The Japanese government has reported its most recent case of BSE, and there is increasing concern it may be a new strain of the disease given the age of the animal infected. Officials said BSE was found in 23-month-old cow, making it the youngest animal ever to test positive for the disease, and the Japanese Health Ministry said it represents a new, "unusual" strain of the disease, adding it's modifying its screening system to ensure this new strain is discovered.

House leadership said this week it will move legislation quickly if workers strike the nation's largest railroads. House Speaker John Boehner (R, OH), keenly aware a strike could cripple freight movement, said he's confident the railroads and the three remaining unions without voluntary agreements can reach an accord "without congressional involvement." However, a resolution is ready to go should negotiations be unsuccessful. It's estimated a freight rail strike would cost the country about $2 billion per day, but would also negatively impact commuter and passenger service since many of those trains run on tracks owned by the freight carriers. President Obama created a Presidential Emergency Board November 5, to make contract recommendations for settling the dispute, starting the clock on a 30-day cooling off period during which no strike can be called nor could the railroads lock out workers. That period expires at midnight December 5. The House resolution would impose that board's recommendations on the rails and the unions should talks break down, and in the Senate there is similar legislation, including a bill to extend the cooling off period.  

The National Industrial Transportation League sent a letter to all members of Congress this week urging swift action if no accord is reached. The League's recommendation tracks the House resolution, namely asking that the Presidential Emergency Board recommendations be imposed on both labor and the companies in the event there is not contract agreement. An end to the cooling off period does not mean the unions will necessarily strike, but they are free to do so. The railroads have agreements with 10 unions, but the engineers, right-of-way maintenance and dispatchers unions have not yet signed off. Two of the unions have said they're willing to extend negotiations until February 10, 2012, but the last union remains a holdout.

It's back to square one on 2012 Farm Bill rewrites. With the failure of the Joint Select Committee on Deficit Reduction to craft bipartisan legislation to cut $1.2-1.5 trillion in federal spending over the next 10 years to meet its mandate under the Budget Control Act of 2011 (BCA), there's much speculation about what happens now to Farm Bill evolution and ag spending. The immediate impact is that $1.2 trillion in mandatory, automatic across-the-board cuts to federal spending kick in, with some programs protected, such as Medicare/Medicaid, military and private pensions, USDA's food stamp program, and department conservation programs. Some see the super committee's failure as a blessing given the House and Senate Agriculture Committees had pledged to chop $23 billion out of their spending, and under sequestration - the technical term for the across-the-board spending cuts - ag's share of the pain is now about $15-16 billion over 10 years. FDA takes a major budget hit to discretionary spending as it struggles to come up with the dollars to implement the new requirements of the Food Safety Modernization Act of 2010 (FSMA).  

According to the Congressional Budget Office (CBO), the across-the-board cuts will reduce discretionary spending by 7.8% beginning in FY2013, so expect to see spending cuts of 6-10% totaling anywhere from $150-250 million over the next 10 years. Another major impact of automatic cuts is federal personnel lay-offs, particularly in departments and agencies where personnel costs are a bigger chunk of the budget than program costs. Rep. Norm Dicks (D, WA), ranking member of the House Appropriations Committee, said the overall cuts return federal programs to below FY2008 spending levels, and this means furloughs, reductions in force and reduced hours for thousands of federal workers. Some in the GOP ranks have announced their intent to rejigger the mandatory budget cuts to protect defense spending. However, President Obama announced he'll veto any attempt to reformulate the budget cuts beyond the BCA mandate. Agriculture spending now faces the dual challenge of sustaining another 8% hit to its spending over 10 years - over $10 billion in spending reductions were taken in FY2010 and 2011 - as well as trying to reauthorize federal farm programs.  

There is a new reality: Conventional and traditional direct farm program payments are no more. Most major commodity groups have crafted new farm income "safety net" proposals predicated upon some form of hybrid federally subsidized income insurance which pay farmers for lost income due to production reductions or income drops. Complicating these scenarios are the crop and regional competition issues which plague farm program reauthorizations. Senate Agriculture Committee Chair Debbie Stabenow (D, MI) and Rep. Frank Lucas (R, OK), chair of the House Agriculture Committee, embraced a three-program approach to reworking the income safety net. The first chunk of this trifecta was a revenue protection insurance for corn, wheat and some other crops and included a "shallow loss" component under which farmers would be liable for the first 10-15% of losses, with federally subsidized insurance kicking in to cover the rest; the second part was a countercyclical payment program for rice and peanuts, and the third, was a cotton grower-only program. Many hoped that by addressing the major direct payment program rewrite as part of the super committee action this year - "Farm Bill I" - and overcoming the most contentious part of the Farm Bill process, the payment program reformulation would be accelerated and protected from budget hawks and farm policy critics on the floor. Starting the process anew means those groups which reinvented their programs will go back and reanalyze these approaches, particularly in light of other program proposals that have emerged since the deficit reduction wars began.  

