There are lots of decisions to be made in the beltway—and farmers should be aware.
As the appointees to several key USDA positions were busy getting settled in their new offices, congressional budget writers were scrambling to prepare and pass the 2018 budget resolution.
Passage of the resolution was a hot-button issue for Congressional Republicans as they planned to use the budget reconciliation process to advance tax legislation. The resolution would allow for $1.5 trillion in tax cuts. Early in the process, the house version of the budget included $10 billion in cuts in agriculture spending, but the Senate version did not include those cuts. Early speculation was that the final agreement would not include any farm bill cuts.
2. Tax reform package
In mid-October, President Donald Trump and House and Senate Republican leadership released their tax reform package. This package lowers tax rates for individuals and businesses and repeals the death tax. Early on, USDA Secretary Sonny Perdue praised President Trump’s vision for reform of the American tax code.
Repeal of the estate tax is only one provision in the proposed tax package that will affect farmers and ranchers. Other provisions include lowering the income tax rate for individuals and families, and a change to only three tax brackets.
One item not included in the package was clarification on the issue of cash accounting and on the stepped up basis provision for capital gains on inherited property. Both are concerns that producers will be asking their members of Congress to address prior to voting for the package. While discussing the proposed tax package, House Speaker Paul Ryan reminded members of Congress they must be prepared to stay over the holidays if tax reform is not passed.
3. Ag workforce legislation
Virginia congressman Bob Goodlatte, Chairman of the House Judiciary Committee introduced the Agricultural Guest Worker Act, which would establish a new agriculture guest worker visa program. This program would replace the exiting H-2A and would authorize temporary foreign workers for an initial stay in the U.S. for up to 36 months. The workers would need to return to their home country for one month of every year in the U.S.
Undocumented workers who can demonstrate agricultural work experience in the past two years, could receive an H-2C visa. The program places a cap of 500,000 workers who would be granted the visas in the new program.
The intent of the bill is to authorize H-2C workers in meat and poultry plants to conduct slaughter and fabrication activities. Other duties such as cooking would have to be approved by USDA through the rulemaking process.
The National Pork Producers Council (NPPC) has long championed the need for a viable workforce program to continue to remain completive worldwide. The NPPC and other agriculture groups have expressed concerns that in the past, the existing program was not adequate to guarantee a consistent workforce.
4. Farm bill
The Congressional Agriculture committees continue to work on the next farm bill. It is expected the House group will have a bill completed yet this year. Many existing programs do not have a budget base line beyond FY2018. Currently there are 37 programs that have received mandatory funding. Earlier this year, the Congressional Research Service issued a report that outlined the programs without baselines. Even though these programs represent only a fraction of total spending in the bill, if there is not new legislation, they won’t be funded past FY2018. The programs had an estimated mandatory spending total of $2.61 billion over the five-year life of the last farm bill. Congressional leaders have heard from constituents that these programs need to be included and funded via the 2018 farm bill. Congressional sources say many of the programs will be included in the new bill, but most likely, funding will be trimmed back to align with the overall cuts in spending being discussed by Congress.
5. Doud for chief ag negotiator
Gregg Doud, the current president of the Commodity Markets Council, was nominated by President Trump to be the U.S. Trade Representative’s chief agriculture negotiator.
Doud has endorsements from many agriculture groups. His resume includes active engagement in agriculture policy for many years: He has served on the professional staff of the Senate Agriculture committee and as a chief economist for the National Cattlemen’s Beef Association.
6. Farmers for free trade
The American Farm Bureau Federation announced their support for the new Farmers for Free Trade Group in mid-October. The non-profit organization was created to rebuild support for trade at the grassroots level. Max Baucus and Richard Lugar lead the non-profit organization.
Farmers for Free Trade is a bipartisan group that informs, mobilizes and amplifies the voice of U.S. farmers and ranchers who depend on worldwide markets.
For more information, go to www.farmersforfreetrade.com.