Unless Congress Takes Other Actions, House Tax Bill Could Trigger Large Sequestration Cuts

By Jerry Hagstrom
DTN Political Correspondent

Washington (DTN) – Opponents of the House tax-reform bill pointed to the impacts of the budget deficit that could require major cuts to farm programs under current law.
Unless Congress takes other action, the increase in the deficit in the new tax bill would require 100% sequestration of many farm programs including Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) in January, the Congressional Budget Office said Nov. 14 in response to a request for analysis by House Minority Whip Steny Hoyer, D-Md.
The Statutory-Pay-As-You-GO Act of 2010 “requires that new legislation enacted during a term of Congress does not collectively increase estimated deficits,” CBO Director Keith Hall wrote in a letter to Hoyer that was also sent to House Ways and Means Committee Chairman Kevin Brady, R-Texas.
The White House Office of Management and Budget keeps a scorecard of the deficit over 10 years, and the implication of enacting a bill with a $1.5 trillion deficit would mean that OMB would add $150 billion to the deficit for 2018 and be required by the law to order sequestration cuts for 2018, Hall explained.
The CBO letter states that, based on the PAYGO law, the White House Office of Budget and Management would have to find between $85 billion to $90 billion in program cuts for 2018.
Because many programs including the Supplemental Nutrition Assistance Program and crop insurance are exempt, the result would be cutting 100% of other programs including many other farm programs, according to a chart.
Congress could apparently avoid the cuts by passing legislation to offset the deficit increase, wave the recording of the bill’s impact on the scorecard, or otherwise mitigate or eliminate the implications of the PAYGO law, according to Hall’s letter.
Hoyer said in a statement that the analysis “shows the full fiscal impact of the Republican tax bill’s massive deficit increases.”
“Adding $1.5 trillion in new deficits over a decade would be bad enough, but CBO shows how, under current law, statutory PAYGO will result in the complete elimination of all funding to dozens of mandatory programs next year, from assistance to farmers to border enforcement to student loans, as well as a roughly $25 billion cut to Medicare,” Hoyer said.
“This further illustrates the consequences of Republicans’ desire to provide huge tax breaks to the wealthiest while raising taxes on 36 million middle-class taxpayers.”
“I wrote the statutory PAYGO law when Democrats were in the majority because I believe that Congress has a responsibility not to load the next generation with a massive amount of debt,” Hoyer said. “With this tax bill, Republicans are irresponsibly planning to do just that.”
“While it is possible to avoid the PAYGO enforcement cuts triggered by their added deficits, Republicans would need Democratic votes to do it, requiring them to abandon their go-it-alone partisan strategy, which is only leading them on a path to failure and to putting our country in danger,” he said. “I urge them to abandon their disastrous tax bill and instead work with Democrats on real, bipartisan, permanent tax reform that won’t balloon our debt or trigger cuts under PAYGO.”
National Farmers Union President Roger Johnson said, “If Congress passes legislation that increases the deficit, they will subsequently be forced to cut federal spending. In the case of the tax bill, current law could require 100% sequestration of all commodity program payments and other farm bill programs.”
“Tax cuts for the highest income brackets should absolutely not come at the expense of programs that protect our nation’s family farmers and ranchers,” Johnson said.
Johnson noted the total available pool in CBO’s estimation, between $85 billion to $90 billion, means the sequestration would affect all mandatory spending programs other than Medicare, which includes the Commodity Credit Corporation (CCC).
“The CCC is the second-largest non-exempt mandatory program, after Medicare,” Johnson said. “It funds dairy and other farm program payments, including ARC and PLC, both of which are critical for keeping family farmers and ranchers in business during times of economic uncertainty.”
Johnson added that Farmers Union has opposed using budget sequestration to reduce the federal deficit, especially through cuts to agricultural programs.
“This proposal asks farmers and ranchers to trade any possible tax benefits for the elimination of farm safety net payments, like ARC and PLC,” Johnson said. “That would be a disastrous trade. NFU continues to advocate for a simplified, progressive tax code that does not risk programs vital to the livelihoods and well-being of American family farmers and ranchers.”

