READ the NAFB's National Ag News as heard inside the BARN for January 2nd, 2013...

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At the time of this being published…

*UPDATED – JANUARY 1sr, 2013 @ 10pm MT*

“Congress Rushes to Avoid Cliff”

While the country technically went over the fiscal cliff at midnight Tuesday – any significant impact should be avoided as negotiators were able to reach a deal late Monday night that was approved by the Senate early Tuesday morning by a vote of 89 to 8. Late Tuesday night it was also approved by the House on a 257 to 167 vote. The package permanently extends current tax rates for families earning less than 450-thousand dollars a year and permanently patches the alternative minimum tax. Automatic, across-the-board spending cuts that were scheduled to start this month will be postponed for two months. The estate tax – which was set to increase from 35-percent to 55-percent – will increase to a 40-percent tax rate with a five-million dollar exemption. Capital gains and dividend tax rates for those earning less than 450-thousand are permanently extended – while rates for those earning more will increase from 15-percent to 20-percent. The measure also extends the 2008 Farm Bill for the rest of the fiscal year. Because the votes came after the December 31 deadline – the final deal will take place retroactively so tax rates continue uninterrupted for most American taxpayers.

Ahead of the vote – House Minority Whip Steny Hoyer urged his colleagues to vote not as Democrats and Republicans – but as Americans who understand that the people believe action is needed. Hoyer also expressed some regret that the plan was not big, bold and balanced. He said there was an opportunity to reach such an agreement in a bipartisan fashion – adding that a big, bold, balanced plan isn’t possible without bipartisanship.

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“President Obama on Tax Agreement”

President Obama said the legislation passed by Congress Tuesday to avoid the fiscal cliff delivers on his campaign promise to change the tax code that was too skewed toward the wealthy at the expense of middle-class Americans. Crediting Democrats and Republicans – he said he will sign a law that raises taxes on the wealthiest two-percent of Americans and prevents a middle-class tax hike that could have sent the economy back into recession. According to the President – more than 98-percent of Americans and 97-percent of small businesses will now not see their income taxes go up and millions of families will continue to receive tax credits to help raise their kids and send them to college. President Obama also pointed out that companies will continue to receive tax credits for the research they do, the investments they make and the clean energy jobs they create. But President Obama also said this law is just one step in the broader effort to strengthen the economy.

President Obama said he is open to compromise as Congress continues to chip away at the deficit – but continued to argue that cutting spending must go hand-in-hand with further reforms to the tax code. He also said he will not have another debate with the Congress over whether or not they should pay the bills they’ve already racked up through bills they have passed. If Congress refuses to give the U.S. government the ability to pay its bills on time – President Obama said the consequences for the entire global economy would be catastrophic.

According to the President – the sum total of all the budget agreements reached so far proves there is a path forward. President Obama said Democrats and Republicans can come together to cut spending and raise revenue in a way that reduces the deficit, protects the middle class and provides ladders into the middle class for those willing to work hard. He added that the debate can be handled in a way that it doesn’t stop legislators from meeting a host of other challenges we face – including creating jobs, fixing our immigration system and boosting domestic energy production.

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“Congress Deals with Farm Bill After All”

Reports late Monday night were that an extension of the 2008 Farm Bill was not likely to be considered as part of the fiscal cliff legislation. But an extension of the current measure through the end of September 2013 was ultimately included in the measure approved by the Senate early Tuesday morning and by the House late Tuesday night. Reports are that the extension included in the package is a trimmed-down version of the plan proposed by Senate and House Agriculture committee leaders over the weekend. A Senate aide said it would extend the dairy program some want to replace and leaves out disaster assistance. There is also no funding for energy provisions and other expired programs that were in the 2008 legislation. Pat Roberts – Ranking Member of the Senate Ag Committee – said the extension isn’t the best possible bill but is the best bill possible at this time. He said it provides consumers certainty by avoiding the dairy cliff -and provides certainty to producers and their lenders as Congress continues work on a Farm Bill in 2013. Senate Ag Chair Debbie Stabenow called the farm bill extension incomplete – stating that it ends funding for important parts of the bill while continuing costly taxpayer subsidies that were ended in the Senate-passed farm bill. Rather than embracing the bipartisan Senate farm bill – which cut 24-billion dollars in spending – Stabenow said McConnell insisted on a partial extension with no reform and no deficit reduction. She also said the partial extension hurts many areas of the agriculture economy. A McConnell spokesman said the Senator put forward a bipartisan, responsible solution that averted the dairy cliff and provided certainty to farmers for the next year without costing taxpayers a dime.

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“NFU Says Congress Left Rural America Out in Cold”

Following House passage of the Tax Relief Extension Act – more commonly known as the fiscal cliff bill – National Farmers Union President Roger Johnson accused Congress of leaving rural America out in the cold. He said the extension included in the legislation represents a short-sighted, temporary fix that ultimately provides inadequate solutions that will leave our farmers and ranchers crippled by uncertainty. Johnson noted the legislation doesn’t provide disaster aid or necessary support for the dairy industry – while continuing unjustifiable direct payments. Johnson added that the bill doesn’t provide mandatory funding for the energy title, specialty crops and organic provisions or new beginning farmer and rancher programs. According to Johnson – all Americans deserve better and would have been better served with a new five-year farm bill. He called it a shame that the bipartisan work of the Senate and House Agriculture Committees was summarily and entirely discarded.

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“AFT Unhappy with Decision to Extend Farm Bill”

American Farmland Trust calls the decision to extend the current farm bill a missed opportunity. They say it leaves farmers less secure and puts important programs that conserve soil and improve water quality in limbo. AFT President Jon Scholl says Congress missed the perfect opportunity to sew up a long-term, well-balanced farm bill that gives farmers the certainty they need to plan for the future, install sound farm program reforms and assure a fair sharing of the necessary budget sacrifices. Scholl adds that an extension sets the stage for a difficult farm bill process in the next Congress. He notes the committees will have to rewrite the farm bill – likely while facing a greater budgetary challenge once the Congressional Budget Office releases new baseline numbers in March. He says AFT strongly urges that farm and ranch land conservation program funding be protected.

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“Growing Concern for Mississippi River”

Concern about the Mississippi River is growing as ice is further reducing water levels. Some now predict barge traffic could come to a halt in the next two weeks. The river level is projected to drop another three-feet at the river gauge in Thebes, Illinois on January 7th – which equates to a ten-foot deep channel or nine-foot operating draft on barges. As such – the Army Corps of Engineers expects new limitations on river traffic will go into place. With no relief in sight – it’s predicted the river gauge at Thebes will indicate an eight-foot depth come January 23rd. The Coast Guard has indicated traffic will remain open – but the Waterways Council and the American Waterways Operators have suggested that further limitations on barges would result in a de facto closure as commercial traffic grinds to a halt.

National Corn Growers Association Chairman Garry Niemeyer says the drought is certainly at the core of the current issues on the Mississippi River – but adds that the situation also highlights the need for infrastructure improvements. He notes NCGA has been pushing for lock and dam upgrades since 1993 – but the federal government has failed to respond. According to Niemeyer – we will lose valuable markets if we continue to ignore our infrastructure.

SOURCE: NAFB News Service