GRASSLEY: Yesterday, I had the opportunity to address the National Farmers Union at their Washington convention. This group has made renewable fuels a very top priority for them, I say, rightly so. President Obama has made it a centerpiece of his economic recovery. And lessening our dependence on foreign sources of oil is also an item that's near the top of Congress' agenda.
I'm very encouraged and I'd have to say, quite frankly, a little surprised to hear that Speaker Pelosi is in support of a higher blend of ethanol and gasoline. It wasn't too long ago that those of us in the Midwest had to educate representatives living on both the East Coast and the Left Coast about how to pronounce ethanol.
The news that Speaker Pelosi supports a higher blend of ethanol came on the same day that the good news came out of Iowa. This good news involves the Iowa Power Fund for finalizing a contract with POET to develop commercial-scale cellulosic sale of an ethanol plant in Iowa. And that's scheduled to begin production in 2011.
We all know that we have to continue to pursue policies that spur research, development, and production of cellulosic biofuels produced from biomass like switch grass, corn stover and wood waste because as long as there are organizations out there blaming ethanol for all their woes, we stand to lose some of the momentum we've gained to develop and grow alternative fuels.
In the next couple of months, we'll be working on a tax portion on the new energy bill. At that time, I'm going to be looking to forward and promote green renewable energy policy that continues opportunities for American farmers to help lessen our dependence upon foreign oil.
Michelle at Yankton?
Tom Steever at Brownfield?
Ken Root?
QUESTION: Senator, good morning. I'm the only one here, it appears, huh?
GRASSLEY: Well, you work for a very important radio station that Iowa depends on. So you, obviously, have to be on the job or all Iowa is going to fall apart.
QUESTION: Well, that will turn into a promo for us.
Well, let me ask you a question about Farmers Union to begin with. You're a Republican. That organization has been very much skewed toward the Democratic side, but yet they brought you in as a speaker. Do you see a change that they are, in effect, truly now working to be a mainstream farm organization?
GRASSLEY: I think Farmers Union is always doing a good job of expressing grass roots opinion to the Congress, probably, talking to me is, at least, on their trips to Washington, talking to me as much as Farm Bureau people are.
I think that they have renewed momentum not because that they're trying to be bipartisan in a particular way. I don't think they -- I think they've tended to work more closely with Democrats, but I'd never accuse them of being anti-Republican.
I think that they're taking advantage of a political environment here in Washington that's going to be more attuned to what they want to accomplish. Now, I don't see that as all bad because it's a fact of life that, at least, for the next four years, we've got a Democrat president. We'll probably have a Democrat Congress for the next four years.
So I behooved them yesterday that since they are going to have a seat at the table with a lot of things other than agriculture because they work closely with labor unions and environmental groups and consumer protection groups and nutrition groups, et cetera, et cetera. They have a seat at the table. And I advised them yesterday to use that seat at the table to educate they town and, particularly, the bureaucracy about some of the things that this town is espousing that are either anti-farmer or ignorance of American agriculture.
And there's three things that I particularly pointed out as examples of where they need to use their seat at the table to bring some reality to policies that are espoused here in Washington that are harmful to agriculture. And it's a process of educating about agriculture. One would be the fugitive dust issue.
I told them, you know, God controls the wind but I think that these bureaucrats think that Chuck Grassley can decide when the wind is going to blow and whether to keep the dust within my property line.
Number two is the cow poop issue; $175 dollars per dairy cow. Run every dairy cow -- or every dairy farmer out of business.
And number three is this whole issue of ethanol and the value of ethanol and the indirect land cost that EPA's considering that's going to make ethanol no longer a green substance because, you know, indirect land cost is -- presumably, Iowa has some control over a farmer in Brazil deciding to plow up more ground.
EPA bureaucrats consider that an issue -- putting carbon in the air having an impact on ethanol because Iowa farmers decide to make ethanol out of corn instead of just feed it. And we don't have any control over it, but people in this town and EPA think they do.
So I hope the Farmers Union will -- at the table because we Republicans won't be at the table. Probably, the Farm Bureau won't be at that table.
So speaking for farmers, Farmers Union has a big job to educate people in this town. And I, you know, just stressed to them yesterday the necessity of doing that.
QUESTION: Thank you.
GRASSLEY: Dan Skelton?
QUESTION: Good morning, Senator.
There's a headline in the Washington Post this morning saying the Obama administration plans to take a tougher stance on trade. Ron Kirk, the trade designee, said essentially the same thing.
Do you, first of all, support Ron Kirk's nomination to be trade representative? Secondly, do you support that harder stance?
GRASSLEY: I might vote against him but only because of the tax -- his failure to pay tax. And I've consistently voted against that. And his situation is probably not as serious as others.
On policy, I think he probably will be a good trade representative. When I think they take a stronger stand on trade, I think it's enforcement of existing trade laws and sanctions and countervailing duties and things of that nature; our enforcement mechanism, as opposed to negotiations.
