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As promised by the new Democratic leadership, the first 100 hours of the 110th Congress saw several high profile pieces of legislation quickly move through Congress. Since that time, work on the Iraq and Afghanistan War supplemental has drawn most of the Congress' attention prior to the Easter break. While the House and Senate version have not been conferenced to reconcile differences, the current Senate version of the supplemental spending bill contains $20 billion more than requested and a timetable for withdrawal which is likely to draw a Presidential veto, only the second time in this President's Administration.
Farm Bill
Discussion of the 2007 Farm Bill begins and ends with money. Specifically, how much money will be available to fund the leadership's agriculture program priorities? The March 2007 CBO Baseline indicates there is going to be significantly less funding available for the next farm bill than in the Baseline when the 2002 Farm Bill was passed. In response to this reality, both the Senate and House budget committees each forwarded budget resolutions instructing the finance committee to create an agricultural "reserve fund." The Senate set aside 15 billion, while the House set aside 20 billion. It still remains to be seen how the "reserve fund" would work, but under the pay-go budget rules imposed by the Democratic leadership any increase in agricultural spending would have to be off-set by increases in income or reductions in expenditures elsewhere. This greatly diminishes the likelihood that agriculture committees will see a substantial increase in funding for the 2007 Farm Bill.
Congressional leadership continues to indicate a desire to have the House and Senate versions of the Farm Bill finished before the summer recess. If successful, the two bills could be reconciled in conference committee once Congress returned and passed before the end of the fiscal year, which would coincide with the end of the current Farm Bill. Over the past few weeks at least some of the leadership indicates that, if the proposed timetable is unachievable, they may opt to pass a year or longer extension of the 2002 Farm Bill, or at the very least the current commodity provisions.
Recent statements by Secretary Johanns indicate that there could be progress made on the bill soon. USDA is currently taking their proposals for the 2007 Farm Bill and developing legislative language to deliver to the agriculture committees. This marks the first time since the early 1980s that an Administration has been willing to provide actual Bill language for their proposals. This is an indication that this Administration is willing to spend some political capital to push its agriculture agenda; a far different stance from the leadership in place when the 2002 Farm Bill was written.
Doha Round
While the negotiators are trying to revive the Doha Round of the WTO negotiations, there doesn't appear to be the substantial political will required from the U.S. and several other key countries to come to a conclusion. Without a substantial change in at least one of the trading powers' offers in the very near future, there seems to be little chance of getting a Doha Round agreement prior to the expiration of Trade Promotion Authority (TPA) on June 30th.
Supreme Court Greenhouse Gas Ruling
In a recent 5-4 opinion, the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) has the legal authority under the Clean Air Act to regulate "greenhouse gas" emissions from vehicles. In this decision, EPA was instructed to reconsider their decision not to regulate these emissions. It has been anticipated that regulating tailpipe emissions will result in increased costs for the nation's automakers. Depending on EPA's reaction, stricter greenhouse emissions requirements could further boost the demand for fuels like Ethanol and Biodiesel that are generally better with respect to greenhouse gases than fossil fuels.
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