Trump Administration Seeks To Delay Findings On Pesticides

Washington (AP) – President Donald Trump’s administration is seeking a two-year delay of an upcoming deadline to determine whether a family of widely used pesticides is harmful to endangered species.
The request filed before a federal judge comes after Dow Chemical Co. and two other pesticide makers asked the government to set aside research by federal scientists that shows organophosphates are harmful to about 1,800 critically threatened or endangered species.
Under a 2014 legal agreement, the National Marine Fisheries Service is required to issue findings on the use of the three pesticides under review – chlorpyrifos, diazinon and malathion – by the end of this year. The Environmental Protection Agency, which is also involved in the case, is responsible for determining whether pesticides sold in the United States are safe for people and wildlife.
The Associated Press first reported in April that lawyers representing Dow and the other companies sent letters to three of Trump’s Cabinet secretaries claiming the government’s studies were fundamentally flawed. Dow wrote a $1 million check to help underwrite Trump’s inaugural festivities, and company CEO Andrew Liveris led a now-disbanded White House manufacturing working group.
It is the latest example of the Trump administration seeking to block or delay environmental rules at the behest of the industry.
EPA Administrator Scott Pruitt in March reversed an Obama-era effort to bar spraying chlorpyrifos on fruits and vegetables after peer-reviewed studies found that even tiny levels of exposure could hinder the development of children’s brains.
Government scientists also compiled an official record running more than 10,000 pages indicating the three organophosphates pose a risk to nearly every endangered species they studied. Before the change in administration, federal regulators had been expected to issue new limits on how and where the three pesticides can be used.
Organophosphorus gas was originally developed as a chemical weapon before World War II. Dow, based in Midland, Michigan, has been selling chlorpyrifos for spraying on citrus fruits, apples, cherries and other crops since the 1960s. It is among the most widely used agricultural pesticides in the United States, with Dow selling about 5 million pounds (2.3 million kilograms) domestically each year.
A coalition of environmental groups has fought in court for years to spur the federal government to more closely examine the risk posed to humans and endangered species by pesticides, especially organophosphates.
“It’s appallingly clear that the pesticide industry is now essentially running Trump’s EPA,” said Lori Ann Burd, environmental health director at the Center for Biological Diversity. “Rather than following the science and the law, the agency is turning its back on endangered species across the country.”

Cattle Raisers Disappointed With Oklahoma Beef Checkoff Outcome

Oklahoma City, Okla. – Beef producers had an opportunity to vote in an Oklahoma referendum to approve a $1 per head state beef checkoff assessment in addition to the current U.S. Beef Checkoff program. Oklahoma Department of Agriculture, Food and Forestry secretary Jim Reese announced the results of that referendum, with the measure failing 55.6 percent to 44.3 percent.
The Texas and Southwestern Cattle Raisers Association (TSCRA) is a strong supporter of the U.S. and Texas Beef Checkoff programs, and supported the Oklahoma measure. Had it been approved, the funds would have been used to market, promote and educate consumers about beef and beef producers. Oklahoma would have also joined 15 other states, including Texas, who have already adopted a state-level beef checkoff program.
“I am disappointed that the Oklahoma beef checkoff referendum was swayed by outside activists and did not succeed,” said TSCRA president Richard Thorpe. “Texas cattle raisers have seen an immense benefit from their state-level checkoff program, and I had hoped that same success would be extended to Oklahoma producers.”
A 2014 economic study conducted by Dr. Harry Kaiser of Cornell University reaffirmed those benefits. The study concluded that current checkoff programs yield an $11.20 return for every dollar invested.
Despite the outcome, Thorpe remains hopeful. “It is hard to dispute the incredible return on investment provided by beef checkoff programs, and I am optimistic that the facts will eventually prevail over out-of-touch activists,” he said.
For more information on the checkoff and referendum results, visit www.oklahomabeefcheckoff.com.

