Farm Bill Confrontation Looms as President Balks at Legislation

Posted on May 9, 2008 by Dennis Pfaff

Prospects for a new farm bill that, among other arguably more controversial provisions, trims the federal subsidies for some forms of ethanol, remained uncertain at week's end because of continued criticism from President Bush.

That was despite support from a variety of leading lawmakers and interest groups ranging from House Speaker Nancy Pelosi to the American Farm Bureau Federation.  Both issued statements endorsing the legislation that emerged earlier this week out of congressional negotiations and appeared headed for votes in both the House and Senate (see Pelosi statement here; Farm Bureau statement here).

Sen. Tom Harkin, the Iowa Democrat who chairs the Senate Agriculture Committee and the House-Senate conference panel that came up with the compromise bill, announced the agreement on a bill Thursday (access statement here). 

According to news reports, the bill includes provisions calling on the federal government to buy surplus sugar and sell it to ethanol producers, where it would be used in a mixture with corn. It also would cut a 51-cent-per-gallon ethanol tax credit that supports blending fuel with the corn-based additive to 45 cents. It would favor putting additional money into cellulosic ethanol, which is made from material such as grasses and woody plants (see Associated Press dispatch here).

Those latter provisions were the same or similar to earlier versions of the bill (see Climate Law Update story here).


The White House ripped the legislation, releasing a statement (see text here) that called it "bad for American taxpayers," and saying the bill would increase spending by as much as $20 billion and failed to include what it called "much-needed farm program reforms." Although much of the statement focused on subsidies to wealthier farmers at a time of record crop prices, it also singled out the sugar-to-ethanol provision for special criticism:

"The farm bill not only fails to reform the sugar program but actually increases government intervention to drive up sugar prices. This law would support sugar at nearly double the world market price and control supplies to assure that domestic growers meet 85 percent of domestic consumption. Any excess supply, which could be available for food production, would be owned by the government only to be auctioned to ethanol facilities at a huge loss."

In her statement praising the legislation, Pelosi also cited some of the bill's aspects related to fuels production:


"To help transition biofuels from corn, the farm bill reduces the current tax credit for corn-based ethanol and creates a new tax credit to promote the production of cellulosic biofuels."


What happens next is not certain, although Pelosi's hometown newspaper, the San Francisco Chronicle reported that Bush's opposition "sets up an effort" by Democrat Pelosi and congressional Republicans to override the president's likely veto (see story here). The Chicago Tribune reported that lawmakers planned to take up the bill next week and send it to the president's desk (see story here), and the Washington Post agreed that  a vote could be held next week (see story here). 

(White House photo)
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In Other News (April 30)

Posted on April 30, 2008 by Dennis Pfaff
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Farm Bill Faces Uncertainty, Would Cut Ethanol Subsidies

Posted on April 29, 2008 by Dennis Pfaff

A compromise farm bill that reportedly includes some sharp reductions in subsidies for some forms of ethanol underwent heavy criticism Tuesday from President Bush. At a news conference, he called the overall multi-billion-dollar measure a “massive, bloated” bill that would do little to solve the problem of rising food prices (see White House transcript here).

That cast uncertainty on the legislation, which emerged with some fanfare late last week from behind-the-scenes negotiations between key lawmakers. Among the notable features in the bill, according to news reports (see Reuters story here), was a 6-cent-per-gallon cut in federal tax credits for ethanol. That would take the incentive down from 51 cents to 45 cents. However, Reuters reported the bill would also create a $1.01-a-gallon subsidy for ethanol distilled from cellulose, found in grasses, woody plants and crop residue.

Last week, the bill, which also contains incentives for public nutrition programs, took life with a boost from Senate Agriculture Committee Chairman Tom Harkin, D-Iowa. He said the compromise legislation, among other things, "invests heavily in renewable energy and will help bring the promise of cellulosic biofuels to reality by providing grants and loans to move from corn ethanol to other renewable feedstocks." Access the full text of Harkin's statement here.

 

  

  

Bush, however, on Tuesday ripped the bill for not doing enough to cut subsidies for wealthy farmers:

"The bill Congress is now considering would fail to eliminate subsidy payments to multi-millionaire farmers. America's farm economy is thriving, the value of farmland is skyrocketing, and this is the right time to reform our nation's farm policies by reducing unnecessary subsidies. It's not the time to ask American families who are already paying more in the check-out line to pay more in subsidies for wealthy farmers. Congress can reform our farm programs, and should, by passing a fiscally responsible bill that treats our farmers fairly, and does not impose new burdens on American taxpayers." 

Whether Bush's remarks were enough to derail the bill was a matter of some debate. Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation told Bloomberg she believed the chances of a presidential veto were about 30 percent (see story here).    

Meanwhile, some critics of subsidies for corn-based ethanol weren't persuaded by the bill's cut in subsidies.

"I guess you could say [it] is a step in the right direction but it certainly does not go far enough," Scott Openshaw, communications director for the Grocery Manufacturers Association, told Climate Law Update Tuesday.  The trade group represents the food, beverage and consumer products industries and has pushed for an elimination of corn-to-ethanol subsidies, believing they contribute to higher commodity prices.

"We kind of feel like it's bad to take your lunch and put it in your car," Openshaw said. However, he praised the legislation's support for cellulosic ethanol, which is made from non-food plant material.

