What is in this article?:
- 2010 Election Results Likely Mean Status Quo for Agriculture, Farmers
- Where will cuts/additions be made?
- New ag committees in house and senate aren't likely to touch farm subsidy programs
- Direct payments are expected to be considered when Congress takes up new farm bill
- Political, ideological differences between divided House and Senate will stall movement on climate-change, trade policy, economic stimulus legislation
Where will cuts/additions be made?
Two related federal subsidies also could be on the docket for the 112th Congress, Doering says. Ethanol plants receive assistance to produce the biofuel, while its retail price is buoyed by a 45¢/gal. subsidy. Congressional action on both subsidies is complicated by the Renewable Fuels Standard (RFS), a federal law that mandates the increased production of biofuels.
"The ethanol subsidy ends in January, and Congress is going to have to decide what to do with it," Doering says.
"The RFS requires gasoline blenders to blend a certain amount of ethanol with their gasoline. It's 10% now, but the push is to take it to 12% or even 15%. The law requires that enough ethanol be purchased by the gasoline blenders to meet the standard's requirement. So they, in effect, have to force up the price of ethanol enough so that ethanol plants are actually able to produce ethanol at a profit so they can operate."
Doering predicts political and ideological differences between the divided House and Senate will stall movement on climate-change issues, trade policy and economic stimulus legislation.
An energy conservation bill by Indiana Sen. Richard Lugar, intended to reduce the country's dependence on foreign oil and encourage more efficient electricity use, might not get a congressional hearing, Doering says.
He also fears that Washington could enact risky import tariffs as a means of tackling the U.S. trade imbalance and fail to make the necessary investments in technology and the labor force to regain a competitive global edge.
"I think we've gotten tremendous splits of values on a lot of these issues to the point where there is a refusal to walk sort of a common-sense road down the middle," Doering says. "Whatever we see in terms of stimulus of the economy through expansion by the Federal Reserve, reduction in spending and whatever else isn't going to bring about much change.
"We are now at the bottom of the hole and there is nothing that the Republicans or Democrats can do at this point to dig us out of the hole quickly. We're in a hole that we've been digging ourselves into for at least 20 years."