Direct Receipts

Direct Receipts: 28,500

Texas 12,300. 83 pct over 600 lbs. 38 pct heifers. Steers: Medium and Large 1 FOB Current 715-725 lbs 159.96; 750-775 lbs 154.70; 800-825 lbs 150.24; 850 lbs 147.50; Dec-Jan 850 lbs 156.94; May 750 lbs 147.50; Del Feb 800 lbs 150.00. Medium and Large 1-2 FOB Current 585 lbs 166.39; 625 lbs 161.51; 650-675 lbs 157.65; 705-730 lbs 152.61; 750-785 lbs 148.71; Jan 700 lbs 149.40; 775 lbs 152.50; Feb 750 lbs 146.90; Del Current 445 lbs 182.00 Mex; 510 lbs 167.00 Mex; 585-595 lbs 157.52 Mex; 640-645 lbs 156.78; 675 lbs 160.00; 745 lbs 156.00, 720 lbs 150.00 Mex; 765-775 lbs 152.88; 800-835 lbs 151.29; 850-880 lbs 151.53; Dec-Jan 600 lbs 170.00. Heifers: Medium and Large 1 FOB Current 590 lbs 149.77; 665 lbs 153.00; 725 lbs 151.25; 750 lbs 144.25; Dec-Jan 825 lbs 146.69; Jan 685 lbs 146.50; 725 lbs 146.70; Feb 700 lbs 140.50; Del 700-725 lbs 140.00; Mar 700 lbs 141.75. Medium and Large 1-2 FOB Current 580 lbs 151.27; 600-640 lbs 145.93; 650-690 lbs 144.15; 710-745 lbs 144.37; Del Current 490 lbs 155.00 Mex; 585 lbs 156.90, 580 lbs 148.00 Mex; 600-630 lbs 156.81; 690 lbs 150.00; 725 lbs 153.00; 750 lbs 150.00; Dec-Jan 600 lbs 150.50.

Oklahoma 2100. 96 pct over 600 lbs. 32 pct heifers. Steers: Medium and Large 1 Current 635 lbs 161.91; 650-685 lbs 160.75; 740 lbs 156.60; 750 lbs 155.00; 800-825 lbs 156.41; 850 lbs 153.55; Dec 600 lbs 167.59; 800 lbs 150.87. Heifers: Medium and Large 1 Current 740 lbs 145.00; 775 lbs 153.55; Dec 600 lbs 148.09. Medium and Large 1-2 Mar 700 lbs 139.00.

New Mexico 300. 100 pct over 600 lbs. 37 pct heifers. Steers: Medium and Large 1-2 Current 800-825 lbs 151.12. Heifers: Medium and Large 1-2 Current 750 lbs 149.48.

Kansas 2700. 100 pct over 600 lbs. 5 pct heifers. Steers: Medium and Large 1 FOB Current 800-825 lbs 154.63; 850 lbs 153.00; Del 625 lbs 167.00; 675 lbs 163.00. Medium and Large 1-2 FOB Current 665 lbs 157.00; Del 670-675 lbs 159.75; 700-720 lbs 158.04; 775-785 lbs 149.13; Jan 650 lbs 164.00; 700 lbs 153.50; 775 lbs 153.50; Feb 750 lbs 151.00. Heifers: Medium and Large 1 FOB Current 765 lbs 144.00.

National Feeder Cattle Summary

St. Joseph, MO — December 1
National feeder cattle receipts: 257,400

Steers and heifers traded steady to $5 higher as most auctions were filled with spring calves making their way to town for the first time. Most mid-week auctions were in fact looking back two weeks ago due to the Thanksgiving day holiday and they had some catching up to do as receipts were large. Demand was good to very good for all classes of cattle this week even with many calves coming through the ring right off the cow. Farmers are finishing up harvest as corn harvested was reported at 95 percent as of November 26. With the unseasonably warm and dry weather across the country this week, expect that number to get even closer to completion. Farmers in the Plains states are pretty much done, however Indiana, Ohio and Michigan are the states lagging behind the most. Some farmers can now turn their attention to their livestock enterprise. If they still have fences coupled with corn and wheat having bleak outlooks on P&L statements, farmers have shown up to sale barns from the Southern Plains to the Northern Plains this week. Several calf specials are on the calendars for this three week rush before the Christmas holiday. Fed cattle harvests have been aggressive this summer and fall as both international and domestic demand for beef have only fueled the packer profitability for over six months now. Feedyards continue to market cattle in a timely fashion to keep the front-end current supply in check. December Live cattle futures have been ho-hum the past couple weeks to close Dec. 1 at $117.23, $1.34 lower than last Nov. 24 close. Feeder Cattle futures lost some momentum a couple weeks ago and have recovered to close Dec. 1 at $150.33, $2.97 lower than a week ago. Cash fed cattle trade broke out on Nov. 30. In the Texas Panhandle, live purchases were $3 higher at $121. In Kansas, live purchases were $2-3 higher from $120-121. In Nebraska, live purchases were $1 higher at $121 and dressed purchases were steady at $190. In the Western Cornbelt, live purchases were $1-2 higher from $120-122, with dressed purchases steady at $190. There were some notable feeder cattle sales throughout the week. On Nov. 27 at the Sioux Falls Regional Livestock Auction in Worthing, South Dakota, a load of 926 pound steers sold at $160.50. Even more remarkable, on Nov. 29 at the Huss Platte Valley Auction in Kearney, Nebraska, two loads of 920 pound heifers sold at an impressive $161.50. Both of these sales are just shy of $1500 per head. Choice boxed beef values closed $5 lower than last Nov. 24 at $205.99. Select closed as $183.61, with the Choice Select spread at $22.38.

