The first six months into the transition for any new administration, there is a flurry of activity to oversee. Dozens upon dozens of Presidential Executive Orders are typically issued to modify or reverse what the preceding administration put in place and to push their agenda as quickly as possible without congressional approval.
Getting the political appointees in place to provide the leadership in the agencies across the government is a slow process because of very lengthy security clearance background checks and review and approval of the nominees by the Senate. Until the political appointees are in place, the career staff are loath to make critical regulatory or policy decisions. The president has to push his big agenda items early and hard for congressional consideration, negotiation and approval.
Of course, all of this is shrouded in the politics of the 2022 elections. With a 50-50 Republican-Democrat split in the Senate, there is no margin for error. There is only a four-vote margin in the House and new congressional districts are being drawn this fall, adding even more dynamics in forging legislation. The president faces one or both of the chambers shifting to Republican control, dramatically limiting his agenda for the last two years of his term. Thus, the President must move as quickly as possible on his key priorities such as infrastructure, taxes, climate and various other social issues. The political theater over the next few months will be equivalent to a roller coaster ride.
Taxes: During this period, we see many threats to the status quo on taxes. The debate over infrastructure funding brings welcome and long overdue attention to roads, bridges, waterways and rural broadband but introduced potential tax threats with respect to stepped-up-basis, capital gains taxes, and changes to 1031 like-kind exchange taxes as a means to pay for the infrastructure investments. All of agriculture rallied together quickly to make it clear the devastation such proposals would bring on passing on the family farm. Clearly your concerns have been heard and we shall see how they are eventually heeded.
Waters of the U.S. (WOTUS): On June 9, the EPA and Army Corp of Engineers announced their intent to revise the definition of “waters of the United States.” EPA and the Army notes that under the current rule put in place by the Trump Administration they have “determined that this rule is leading to significant environmental degradation.” This is a major concern for all of agriculture, and we will be working with the broad farm coalition to provide input.
Trade: As of early July, the Biden administration had not yet announced their nominee for the Agriculture Ambassador who is the lead negotiator in the office of the U.S. Trade Representative. This is a critically important position for American agriculture. On June 30, the Trade Promotion Authority expired, which essentially halts negotiations on pending trade agreements (United Kingdom, Kenya, Japan and European Union) by the Biden Administration until Congress passes it again. The Administration has given no indication when it will seek to have Congress renew TPA. The World Trade Organization, which is in great need of reform, has a Ministerial meeting scheduled for the first week of December in Geneva, Switzerland. The WTO has been mired in a quagmire of dysfunction for several years and we must be vigilant on what reforms may be considered that could have a direct impact on our sugar policy.
Sugar Policy: Our traditional policy opponents have drafted a bill and are seeking cosponsors that would essentially gut U.S. sugar policy. The bill would drop the loan rate by a cent per pound, increase imports, continuously oversupply the market and keep prices depressed. A similar bill was rejected by the House by a 141-vote margin in the 2018 farm bill and not allowed to be considered in the Senate at that time. However, there are many new members of Congress so we must constantly educate them as to why the U.S. sugar industry is critically important and is designed to support farmers, keep the market adequately supplied and operate at no cost to taxpayers. Given the experience of supply chain disruptions in various industries during the COVID-19 pandemic, the last thing Congress should be giving any time or attention to are proposals that would undermine domestic producers, put good rural jobs in jeopardy and increase dependence on unreliable foreign suppliers.
Initial work on the next farm bill is already underway by your industry leaders. They look what the needs of growers are and see if current policy is meeting those needs. Farm policy cannot solve all problems, but it is the epicenter of what helps us survive and care for the nation’s sweetener needs. Once again we thank your grower leaders for the time and effort they put forth on your behalf to chart the course for our industry.
Luther Markwart has been the executive vice president of the American Sugarbeet Growers Association since 1982. Luther can be reached at email@example.com.