2011 in Review Politics & Policy

Transcription

1 Michael Dykes Monsanto Government Affairs 2011 in Review Politics & Policy Debt, Deficits, and Funding the Government 2012 The Year Ahead Farm Bill, Trade, and Other Ag Policy Issues 2 1

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3 Length of Occupation 8years, 9 months U.S. Soldiers Killed 4,500 U.S. Soldiers Wounded 32,000+ U.S. Financial Costs $845 billion and counting th Congress sworn in Jan Divided government: Republican House, Democratic Senate 93 House Freshmen (84 Republicans), 13 Senate Freshmen (12 Republicans) Tea Party influence Battles over funding the government and raising the debt ceiling Pushback on Obamacare, EPA, and financial reform 6 3

4 Current Debt Ceiling: $15.1 trillion $ in Trillions Source: CBO data 7 Budget Control Act of 2011 Signed into law Aug. 2, 2011 The law raised the federal debt ceiling by $2.1 to $2.4 trillion in exchange for an equal amount of spending cuts, in two steps. Step 1: $900 billion in automatic cuts by capping some programs for 10 years (entitlements exempted) Step 2: $1.2 to $1.5 trillion in cuts decided by a Supercommittee made up of 12 House and Senate members or automatically, if the Supercommittee process fell short. Supercommittee failed to produce a bill U.S. credit rating downgraded Farm Bill debate affected Automatic cuts, defense programs included, will happen in January 2013 or will they? 8 4

5 Before this law, the US was projected to add $10 trillion in debt over the next 10 years. Instead, we are projected to add $7 trillion in debt. The long-term debt trajectory of the US has not significantly changed. Total debt ($15.1 trillion) is now more than 100% of our Gross Domestic Product (~$15 trillion). 9 House passed a budget in April (Ryan budget) Senate didn t pass one for the second straight year Politically tough votes avoided as a result Fiscal year 2012: Oct. 1, 2011 Sept. 30, appropriations bills fund the federal government; zero were completed at the start of the fiscal year 9 of the 12 completed a week before Christmas 10 5

6 11 Gallup s approval ratings for Congress reached an all-time low of 13% in Dec A year later, they reached 11%, another new low. A separate June 2011Gallup poll ranks Congress dead last among 15 national institutions rated on trust. Source: Gallup, Dec

7 13 State of the Union address: January 24 President s budget: early February Congressional budgets: April??? Supreme Court Obamacare ruling: Summer? 12 appropriations bills due: October 1 Congress adjourns: October Elections: November 6 Lame duck session: December??? 14 7

8 Symbolic debt ceiling vote Congressional disapproval of raising the ceiling past $16 billion (passed the House on January 18) Obama vetoes disapproval and the ceiling is raised unless the veto is overridden Next debt ceiling vote may be near the end of 2012 Comprehensive tax reform discussion Unfinished business from 2011 Presidential Politics Farm Bill? Protectingthe Ethanol Mandate Focus on Ag Trade Lame Duck Session? 15 Popular expiring tax provisions were extended for only two months Soc. Sec. payroll tax holiday ($100+ billion/yr) Unemployment insurance ($60/70 billion/yr) Medicare reimbursement rate for physicians ($16 billion/yr) Debate will continue Obama s current #1 legislative priority is a full-year payroll tax extension House and Senate already discussing an extension Keystone XL pipeline still a political issue? Obama declined the application, but Congressional Republicans vow to keep it in play for

9 17? Vs. 18 9

10 The 2012 Battleground: Total: 112 EVs States won by George W. Bush in 2004 and Barack Obama in (2012 electoral votes in parentheses) 10

11 Current Farm Bill expires Sept Attempt at including the farm bill in the Supercommittee fell apart Supercommittee rules would have prevented it from being amended and required only a simple majority vote House & Senate ag leaders had recommended$23 billion in gross cuts to mandatory spending $15 billion from Title I commodity programs $5 billion from nutrition assistance (SNAP) $7 billion from other programs, primarily Title II conservation $4 billion added for other Farm Bill programs that aren t funded beyond 2012, including specialty crop programs 22 11

12 23 Farm Bill Reality 2002 Farm Bill 2008 Farm Bill Nutrition 61% Title I 25% Other 14% Nutrition Nutritio 78% n Title I 8% Other 14% $45 Billion Per Year Source: USDA $80 Billion Per Year 24 12

13 Regular legislative order? More Committee hearings? Field hearings? Committee debate House and Senate floor debate Open rule? Presidential support in an election year? Budgets will drive the process less money! 25 Bill mandated 36 BGY of renewable transportation fuels by Renewable Fuel Standard (RFS) 35 Billion gallons per year BGY of advanced biofuels Renewables other than corn starch to ethanol (cellulosic, sugarcane, etc) 50-60% GHG reduction 15 BGY of corn-based ethanol 20% GHG reduction GHG = greenhouse gas 26 13

14 Source: USDA Foreign Ag Service, Aug Source: USDA Foreign Ag Service, Dec

15 Bush tax cuts expire at the end of 2012 Treasury Dept. estimates cost of $2.9-$3.6 trillion over 10 years depending on whose reduced rates are extended Farm bill extension? But it may not matter

16 Despite all the controversy and uncertainty, agriculture is a bright spot 31 The Reality By 2050 world population will have increased by 2 billion 80% of growth in developing countries The Challenge Need to double food production No increase in arable land Water availability? 32 16

17 Roundup Ready Alfalfa back on the market after 4 years of litigation January 5, 2012: Positive court ruling Roundup Ready Sugarbeets remain available for growers Litigation continues USDA approved 9 products in 2011 Reducing approval times to months Brazil has approved 20 biotech products since

18 Fewer and fewer people are involved in agriculture It is important to get to know your political leaders and their staff Explain how policies affect your business, your employees and your family Invite them to visit your farm or business 35 Questions and Discussion Thank you! 36 18