Texas 2200. 38 pct over 600 lbs. 40 pct heifers. Heifers: Medium and Large 1-2 300-350 lbs (327) 167.30; 500-550 lbs (533) 130.89; 550-600 lbs (572) 127.30; 600-650 lbs (634) 127.37.

Oklahoma 35,200. 48 pct over 600 lbs. 41 pct heifers. Steers: Medium and Large 1 300-350 lbs (326) 204.43; 350-400 lbs (376) 195.91; 400-450 lbs (423) 193.22; 450-500 lbs (475) 181.54; 500-550 lbs (525) 173.45; 550-600 lbs (573) 163.43; 600-650 lbs (628) 160.16; 650-700 lbs (676) 160.31; 700-750 lbs (724) 157.85; 750-800 lbs (764) 154.97; 800-850 lbs (817) 158.39; 850-900 lbs (863) 161.11; 900-950 lbs (921) 151.75; few loads 1017 lbs 143.50. Medium and Large 1-2 300-350 lbs (331) 196.54; 350-400 lbs (381) 180.29; 400-450 lbs (427) 180.00; 450-500 lbs (485) 174.16; 500-550 lbs (525) 164.04; 550-600 lbs (579) 157.26; 600-650 lbs (623) 153.07; 650-700 lbs (682) 152.02; 700-750 lbs (724) 152.08; 750-800 lbs (770) 149.26; 800-850 lbs (839) 150.36; 850-900 lbs (886) 142.47. Heifers: Medium and Large 1 300-350 lbs (326) 164.96; 350-400 lbs (381) 165.28; 400-450 lbs (428) 158.08; 450-500 lbs (473) 152.01; 500-550 lbs (530) 147.75; 550-600 lbs (578) 149.10; 600-650 lbs (628) 149.64; 650-700 lbs (671) 148.39; 700-750 lbs (727) 147.79; 750-800 lbs (769) 146.92; 800-850 lbs (818) 142.27; 850-900 lbs (883) 140.00; 900-950 lbs (912) 136.02; 1000-1050 lbs (1041) 133.20. Medium and Large 1-2 250-300 lbs (290) 177.95; 300-350 lbs (329) 160.85; 350-400 lbs (378) 160.43; 400-450 lbs (426) 146.97; 450-500 lbs (477) 145.06; 500-550 lbs (532) 141.84; 550-600 lbs (570) 140.55; 600-650 lbs (628) 142.56; 650-700 lbs (671) 143.24; 700-750 lbs (721) 140.68; 750-800 lbs (774) 139.67; 800-850 lbs (818) 139.79.

New Mexico 5500. 40 pct over 600 lbs. 46 pct heifers. Steers: Medium and Large 1 400-450 lbs (435) 183.12; 450-500 lbs (468) 171.91; 500-550 lbs (526) 161.33; 550-600 lbs (567) 156.17; part load 620 lbs 151.50. Medium and Large 1-2 300-350 lbs (322) 205.50; 350-400 lbs (368) 194.31; 400-450 lbs (439) 176.73; 450-500 lbs (481) 166.75; 500-550 lbs (530) 156.81; 550-600 lbs (584) 149.48. Heifers: Medium and Large 1 350-400 lbs (374) 160.76; 400-450 lbs (430) 159.27; 450-500 lbs (477) 147.31; 500-550 lbs (522) 142.31; 550-600 lbs (584) 135.74; pkg 679 lbs 137.00; 700-750 lbs (711) 136.21. Medium and Large 1-2 400-450 lbs (433) 147.57; 450-500 lbs (465) 144.65; 500-550 lbs (520) 140.39; 550-600 lbs (568) 136.17.