Now, I would say I'm not sure in my own mind exactly where they are on negotiations. But on trade enforcement, I think they are going to take a tougher stand, and I wouldn't be entirely opposed to their taking a tougher stand because I think that one of the things that have brought about protectionism among American people lately is because they think that our government hasn't been doing enough to make sure that the level playing field for American workers and farmers is, in fact, level because countries tend to take advantage of us.
QUESTION: If I could follow up on that, the specific trade accord, NAFTA, during the campaign, President Obama promised to take a second look at NAFTA. Do you see this enforcement provision, tougher enforcement of existing being a substitute for opening up the trade agreement?
And is there anything that comes to mind that would require tougher enforcement?
GRASSLEY: Not particularly in NAFTA that I can think of. But I think that you've got to look at these as maybe two separate issues; tougher enforcement of trade generally and what will happen with NAFTA.
I think we're in a situation where the president realizes he's overspoke on NAFTA. I don't think he's going to force the issue. But I'm trying to force it with him. If you'll refer to the letter that I sent out last week to him saying that he was advocating renegotiation, I wasn't advocating it. But whatever he's going to do, he ought to be transparent and tell us what he's going to do because the sooner we get it laid out, the better if he's going to do something.
And, of course, implicit in that is I hope he's not going to do anything in that area. But if he is, we ought to get it out and get it discussed and get it on the line. And he might be finding out, if you open that up, that Mexico is going to take some action against us, probably, putting some tariffs on our agriculture products going into Mexico that I think the president will soon back down and not pursue anything new on NAFTA. And we're all better off.
QUESTION: Thank you, Senator.
GRASSLEY: Stacia?
Gary Digiuseppe?
QUESTION: Senator, is it time to bring back Chapter 12 of the Federal Bankruptcy Code yet?
GRASSLEY: Chapter -- well -- oh, your question is how close is agriculture to bankruptcy?
QUESTION: My question is whether we should bring back the bankruptcy chapter that Dr. Harrell (ph) penned in the '80s to protect farm.
GRASSLEY: Well, now, wait a minute. I don't have my bankruptcy staff here with me, but I think we made Chapter 12 permanent. We did make it permanent. So it's all on the books. So we don't have to reenact it like I promoted in the 1980's.
QUESTION: All right.
GRASSLEY: Yes.
QUESTION: The reason I asked was a number of senators sent a letter to Secretaries Vilsack and Geithner recently asking that those banks that have received assistance be required to consider leniency toward bankrupt farms and homes -- the homes that are owned by farmers, farmsteads.
Is there a need for that?
GRASSLEY: You know, I've been asked by one constituent and only one constituent so far to write to the secretary of agriculture on the same basis. But I think that I'm going to reserve judgment on that for quite a while because I think you could have a negative impact upon farmer lending and maybe raise interest rates on farmers. And that isn't something we want to do in a recession.
QUESTION: It seemed as though the letter was particularly targeted toward homes. They noted them as sometimes being used as collateral on farms and, also, as the place of business for farmers. Do we have a situation where a guy's farm is perfectly well protected but he might lose his home and that's what this letter is about?
GRASSLEY: I don't know that to be the case. And I'd have to say that, thus far, I've never heard of any instances of that in Iowa. And I would think that, in those particular instances, we'd want to use the same foreclosure provisions for housing that are on a farm, assuming that they're financed separately from the farm, use the same provisions we would for foreclosure in that same house if it were in a city.
QUESTION: OK. Thanks.
GRASSLEY: Jean at Agrinews?
QUESTION: Senator Grassley, you mentioned in your opening statement -- you were talking about increasing the ethanol blend in gasoline. Do you see that happening soon? And is that going to be something that the EPA will do?
GRASSLEY: Yes. EPA will increase the blend. And I don't know that they're inclined to increase the blend. And what you heard me say that I was quite surprised that Speaker Pelosi has advocated that because, just a few years ago, maybe two or three years ago, we had to explain that ethanol was ethanol and it wasn't ee-thanol and what it was all about and that sort of thing to people that were ignorant of ethanol on the East Coast and the West Coast.
QUESTION: Do you think that increasing the blend, will that come soon? You know, we're hearing more talking about that.
GRASSLEY: Well, I think it helps when people like Speaker Pelosi are coming forth. I've been fighting for it. I had been involved in meetings going back to July on this issue with Senator Thune and other senators.
QUESTION: Will there be a point at which you might take congressional action to do that?
GRASSLEY: I think there might be congressional action if EPA has not acted by the time we can't force -- we're producing more than the mandate and we have all the 10 percent mixes we can have and it's not being met, then Congress may take action. But I would hope that EPA would do it on their own.
QUESTION: Senator, can you clarify what percent Ms. Pelosi is endorsing?
GRASSLEY: Let me find out. What percent has Pelosi endorsed, do we know? 12 or 13 is what we think.
You know, right now, 11 would help. But most of us are speaking in terms of 15 to 20. Or I should say 15 or 20. It's not very clear. Let us see if we can get some more information for you.
