Thursday evening the budget conference committee passed out the proposed state budget setting the stage for both houses of the legislature to consider the entire budget next week.   The budget passed by the conference committee includes many of Governor Brown's proposals but significantly less cuts.  As presented, the budget includes a five year extension of the tax proposals that are scheduled to end June 30^th as well as the controversial provision, elimination of redevelopment agencies.

 

Final decisions enacted by the two-house budget conference committee set up floor votes in the Assembly and Senate for a vote to likely take place Wednesday next week.  Governor Brown has set an initial deadline of next Thursday for approval of the package that includes the still-unresolved issue of asking voters to extend 2009 tax increases to income, sales and vehicles.  The real deadline may be later in March.   

 

The real question is: "Are there votes to pass the budget?"  Most attention and scrutiny is on the Republicans.  Enactment of Proposition 25 last November makes the budget a majority vote of the members, however placing the tax extension on a special election ballot requires a super majority vote of the Legislators.  In order to place the tax extension on the ballot a minimum of 3 Republicans in the Assembly and 2 in the Senate are needed.  With the inclusion of elimination of redevelopment agencies and the drastic cuts to health and human services and higher education programs, there may not be sufficient Democrat votes to get the tax extension on the ballot at this time. 

 

The bill SB x1 2 (Simitian) that would increase the amount of energy Californians receive from "renewable" production to 33% passed the state Senate last week.  The bill will be heard in the Assembly Utilities and Commerce Committee next week.  While most Californians support increasing the renewable energy portfolio some see the bill as too onerous in mandating California labor requirements in state production versus west wide production. Also the bill does not address the challenges in siting a renewable energy plant.  Since the bill was introduced in the extraordinary session it will move in an expedited manner through the legislative process and will likely be considered by Governor Brown this spring. 

 

The House and Senate this week moved with amazing speed to pass a two-week continuing resolution that will keep the federal government operating until March 18.  The House put the Senate in a political box when it put forward the two-week package, complete with $4 billion in additional spending cuts for FY2011 gleaned from President Obama's FY2012 budget proposal.   Within minutes of the Senate approving the House package this week, President Obama surprised House leadership by a call for leaders of both parties on both sides of the Hill to come to the White House to sit down with the Obama budget team, including Vice President Joe Biden and the director of the Office of Management & Budget, to find the pathway to keep the government funded through September 30.  The initial meeting of congressional leadership and White House budgeteers - led by Vice President Joe Biden - was to take place March 3.   

 

While the two-week extensions contain no cuts to ag spending, save for a $25-million broadband internet account targeted by the White House, several groups in Washington, DC, from traditional farm organizations to nutrition and child feed organizations, are moving to try and save program cuts included in the House-passed FY2011 appropriations bill that shaves $61 billion off current spending.   So far, the House and Senate are at a political impasse on how to address cuts in this year's spending.    Senate Majority Leader Harry Reid (D, NV) has not indicated how the Senate will handle HR 1, the House FY2011 spending bill, but Senate Republicans are supporting the House-passed bill; several Democrat senators have said they cannot support such deep cuts.  For himself, House Speaker John Boehner (R, OH) said, "Washington Democrats must either bring HR 1 to a vote in the Senate or outline and pass their own plan for cutting spending and keeping the government funded through September," Boehner said.  When asked why the Senate was not likely to do what Boehner suggests,  Senate Majority Whip Richard Durbin (D, IL) said the spending battles had become too political and the issues too complex.

 

It was punch/counterpunch this week in the House Appropriations Committee subcommittee on agriculture when Secretary of Agriculture Tom Vilsack appeared before the subcommittee to make his case the Obama administration's request for $23.9 billion in discretionary spending for FY2012.  It was immediately clear, subcommittee chair Rep. Jack Kingston (R, GA) sees little to praise in the Administration's budget proposal and wanted Vilsack to explain where he planned to cut spending without hurting farmers, ranchers and the food system.  Vilsack gave as good as he got, stating emphatically on more than one occasion his department was sticking with its spending plan, one, he said, that would contribute to rural development and create jobs and stimulate state economies. 

   

Kingston fired back that immediate spending cuts were needed and cited the department's continuing promotion of a $1-billion Internet broadband access program, several overseas food aid programs with alleged benefits that can't be measured and create unfair competition to developing nation farmers, and also went after the Conservation Reserve Program (CRP), a program Kingston said should be closely examined for cuts.  Kingston asked how many of the 32 million CRP acres enrolled are "environmentally sensitive."   "I think it's very oversubscribed," Kingston   said. "I think it's paying farmers not to farm in many cases."  "I think we have to take a look at [the program] but I think we are focused where we need to be," Vilsack said.  Vilsack was also peppered with questions from panel Democrats about the House-passed FY2011 spending package, alleging USDA's Food Safety & Inspection Service (FSIS) would take a disproportionate hit, that meat and poultry plants would close and animals destroyed because there wasn't enough money for continuous inspection.  

