Washington Insider--Thursday

By DTN's Washington Insider

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Senate Finance Committee Leaders May Introduce 'Fast Track' Bill This Month

Senate Finance Committee Chairman Orrin Hatch, R-Utah, says he has been in negotiations with the panel's ranking Democrat, Oregon's Ron Wyden, on Trade Promotion Authority (TPA) legislation that they could co-sponsor and introduce later this month. "We might get a deal this month, but the earliest we can bring it to the floor would probably be April, if we're lucky," Hatch told reporters earlier this week.

Getting Congress to agree to a TPA bill is seen by many as a prerequisite to concluding several free-trade agreement negotiations in which the United States currently is engaged. House Ways and Means Committee Chairman Paul Ryan, R-Wis., has said the legislation would include negotiating objectives that lawmakers want to see in U.S. trade agreements, consultation procedures and streamlined voting procedures ("fast track") that provide for up-or-down votes with no amendments under strict timelines for conducting a final vote.

Given the many, varied interests represented by members, developing a Trade Promotion Authority bill that can command a majority in both houses is still seen as a challenging proposition. Reaction to the anticipated Hatch-Wyden bill therefore should provide some indication of just how challenging.

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Congressional Budget Office Estimates U.S. May Not Hit Debt Ceiling Until Fall

In its latest estimate, the Congressional Budget Office now says the Treasury Department may not run out of borrowing authority until this October or even November. "By CBO's estimate, the Treasury would probably have sufficient cash to make its usual payments through October or November — though earlier or later dates are possible — without an increase in the debt limit," the CBO said in a recent update to its estimate issued in January. The new date indicates the debt limit, due to reset at a higher level March 16, may last Treasury a bit longer than CBO's earlier estimate of September or October.

The country each year runs a deficit –– spending more than it takes in –– because Congress will not cut programs or raise the revenue needed to balance the budget. It therefore is clear that at some point Congress once again will be called upon to raise the statutory debt ceiling to allow the Treasury to borrow funds to fill the gap.

It is too early to tell when that might happen. It also is too early to tell whether Congress once again will take the country to the brink of a fiscal crisis for partisan political reasons or return the debt-ceiling increase to the routine action it was in virtually every year since the late 1950s until just recently.

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Washington Insider: Iowa Public Weighs in on Water Pollution

The Environmental Protection Agency and its regulations are probably the second-most unpopular agency in Washington, just behind the Internal Revenue Service, with local environmental quality branches sharing much the same image in most states. Even among deep-dyed environmentalists, the agencies are criticized for holding the wrong priorities or moving too slowly through the political minefields they inhabit.

So, in a related development, it is somewhat surprising that a solid 63% of Iowans believe Des Moines Water Works is right to pursue a lawsuit against drainage districts in three northwest Iowa counties where tests found record-high nitrate levels in streams feeding the main river that supplies much of central Iowa's drinking water.

Des Moines Water Works' expected suit claims that the several drainage districts, and indirectly farmers, are raising nitrate levels in the Raccoon River, a source of water for 500,000 Iowa residents. The utility says it must use expensive equipment to remove nitrates to make drinking water safe. To the surprise of many, the highly-regarded Des Moines Register Iowa Poll found strong support for the suit among Iowa groups and across economic classes and age groups.

The Register notes that the Clean Water Act now exempts many farm activities, but the litigation could force federal oversight that would hold farmers more accountable for runoff seeping into area waterways.

The survey's fine print shows more variation, with 79% of Democrats approving of the potential lawsuit, compared with 51% of Republicans. Some 71% of urban residents are supportive, compared with 63% of small-town residents.

Rural residents are split, but a slightly larger 44% share say Water Works is right while some 42% that think it is wrong.

The Register probed participants for more detail and quoted Laurie Maloney, who lives in northeast Iowa, as saying she supports Iowa's farmers but believes they need a push to add conservation practices. "The price of corn went up so high for a few years, people took every inch that might have been a buffer and put it into corn," said Maloney. "That really reduced the filtering capabilities of the soil."

Maloney is also worried about nitrates that might migrate from fields when manure is applied. "I'm a rural resident ... surrounded by ag land," Maloney said. "I'm concerned about the nitrates in well water for myself and for farmers."

In spite of public support for the litigation, ag and state leaders say that is the wrong course. Republican Gov. Terry Branstad told the press he thinks the lawsuit would polarize Iowans over an issue that requires long-term cooperation.

John Halstead, a poll respondent from Urbandale, disagrees. He doubts that water quality will improve without regulations that address nutrient runoff. "There are a lot of farmers who embrace conservation, but there are many who do not," Halstead said. "Unless water quality issues are corrected, they're just going to get worse," he said.

In 2013, the state adopted a plan, called the Iowa Nutrient Reduction Strategy, to cut by 45% the nitrogen and phosphorous that enters Iowa waterways and eventually contributes to the dead zone in the Gulf of Mexico each summer. The state, farmers, landowners and others are investing about $16 million in 13 watersheds to build and test conservation practices such as cover crops, wetlands and bioreactors to improve water quality.

Still, Bill Stowe, the Des Moines Water Works CEO, and others continue to criticize farmers for being slow to adopt the practices outlined in state nutrient reduction strategy, saying the voluntary effort has been ineffective in reducing nutrients. "This is an issue where the political leadership has failed to act and something needs to happen to correct the course," Stowe said.

So, Iowa producer groups get fairly high marks for efforts to put money into conservation practices that can help control nutrient runoff — but they also are being reminded that clean water is extremely important to all residents and that current programs likely will not be enough. This will continue to be a tough issue for politicians, who see their anti-EPA campaigns as holding that agency in check but who may be behind the curve in dealing with resident reactions to environmental threats like the one that emerged last year in Toledo and in Central Iowa.

These could well lead to tough production practice regulations like those evolving under the Chesapeake Bay Compact, and those being considered for streams entering Lake Erie — and, which could be in the offing in parts of Central Iowa.

These somewhat new types of regulations often come with objective water quality standards, and should be watched carefully by producers as they emerge since they have the potential to change accepted agricultural practices significantly, Washington Insider believes.

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(GH/CZ)

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