 954, H.R. 2642) with the House. Senate Democrats on the committee include: Sens. Debbie Stabenow (Mich.), chairwoman of the Senate Committee on Agriculture, Nutrition, and Forestry; Patrick Leahy (Vt.), Tom Harkin (Iowa), Max Baucus (Mont.), Sherrod Brown (Ohio), Amy Klobuchar (Minn.), and Michael Bennet (Colo.). Republican committee members include Sens. Thad Cochran (Miss.), ranking member of the agriculture committee; Pat Roberts (Kan.), Saxby Chambliss (Ga.), John Boozman (Ark.), and John Hoeven (N.D.). Energy-Efficiency Bill Action Planned for September When senators return from their summer recess, they will turn to a bill that would target the energy efficiency of residential and commercial buildings. Before leaving town, the Senate agreed by unanimous consent to proceed to the measure, S. 1392, on Sept. 10, one day after the chamber’s scheduled return from a five-week break. The bill, sponsored by New Hampshire Democrat Jeanne Shaheen and Ohio Republican Rob Portman, would rewrite national model building codes -- voluntary standards often adopted by states and municipalities -- to hit specific energy-saving targets. It also would establish education programs to train workers in energy-efficient building design and the installation of energy-efficient technologies. Rebate programs would provide incentives for the use of highly efficient motors and transformers. The federal government, the single largest consumer of energy, would have its own goals under the bill. The Energy Department would be required to issue recommendations to reduce the energy used by computers. The bill also would permit appropriated money to be used to update federal building plans to integrate the latest in energy-efficient design. Spending Offset The additional spending under the bill would be entirely offset by $350 million over four years in reductions to an existing energy-efficiency program, the senators said. That program funds efforts to develop market-ready commercial buildings that would produce as much energy as they consume by 2025. The bill was introduced on July 30 under procedures that bypassed committee referral. The Senate Energy and Natural Resources Committee approved an earlier version, S. 761, by voice vote on May 8. The new bill omits language that would have created an initiative to finance the retrofitting of some privately owned buildings. More than 250 businesses, trade associations and environmental groups have expressed support for the legislation. Federal Employee News Senate Postal Bill Adds Proposal to Reduce Fed Workers’ Comp Benefits A provision in bipartisan Senate postal reform legislation would overhaul workers’ compensation policies for all federal employees. Titled the 2013 Workers’ Compensation Reform Act, the provision -- introduced by Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla. -- would cut benefits for federal workers injured on the job once they reach retirement age. Currently, federal employees receive 66 2/3 percent of their basic salary tax-free, designed to approximately replicate their entire post-tax salary. That figure is bumped to 75 percent if the employee has dependents. Related medical expenses are also covered. The legislative committee enjoyed the San Diego convention and appreciated the time spent giving a report to those in attendance. All committee members were present and out thanks go to them for their effort. Thanks also go to Andy Quinn with McAllister & Quinn for providing a report and being available to convention attendees. We discussed some interesting ideas about where we are and where we are heading with the current Farm Bill negotiations. The legislative committee report is available in the NACS annual report on the web site at http://www.nacs-fsa.org/.
As most of you know, the House passed their version of the Farm Bill on Thursday this past week, minus the nutrition title. It is difficult to predict how this will play out when the House and Senate meet in conference. We are prepared for and continue to work with staffers regarding the credit title. The ground work has been laid but we have to see it through. I know I repeat myself, but I feel strongly that we have a great story to tell and we tell it well. When it comes to certain areas, we need to do better and try it a different way. Remember that our goal is to identify ways to better assist our customers, and then work to eliminate statutory roadblocks that prevent more efficient program delivery. We are optimistic regarding several aspects of the Senate credit title, but we are not taking anything for granted. One concern that has been a consistent priority with NACS members has been access to credit for all eligible customers. Arbitrary term limits threaten otherwise credit worthy farmers and ranchers and affects certain areas of the country harder than others… so far. This can change quickly in an economic downturn when credit tightens. We continue to get push back from the House on this subject. NACS previously sent you the following request: "The conference process is a critical time for the Farm Bill. Here is what we need from YOU: Do you have specific instances of customers being denied due to term limits? Are customers going out of business due to FSA term limits? If so, we need to know about it!!! You can contact your legislative committee directly through the new NACS web site. It is easy, it works, and we look forward to hearing from you! Note: You may email the entire legislative committee by emailing [email protected]. Thank you to Texas and Arkansas for your responses! We need to hear from more of you…very soon! John Gehrke Legislative Committee |
AuthorJohn Gehrke, FLS, Illinois Archives
October 2017
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