Also, AFBF is expanding development of its approach - a "Systemic Risk Reduction Program" - that creates a safety net based on "large systemic risk issues" rather than relatively minor fluctuations in income or production based on "average weather and market events." Critics of the super committee process are pleased the process shifts back to the more familiar approach, and Stabenow and Lucas, in a joint statement on the future of the process, said, "We will continue the process of reauthorizing the farm bill in the coming months, and will do so with the same bipartisan spirit that has historically defined the work of our committees." Whether the new starting point is the Stabenow/Lucas $23-billion "triplet program" is highly unlikely given the first attempt at crafting the program missed the savings mark by over $8 billion and the second iteration wasn't even completed by the time the super committee threw in the towel. At the same time, abandoning this approach will mollify a number of national organizations, but its imprint can't be ignored. Both committees will follow regular order meaning they will now schedule DC and regional hearings in 2012, starting likely in late January or early February, and will take input from consumer groups, environmental organizations and the like. Stabenow said this week she'd like to be ready to markup a bill by "early spring." It will also give congressional farm program reformers a chance to bring forth their ideas of what federal farm programs should look like. It also means full floor debate in both chambers. House Speaker John Boehner (R, OH), a strong critic of farm programs going back to his days as a member of the House Agriculture Committee, will likely follow his "transparency" rule in floor consideration. This means any and all amendments would be allowed under an "open rule."

EPA Outlines New Pesticide General Permit Process -- The controversial permit requirement that farmers get both NPDES and FIFRA permits for pesticides used on or near water was outlined this week by EPA. The redundant permitting has been overturned by passage of a House bill, but the same legislation, approved by the Senate Agriculture Committee is being held up by Sen. Barbara Boxer (D, CA), chair of the Environment & Public Works Committee. In a two-hour webinar, EPA explained its role and that of the states in the permitting exercise, telling participants that operators must notify EPA within 24 hours after an "accidental discharge" and describing all remediation measures. A written report must be submitted within 30 days. The permit program went into effect October 31 in six states where EPA has authority under the Clean Water Act (CWA): Alaska, Idaho, Massachusetts, New Hampshire, New Mexico and Oklahoma. This program is being used as the model for water oversight in the other 44 states. EPA estimates the new permits will be required by about 365,000 applicators. Details can be found at www.epa.gov.

Release of Confidential Chemical Information by EPA Begins - To "enhance EPA chemicals management and increase transparency," the agency this week announced it's making publicly available hundreds of studies on chemical safety that were previously held as confidential business information. Since 2009, the agency has redefined 577 chemicals as no longer confidential and more than 1,000 safety studies are now accessible through the agency's website. In 2010, EPA issued new guidelines indicating when it would reject a company's application for confidentiality, and 35 companies have agreed to review previously confidential studies. Information is found at  www.epa.gov/oppt/existingchemicals/pubs/transparency.htm. 

Rep. Jack Kingston (R, GA), chair of the ag appropriations subcommittee, this week introduced a bill to make the H2A guest worker program "more farmer friendly and less cumbersome." The bill, he said, will make "common sense reforms...and get rid of well-intentioned but practically unworkable regulations." Kingston cited a University of Georgia study that showed $74.9 million in losses in seven crops due to labor shortages. His bill would shift a portion of H2A enforcement from the Department of Labor to USDA; expand the definition of ag worker to include dairy and ranching industries; allow farmers to attach an "experience requirement" to job postings to allow farmers to match jobs with qualified workers; remove the requirement that farmers hire domestic labor during a contract period when there is no existing need for additional workers; set a new farm wage system, with a wage minimum set at 115% of whichever is higher, the federal, state or local minimum wage; allow applications for workers 30 days in advance of need; make H2A visas good for one year and allow them to be renewed once before the worker has to return to his/her home country, and require that between renewals an employer has to retest the domestic labor market as if the worker was a first-time applicant, and shift housing requirements to a voucher system, allowing the option of using existing housing rather than requiring farmers to build permanent housing. Rep. Kathleen Hochul (D, NY) sent a letter this week to Secretary of Labor Hilda Solis urging her to "modernize" the H2A visa program so that western New York farmers can meet the deadlines for paperwork submission.

Congress is wrestling with finishing up 12 FY2012 spending bills, and is confronted with how to extend the Social Security payroll tax cut expiring at the end of the year. And while leadership on both sides of Capitol Hill continues to wrangle with how to craft an omnibus spending package, it increasingly appears the payroll tax cut bill may carry unrelated tax "fixes" as well. While both parties on both sides of the Hill agree the payroll tax cut must be extended, the GOP proposes to extend the cut and pay for the reduction in Social Security tax collection through offsets to the estimated $115-billion price tag. President Obama and Democrats want to expand the tax cut for both workers and the share paid by employers, paying for it by imposing a 3.25% surtax on income over $1 million. Senate Republicans this week offered a counter, unveiling a package that would pay for the payroll tax cut by cutting spending in other programs. In a draft GOP bill, the payroll tax cut would be extended for one year, but it would not be expanded as the President proposes.

Further, the federal pay freeze and a hiring freeze would be continued, coupled with a reduction in some Medicare benefits, unemployment insurance and food stamps. This bill, said Senate Minority Leader Mitch McConnell (R, KY), will save about $111 billion. Other tax issues that may get rolled into a payroll tax cut extension include renewing several tax credits, including several biofuel tax credits that don't include ethanol, Medicare reimbursement to doctors, research/development tax breaks, and the ever-present need to "patch" the alternative minimum tax. Meanwhile, Sen. Rob Portman (R, OH), a member of the failed super committee, said he intends to follow up that work with a bill to overhaul the tax code, and he may combine his efforts with those of Sen. Patrick Toomey (R, PA), a colleague on the super committee, who has proposed raising about $250 billion by generating new tax revenue, extending the Bush tax cuts and closing a number of tax code loopholes.