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A Look At Washington

The late political columnist Molly Ivins once described a Congressional recess as a time when villages across the U.S. recalled their idiots. Of course, it's generally other districts' and states' representatives, not your own, who fit the characterization, but Congress seems to hold little esteem among the citizenry these days. In fact, a May 10-13 Gallup Poll found just 29% of Americans approve

The late political columnist Molly Ivins once described a Congressional recess as a time when villages across the U.S. recalled their idiots. Of course, it's generally other districts' and states' representatives, not your own, who fit the characterization, but Congress seems to hold little esteem among the citizenry these days.

In fact, a May 10-13 Gallup Poll found just 29% of Americans approve of the way Congress is handling its job. That's down 4 percentage points from the previous month, and three from the 32% average measured during the first five months of the year.

Those statistics underscore the distaste many Americans share regarding the way the people's business is conducted in Washington these days.

“It's very mean-spirited and a major turnoff to a lot of people,” says economist Bill Helming, Olathe, KS. “All things considered, things are in reasonably good shape in this country, including our economy. But my biggest concern and our biggest challenge is there's way too much emphasis on ‘I’ and achieving power at any cost.”

Some folks, of course, would argue that partisanship is good. After all, a legislative body with the power to tax and spend serves the people best when in gridlock, they argue. Jay Truitt, National Cattlemen's Beef Association vice president of government affairs, isn't among them.

“The overall situation in Washington is a tough battlefield today. There are still a lot of bitter feelings over the 2006 election and a lot of things are taking a back seat,” he says. “Normally the farm bill would be the preeminent piece of legislation everyone would be talking about. But nothing can get in the front seat as long as the Iraq discussion is taking place. Even the issue of energy, which normally would be a fireball of discussion, isn't getting the attention it normally would.”

The result, Truitt says, is the upcoming farm bill likely will be developed without the scrutiny it normally attracts.

“I don't think that's good. I think it's best to have to defend what you're doing in public policy on a regular basis just so you get the chance to communicate about where you fit and what your value is to society,” he says.

A reduced media focus on the farm bill doesn't mean the going will be any easier for agriculture groups, however.

“There's just not enough money to do what everyone wants to do, which is different than the last farm bill,” Truitt says. “It will force all groups to stay pretty connected because there are going to be cuts in a lot of different places in order to satisfy all the parties at the table.”

He says three rails drive policy for the U.S. livestock industry today:

  • basic agricultural policy and trade,

  • industry structure and

  • environmental and animal rights activism.

Meanwhile, Helming sees the main battlegrounds as ethanol and its attendant effects on the livestock industry, market competition issues, and the environment.

New sheriffs in town

After more than a decade out of power, the Democratic Party recaptured both houses of Congress last November. The effect, however, has yet to fully manifest itself.

“Clearly we're in a new operating dynamic here in Washington,” Truitt says, “but it's always easier to go from the majority party to the minority than vice versa. Despite the fact there's a lot of experience on the Democrats' side, it's taken them a little longer than they likely expected to get up to speed as far as having their committees set up and running and in full order.”

As those committee structures get tested, it will provide an indicator of what next year will be like, he says. Still, with tough federal elections looming in 2008, Truitt says there will be aggressive pushes by candidates and parties to stake out political positions. One such area is in energy — bio-fuels specifically.

“We'll see some aggressive pushes to try to capture as high a mandate as possible this summer on ethanol as a percent of the total fuel market. I expect to see both the House and Senate in June move to double the renewable fuel standard from the 15 billion gals./year mandated by 2015 under the current law to as much as 36 billion gals. by 2022,” Truitt says. “Neither party can afford to alienate that constituency.”

Helming agrees. Of the ethanol-production incentive of 51¢/gal. (set to expire in 2010), and the 54¢/gal. tariff on imported ethanol that expires in 2012, he says the backbone doesn't exist in Washington to back off on support.

“Clearly, corn-based ethanol production has severe limits in terms of replacing fossil-fuel energy,” Helming says. “But at the end of the day, the political environment is such that Congress will choose to expand it.”

He's convinced the beef industry can and will adjust. “Frankly, I think it will create some opportunities for the beef industry though it has an obvious downside.”

Competition bills are another area of interest. Three bills are currently before Congress.

Rep. Leonard Boswell (D-IA), chairman of the House Agriculture Livestock Subcommittee, introduced the “Competitive and Fair Agricultural Markets Act of 2007.” And Sen. Tom Harkin (D-MO) introduced similar legislation in the Senate. Meanwhile, Senators Chuck Grassley (R-IA), fellow Republican Mike Enzi (WY) and Democrats Harkin and Byron Dorgan (ND) introduced legislation to ban packer ownership of livestock.

Neither Truitt nor Helming feel the motivation exists in Congress to legislate markets at this time.

“At the end of the day, I think the beef industry will be allowed to retain its flexibility and freedom to enter into private and negotiated supply and pricing agreements,” Helming says. “The cattle-feeding industry, as an example, left the Corn Belt largely because of that kind of thinking. You can neither legislate morality nor free markets — it's really that simple.”

Nor does either man expect movement on country-of-origin labeling (COOL) this year, which was passed in 2006 but its implementation delayed until September 2008. Some in Congress are pushing for a September 2007 implementation but Truitt says such lawmaker support doesn't exist.

Nor does support for bundling COOL with implementation of the National Animal Identification System (NAIS), as some have suggested. Truitt says an NAIS package couldn't pass either the House or Senate. COOL will be part of the farm-bill discussions, he says; NAIS will not.

In fact, trade in general is an area of optimism to both men.

“I don't see the U.S. going back to an isolationist country. It would be incredibly stupid and very negative for our economy. It won't happen,” Helming says.

Truitt adds that, with some modifications in trading authority, he expects broad-based political support for free trade to continue.

“With ‘handcuffs’ applied to trade negotiators in regard to labor and environmental components, it will free up the trading environment, especially in the democratic party,” Truitt says. “More immediately, I think the South Korea FTA will go through if the beef issue is fixed. The votes are there for that. If the beef issue isn't resolved, the Korea deal is dead.”

Both experts cite the environmental arena as an area of concern. Regardless of the makeup in the Washington political leadership, Helming says the livestock industry will face increasingly larger challenges — and costs — in the environmental arena.

“But by stepping outside the box and taking a whole new look at that situation, I believe there will be ways to turn this environmental focus into a plus for the industry,” he says.

The challenge, however, is yet to be painted by Congress.

Read the full State of the Industry report (.pdf)