A spokesman for the Renewable Fuels Association, representing the ethanol industry, could not be reached for comment Tuesday. The organization has vocally defended ethanol, including that made from corn, from charges it is contributing to skyrocketing food prices and other global ills(see recent RFA background statement here; see Climate Law Update story here).

(White House photo: President Bush at April 29 news conference)
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Bush Weighs in on Greenhouse Gas Reductions, Critics Rip Effort

Posted on April 16, 2008 by Dennis Pfaff

President Bush Wednesday set a goal of halting the increase in the nation’s greenhouse gas emissions by 2025, a significantly less ambitious objective than that established by some of the states, including California.

But in a speech in the White House Rose Garden, Bush also opened the door to a binding international agreement on cutting emissions.

In his speech, the president warned against raising taxes or imposing mandates or demands for “sudden and drastic emissions cuts that have no chance of being realized and every chance of hurting our economy.” He also argued in favor of promoting “emission-free nuclear power” and encouraging investments needed to produce electricity from coal without releasing carbon (see full text of statement here; see White House fact sheet here).

Bush called the new goal to stop the growth of U.S. greenhouse emissions by 2025 “a major step forward in America’s efforts to address climate change.” Yet he outlined few specific steps, beyond some already taken such as requiring better automobile fuel efficiency, to achieve the target. Among his goals, he said, was to create a new incentive to make the development, commercialization and use of new lower-emission technologies more competitive.

By contrast, California’s anti-global warming law, AB 32, requires the state to roll back its emissions of heat-trapping gases to 1990 levels by 2020, an estimated 25 percent reduction. Even further cuts would be required later under an order issued by Gov. Arnold Schwarzenegger (see text here). Additionally, all three major presidential candidates have endorsed emissions limits and trading programs.

Bush also expressed concern over efforts to employ existing laws, such as the Endangered Species Act and the Clean Air Act to tackle the problem. Environmentalists have been trying to prod action with the species law (see Climate Law Update stories here and here). California, and by extension other states, want to use the air law to control climate-changing emissions from cars but they have been thwarted by Bush administration officials (see Climate Law Update story here). In addition, the U.S. Supreme Court has required the U.S. Environmental Protection Agency to consider whether to regulate greenhouse gases as air pollutants under the law (see Climate Law Update stories here and here).

Bush, in his speech Wednesday, predicted the application of those laws could have widespread intrusive effects, forcing the federal government to "act like a local planning and zoning board, [having] crippling effects on our entire economy." 

The president, who has opposed such international treaties as the Kyoto Protocol, said that "all major economies" must take action to make a dent in the problem. He then suggested the United States would be willing to enter a new pact:

"Like many other countries, America's national plan will be a comprehensive blend of market incentives and regulations to reduce emissions by encouraging clean and efficient energy technologies. We're willing to include this plan in a binding international agreement, so long as our fellow major economies are prepared to include their plans in such an agreement."   

Congressional critics of Bush also quickly ripped the president’s stance. U.S. Sen. Barbara Boxer, the California Democrat who chairs the Senate Committee on Environment and Public Works, issued a statement (see text here) saying Bush’s “plan to have America stand by while greenhouse gases reach dangerous levels and threaten America and the world is worse than doing nothing – it is the height of irresponsibility.” Although greenhouse gas emissions have shown some decreases lately in the United States (see Climate Law Update story here), officials estimate they have grown nearly 15 percent since 1990 (access latest inventory here).   

Others, meanwhile, reacted more cautiously. Sens. Joseph Lieberman, I-Conn., co-sponsor of legislation that would limit greenhouse emissions and set up a trading program to help control them, said he shared the president’s preference for a market-based approach over the imposition of new carbon taxes. Lieberman said he did not believe Bush’s statement would hamper the chances of the bill he and Sen. John Warner, R-Va., are sponsoring. The measure is expected to come before the Senate in June (see text of legislation here), .

Warner, in the same statement, said the president’s support for “measures to reduce greenhouse gas emissions in the U.S. is welcome news as the Senate prepares to consider climate change legislation this summer.” Warner also praised Bush's call for an international approach to the issue (see full text of statement here).

(Photo credit: White House)
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House Passes Renewable Energy Tax Credit Bill, Future Uncertain

Posted on February 28, 2008 by Dennis Pfaff

The U.S. House of Representatives Wednesday (Feb. 27) approved a bill that would extend tax credits for renewable energy projects while reducing breaks for petroleum production. Under the measure, the tax credit for production of electricity from renewable resources would be extended through 2011 and a credit for solar energy and fuel cell projects through 2016.

However, according to news reports, the bill faced an uncertain future in the Senate and even if if passed there President Bush has threatened to veto it because of the increased burden it would place on oil companies.

Environmental groups, however, praised the action, particularly lauding the bill's extension of credits for several years. The Natural Resources Defense Council, in a statement following the House action, said it could help end the roller-coaster fortunes of the renewable energy industry:

"Extensions in HR 5351 for energy efficiency and renewable energy technologies are for multiple years, which is essential to developing the clean energy technology industry long term. While Congress historically extends clean energy incentives in two-year increments, many pieces within the bill are valid for up to eight years in some cases, reducing the impact of a boom-bust cycle for the technologies."

(Pictured: Solar plant near Barstow, California; DOE photo)

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