 

 

During a March 3 White House press briefing on President Obama's meetings this week with Mexico's President Felipe Calderone, both chief executives praised a proposed agreement between Mexico and the U.S.  to allow cross-border trucking access as required by the North American Free Trade Agreement (NAFTA).  The agreement is a long-awaited pact that will hopefully end millions of dollars in import tariffs on U.S. goods moving to Mexico.  Calderone said his country would begin phasing out "duty reprisals against the U.S. for non-compliance with NAFTA."  The agreement, negotiated by Department of Transportation Secretary Ray LaHood and his Mexican counterparts,  will allow over time Mexican trucking companies and drivers to travel beyond the "delivery zone" along this country's southern border, as long as both countries' companies and drivers meet all equipment, safety and licensing agreements of the respective countries.  Obama, for his part, said he "looked forward" to working with Congress to finalize the agreement.

 

A much-anticipated Government Accountability Office (GAO) report released this week shows the federal government is rife with overlapping, redundant and duplicative programs, and recommends consolidation of government functions from transportation to food safety.  Sen. Tom Coburn (R, OK), who requested the report, teased the media last week about the forthcoming report, saying once it had been read, it would not cast members of Congress in a good light.  "This report confirms what most Americans assume about their government. We are spending trillions of dollars every year, and nobody knows what we are doing. The executive branch doesn't know. The congressional branch doesn't know. Nobody knows," Coburn said.  The Oklahoma budget hawk estimated the government could save $100 billion a year streamlining its operations and eliminating duplicative programs in agriculture, health, homeland security defense, economic development, energy, general government, and international aid.  A GAO report is generally requested by a member of Congress to address a specific issue of concern.   

 

The reports are supposed to be objective evaluations and carry recommendations for remedying problems unearthed in development of the report.   Noting 15 federal agencies administer more than 30 food laws, the report stops short of recommending a single solution, but suggests alternative approaches including:  A single food safety agency, housed within an existing agency or set up as an independent agency, like EPA,  with responsibility for  all food safety at the federal level;   a single agency responsible for all inspection activities that could be housed at  USDA or FDA; a  data collection and risk analysis center for food safety, or central executive oversight of existing activities that would have a chair appointed by the president with control over spending and manpower.  The report says a single food agency wouldn't save money, but could avoid overspending in the future.  In the transportation arena, GAO said the Department of Transportation has five agencies overseeing more than 100 programs, another "fragmented approach" in oversight.   The report said the way the federal government oversees infrastructure has changed much since the 1950s and needs to be modernized.

 

 

The health and environmental benefits of vigorous Clean Air Act (CAA) regulation far outweigh the cost to industry, EPA said this week when it released a report on its overall enforcement of CAA requirements.  Meanwhile, EPA's defense had little impact on a handful of House Republicans who said this week they'll introduce a bill next week - with Democrat support - to permanently stop EPA from regulating greenhouse gas (GHG) emissions without specific authority and permission from Congress.  The legislation is the brainchild of House Energy & Commerce Committee Chair Fred Upton (R, MI) and Rep. Ed Whitfield (R, KY) who chairs the energy and power subcommittee.  Sen. James Inhofe (R, OK), ranking member of the Senate Environment & Public Works Committee, has floated the legislation in the Senate.    

 

And in a related development, Sen. Sherrod Brown (D, OH) sent President Obama a letter this week asking that he take a different approach to GHG regulation as the current EPA approach was "burdensome.  The EPA report, created by the agency with an outside board of independent experts, used as an example its regulation of air particulates and ground-level ozone as required  in the 1990 CAA  amendments, saying  this will prevent  230,000 deaths and save about $2 trillion by 2020.  House Democrats praised the EPA report, and Rep. Henry Waxman (D, CA), ranking member of the Energy & Commerce panel, gave reporters copies of a letter he sent to Upton calling for a committee hearing  on the science underlying climate impacts on air quality, before any markup of an EPA restriction bill is held.

 

 

A bipartisan bill designed to eliminate duplicative EPA pesticide applicator registrations based on the National Cotton Council's lawsuit against the agency was introduced this week in the House. The court ruled in the Cotton Council case that pesticide users had to get additional permitting by April 9, under the Clean Water Act (CAA) to use pesticides even though these uses are already permitted under the Federal  Insecticide, Fungicide and Rodenticide Act (FIFRA). Any user who doesn't have the new permit under the National Pollutant Discharge Elimination System (NPDES) faces heavy fines and the risk of lawsuits.  The bill would make it unnecessary for pesticide users to pull new permits for FIFRA-registered pesticides.