Kansas 2900. 63 pct over 600 lbs. 40 pct heifers. Steers: Medium and Large 1 450-500 lbs (470) 195.38; 500-550 lbs (528) 184.07; 600-650 lbs (605) 166.87; part load 799 lbs 160.50; 800-850 lbs (822) 160.16; 850-900 lbs (869) 159.34. Medium and Large 1-2 450-500 lbs (497) 178.17. Heifers: Medium and Large 1 450-500 lbs (485) 158.83; 500-550 lbs (532) 160.56; 550-600 lbs (575) 156.23; part load 702 lbs 153.75; part load 777 lbs 151.00; 800-850 lbs (822) 147.74. Medium and Large 1-2 400-450 lbs (424) 169.16; 500-550 lbs (532) 148.28; 550-600 lbs (585) 149.64.

Missouri 38,600. 42 pct over 600 lbs. 40 pct heifers. Steers: Medium and Large 1 300-350 lbs (322) 196.42; 350-400 lbs (378) 192.48; 400-450 lbs (424) 188.48; 450-500 lbs (477) 179.37; 500-550 lbs (526) 175.18; 550-600 lbs (573) 168.89; 600-650 lbs (622) 165.17; 650-700 lbs (674) 163.28; 700-750 lbs (719) 161.25; 750-800 lbs (768) 159.18; 800-850 lbs (826) 159.85; 850-900 lbs (878) 158.89; 900-950 lbs (911) 159.32.Medium and Large 1-2 300-350 lbs (327) 176.58; 350-400 lbs (374) 175.36; 400-450 lbs (432) 172.87; 450-500 lbs (479) 168.37; 500-550 lbs (525) 164.65; 550-600 lbs (579) 159.21; 600-650 lbs (628) 154.92; 650-700 lbs (673) 151.51; 700-750 lbs (723) 149.88; 750-800 lbs (776) 155.14; 800-850 lbs (823) 144.13. Holstein Steers: Large 3 part load 798 lbs 89.50. Heifers: Medium and Large 1 300-350 lbs (327) 163.62; 350-400 lbs (373) 162.50; 400-450 lbs (428) 157.40; 450-500 lbs (477) 155.19; 500-550 lbs (525) 151.27; 550-600 lbs (573) 149.83; 600-650 lbs (622) 149.73; 650-700 lbs (674) 145.07; 700-750 lbs (725) 144.05; 750-800 lbs (771) 140.51; 800-850 lbs (824) 138.04; 850-900 lbs (888) 138.88. Medium and Large 1-2 250-300 lbs (278) 149.01; 300-350 lbs (327) 153.50; 350-400 lbs (379) 151.01; 400-450 lbs (429) 147.12; 450-500 lbs (477) 144.88; 500-550 lbs (527) 144.07; 550-600 lbs (574) 140.69; 600-650 lbs (619) 140.75; 650-700 lbs (673) 140.75; 700-750 lbs (725) 133.49; 750-800 lbs (768) 136.03; 800-850 lbs (818) 127.73.

Arkansas 12,000. 21 pct over 600 lbs. 42 pct heifers. Steers: Medium and Large 1 300-350 lbs (321) 196.30; 350-400 lbs (376) 182.47; 400-450 lbs (423) 179.76; 450-500 lbs (472) 168.60; 500-550 lbs (522) 163.02; 550-600 lbs (570) 157.04; 600-650 lbs (624) 152.48; 650-700 lbs (676) 145.70. Heifers: Medium and Large 1 300-350 lbs (328) 162.19; 350-400 lbs (378) 155.52; 400-450 lbs (425) 151.60; 450-500 lbs (475) 146.23; 500-550 lbs (523) 140.48; 550-600 lbs (575) 137.26; 600-650 lbs (621) 134.11; 650-700 lbs (668) 135.87.

 

 

 

 

 

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Tuesday, December 5, 2017 4:22 PM