Washington Insider--Wednesday

By DTN's Washington Insider

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

Ryan Keeps Tax Extenders Bill Ready, Just in Case

If Congress can't reach a far-reaching tax overhaul deal with the president by this summer, House Ways and Means Chairman Paul Ryan, R-Wis., says he plans to introduce a stand-alone bill to renew the dozens of expired tax breaks known as extenders. "Extenders can be either part of a limited tax reform package this summer, or if we just can't come together with the administration on that, then we immediately move to extenders and do those as early in the fall as possible so we can give people time to prepare and plan," Ryan said recently at a breakfast with reporters.

Once Ryan's committee completes work on the several trade bills it is facing, he said that the panel could return to work on tax issues such as an overhaul bill and extenders later this month. The House currently is on a one-week recess and has scheduled two full work weeks in Washington this month.

Ryan said House Republicans will continue to push permanency for select tax provisions that benefit businesses this year as a way to spark momentum for more comprehensively overhauling the U.S. tax code. Whether through individual bills, a tax overhaul or a broad extenders package, Ryan said he planned to resolve the extenders issue sooner than later. "My goal is to avoid what happened last year, which is on Dec. 11 people found out what the tax policy was going to be for two more weeks," Ryan said.

Altering the complex U.S. tax code is a notoriously complicated process and one that is usually made more difficult by the number of industry lobbyists who make special pleas for their employers. If Chairman Ryan can start the reform process this month and (just as importantly), maintain legislative momentum through this summer and fall, he may just be able to achieve his tax-reform goal before Christmas.

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JCT Reports Proposed Repatriation Tax Break Would Cost $118 Billion

A tax break for U.S. companies that repatriate offshore profits would cost the government $118 billion in revenue over a decade, a figure almost certain to create a setback to efforts to use the incentive to generate money for highway spending. The estimate from the Joint Committee on Taxation (JCT), the nonpartisan scorekeeper for Congress, is consistent with past estimates that cast doubt on the idea that a repatriation holiday can generate money additional revenue for the Treasury.

Companies based in the United States owe a 35% tax rate on the income they earn around the world. They receive tax credits for payments to foreign governments and don't have to pay the residual U.S. tax until they bring home the profits. The proposed repatriation would allow companies to bring back to the United States the more than $2 trillion they've stashed overseas to avoid taxes while paying a lower tax rate.

Sens. Rand Paul, R-Ky., and Barbara Boxer, D-Calif., have proposed a tax incentive for U.S. companies to bring home their offshore cash stockpiles and pledged to use that revenue to fund highways. The bipartisan proposal would let companies repatriate money parked overseas at a 6.5% tax rate, a steep discount compared with existing law. However, the JCT's estimate of a $118 billion cut in revenue over a decade is likely to slow or even stop the Paul-Boxer proposal. That, in turn, revives the question of what then will become the source of funds to pay for needed transportation projects. There is no easy answer.

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Washington Insider: Michael Pollan and Natural Food Labels

Michael Pollan is a University of California-Berkeley professor of journalism and a very clever wordsmith who writes fearlessly about many things. For example, he wrote a book called, The Omnivore's Dilemma that claims to have found four "basic" ways that human societies have obtained food ranging from our current "industrial" system to big organic operations, the local self-sufficient farm and the hunter-gatherer. Quite a stretch, you might say, to categorize all productions systems so roughly. You would be right.

Pollan also is described as an activist, in part because he sees a "fundamental tension" between the logic of nature and the logic of human industry and, that "industrial" obscures crucially important ecological relationships and connections.

The New York Times is a big fan of his, and in 2006 named The Omnivore's Dilemma one of the five best nonfiction books of the year.

So, Pollan would seem to be the ideal guy to help out with a definition of "natural" foods and products, since it is clear that while that use of the word is common everywhere, its meaning is not really clear — and its usage is confounding government agencies and courts across the country.

Writing in the New York times magazine recently, Pollan notes that "During the past few years, some 200 class-action suits have been filed against food manufacturers, charging them with misuse of the adjective in marketing such edible oxymorons as "natural" Cheetos Puffs, "all-natural" Sun Chips, "all-natural" Naked Juice, "100 percent all-natural" Tyson chicken nuggets and so forth.

Judges hearing these cases — many of them in the Northern District of California — have sought a standard definition of "natural" that they could cite to adjudicate these claims, only to discover that no such thing exists.

Pollan argues that something in the human mind, or heart, seems to need a word of praise for all that humanity hasn't "contaminated," and for us that word now is "natural." He points to several examples of such use such as the anti-vaccinationist goal of "natural immunity" from exposure to pathogen rather than a deactivated (and therefore harmless) version made by humans.

However, he also finds the adjective is "impressively slippery," surrounded by "dubious" assumptions that are easy to overlook. The most incoherent of these is the notion that nature "consists of everything in the world except us and all that we have done or made."

This, he thinks, goes too far. But he is unwilling to conclude that the concept of "natural" is unusable and states fearlessly that while neither federal judges nor the Food and Drug Administration could find a definition, the FDA was willing to offer that a food labeled "natural" should have "nothing artificial or synthetic" in it "that would not normally be expected in the food."

Then, he notes that FDA warns that the industry "might not want to press the point too hard, lest it discover that nothing it sells is natural."

As you might expect, Pollan thinks he sees a way forward. Although "at the margins" it's impossible to fix a definition of "natural," he suggests that there is a broad expanse of "common sense." It is, he says, not hard to say which of two things is "more natural." He pairs cane sugar versus high-fructose corn syrup; GMOs or heirloom seeds; and so on. And, then, this: "any food product that feels compelled to tell you it's natural in all likelihood is not."

Actually, Pollan may have bequeathed a plethora of labels: anything that is somehow more natural than something else has a chance at a new market of some sort, he seems to say.

Overall, the stakes in food marketing are so high that it is doubtful that even Pollan's non-definition will cure the enthusiasm for assertions of degrees of "naturalness" and value that he and other elitist foodies long have cultivated, Washington Insider believes.

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