We do have a statement that -- let's see -- I don't have a date on it, but it says "Pelosi back higher ethanol limits."
Well, no, this is March 9th. "House speaker Nancy Pelosi said Monday she supports a higher ethanol-to-gasoline blend rate as a way to reduce reliance upon foreign imports. It seems to me that we should be able to do that," end of quote. Pelosi told reporters after speaking to the National Farmers Union conventions. That's the same group I spoke to yesterday.
Anybody else have a question?
QUESTION: Yes, Senator. It's Philip Brasher.
GRASSLEY: Yes. Go ahead, Philip.
QUESTION: Agriculture Secretary Vilsack has been saying that farmers need to -- or could give up subsidies in exchange for carbon payment. He's been pushing this idea of carbon payments as a replacement for some subsidies as direct payments or something else.
What is your -- what is your feeling about carbon payments, the prospect of this? And as you know, farm groups are kind of split over whether the cap and trade system is a good idea in the first place because of the potential impact on energy prices.
What is your -- what do you think about the prospect of carbon payments replacing subsidies or being a substantial form of farm revenue?
GRASSLEY: There's nothing that indicates to me that it's going to be the safety net that is directly tied to the price of a product in a certain year. And I think that that's -- that's the farm safety net.
I think that cap and trade tax would fit better into the direct payment concept. And the direct payment concept is tied more closely to our exports than it is to anything doing with global warming. So I would be -- I'd have to study long and hard to come to the conclusion that it's either or.
Right now, I see cap and trade tax as kind of experimental. Don't know how it's going to work. We've got build support for it. And I would not see us -- see our trading any sort of LDP countercyclical and direct payments for that at this point.
QUESTION: What -- what would you advise farm groups to do? Should they get -- try to negotiate the best deal they can get? Or (inaudible) the Farm Bureau?
GRASSLEY: There's a good argument for exempting agriculture completely. The other argument is that certain farming practices are a factor in keeping carbon down, you know, minimum tillage, no tillage, et cetera. And farmers ought to be given credit for that if it were applicable.
GRASSLEY: But, you know, I need to back up one step, and it's a pretty big step. But I've -- I think we're going to have a global warming bill. But I'm an advocate for doing this at the international level because I think the United States is going to get stuck with trying to clean up CO2 when China is the biggest polluter. And if we don't do something about China on this, what do we accomplish in the United States other than the United States, quote/unquote, "showing leadership" and presumably making it easier for us to negotiate something in the next year when we try to reach a final international agreement of which, right now, China's posture is, you know, we ought to be exempt for the next 30 years.
Well, they're putting on live coal fire plants, you know, one a week. And it's -- it's a serious misjustice to the United States entire economy if we're going to have the unfair competition from China. And so I think that we have to think in a broader perspective and how agriculture fits in to that broader perspective on a worldwide basis.
I mean, how can you -- you heard me talk about indirect land factor in EPA wanting to factor that into ethanol production. OK. They're willing to say that farmers in Brazil are plowing up because Iowa farmers are using their corn for ethanol. So they're willing to say that that's -- that ought to be taken into consideration there. Well, how do you go to a global warning meeting where you're still concerned about polluting and say that China can be exempt?
I mean, our own government is speaking out of both sides of its mouth.
QUESTION: OK. Well, in terms of the farmers -- the Farm Bureau, for example, has been saying that they see this as a -- basically, a negative for farmers. Higher energy costs are going to translate to increase in production costs and the benefits from carbon payments are iffy at best. It may benefit (inaudible). So they're certainly not getting board.
What do you think about the stance that they're taking versus -- the administration obviously wants to get farmers...
GRASSLEY: It's not just -- it's not just a farm. When you have cap and trade, you're having a tax on energy, and it's going to drive up everybody's costs. And it ought to be treated as a tax and what does it do to the economy, particularly, the globalized economy? That's what you've got to consider. You don't consider just the impact on agriculture.
OK. Anybody else?
QUESTION: Senator, Michelle Rook with WNAX. Sir, you probably called on me earlier.
GRASSLEY: Yes.
QUESTION: Commodity markets have been really following the stock market as it has gone lower here over the last couple of months. And a lot of people are saying that commodity prices probably won't improve until the stock market does. But there seem to be a real general distrust among the stock market of the Obama administration and what's being done to help stimulate the economy.
Do you think the Obama administration is doing a good job? Can we get some trust back into our financial markets?
GRASSLEY: I believe that they're trying hard and maybe some of the policies they put in place will work. But I think that they have sent signals through their verbiage that has disquieted the market and had more to do with driving the market down than the policies that they put forth.
Building up expectations for Geithner's announcement three weeks ago and then that bombing and other statements that have been made recently, it's just sending the wrong smalls. Or the effort to increase taxes on higher-income people, even though it's not going to happen until maybe 2011, according to their own announcement, just talking about higher taxes now and particularly higher taxes on capital gains is very destructive to the market.
They would be better off if they just kept their mouths shut and do what they want to do and not talk so much.
OK. Anybody else? OK. Thank you all very much.