GRASSLEY: Last night, I sent a letter to Senator Barbara Boxer and also Senator John Kerry about global warming legislation that was recently relied as a bill that they put in. As you have heard me say several times on this program, I'm opposed to the United States moving unilaterally on legislation outside a fair and equitable international agreement.
However, if the Senate Democrat majority is determined to move forward on a unilateral climate change legislation, it should at least share the economic burden equitably across all states and regions of the country.
Many people understand, and the Congressional Budget Office has now confirmed, that a cap-and-trade system will result in higher electricity costs to alleviate this tax on consumers. The current proposal involves giving away from free emission allowances so utilities don't have to buy them.
But rather than allocate allowances based on need, both the House-passed Waxman-Markey bill and the Boxer-Kerry bill use a strange formula. Under this formula, the West Coast and the East Coast make out like bandits while the Midwest, who need relatively more allowances, will actually get less. That is, in effect, a transfer of wealth to the East and West Coast at the expense of other regions like the Midwest, which would already shoulder an unfair burden.
It's clear that this highly questionable policy must be changed for the sake of fairness and credibility with this legislation.
Dan at Successful Farming?
QUESTION: Good morning, Senator.
Do you think there's any likelihood that this bill will pass this year? I guess most people I've talked to think that if anything happens, it would be passed out of Senator Boxer's committee but that would be about it.
GRASSLEY: I believe you're right. And I think I would say that because of a couple other issues and maybe only one other issue -- health care reform. But, also, there's some talk about regulatory -- financial regulatory reform. So that would also be another one that's moving a little faster than global warming.
So I think you're right.
Tom Rider?
QUESTION: Senator, good morning.
What type of cap-and-trade assurances would have to be in the Boxer-Kerry bill to help agriculture before you would support it?
GRASSLEY: I think adequate -- let's see -- the word I'm looking for.
Let me start over again. Adequate recognition of what agriculture has already done through minimum tillage and no tillage compared to the practices of the hundred years before that of clean-till farming.
So we're already doing a lot in agriculture that has cut down on global warming, and we ought to give farmers credit for that.
QUESTION: Is there a financial figure that would offset enough the expected cost of that that would help them?
GRASSLEY: Well, I don't have a figure in mind, but I'm sure there's some studies out there that would indicate that, and I'd go by those studies.
Tom Steever?
QUESTION: No questions, this morning, Senator.
GRASSLEY: Ken Root?
QUESTION: Senator, could you comment on Secretary Vilsack and others of the administration attempting to working with China to make trade with China more equal between the U.S. and China? Do you think that they are over there for the right reason?
GRASSLEY: Well, if it's entirely a trade issue -- and that's the way your question put it -- I would say amen to everything that they're trying to do because we ought to be expanding opportunities for trade with China. But the main thing is to make sure that they abide by their WTO responsibilities that now, for ten years, they've been a part of WTO. And they want to be declared a market economy, government's involvement over there questions the market economy status at this point.
And I would say that, number one, China ought to reopen its markets to U.S. pork based on the proposition that they shut it because of what they call swine flu, H1N1. And science has made it clear -- in fact, an international scientific organization has made it clear that our meat is safe. Our pork is safe regardless of the term "swine flu."
QUESTION: Thank you.
GRASSLEY: Chris Clayton?
QUESTION: Senator, can we get a copy of that letter you sent to Boxer?
GRASSLEY: We'll get it to you, yes.
QUESTION: On another matter, you didn't mention anything about taxes, and it seems that there's going to need to be some sort of taxed extender bill or something before the end of the year. Is Senate Finance working on any kind of package?
GRASSLEY: Well, at this point, there's been some discussion at the staff level, but there's been no directions given by me to Republicans and, quite frankly, there's not much point in my giving directions until we find out what Senator Baucus wants to do, chairman of the Finance Committee.
But it's pretty clear to me that something's going to have to be done on extenders and, also, on estate tax because, you know, particularly -- and it will probably be driven more by estate tax than a reauthorization of extenders.
And estate taxes, in a situation where I think most farmers know, that December 31st of this year, we don't have an estate tax for 2010. And then December 31, 2010, we go back to a million exemption instead of the three and a half million where we are right now.
As much as I would like to see estate tax done away with totally, I'm not in support of doing it just for one year and then possibly having that million dollar level. That would be the worst thing.
So I support a $5 million exemption, 35 percent marginal tax rate, and would expect that we would have some debate on some level of exemption -- probably nothing lower than the three and a half that we have right now -- but, hopefully, get a little higher and a little lower tax rate than the 45 percent we have right now and that we would pass that as permanent legislation.
I've heard some talk that Democrats want to just pass the three and a half million, extend it for one year, and then next year, with a more comprehensive tax bill, work something out on estate tax. But I think those of us that want $5 million instead of the $3.5 million would lose a lot of leverage if we do it their way.
But I have had no discussions on it with Senator Baucus at this point. Today, at five o'clock, we do have our weekly meeting on the agenda for the Senate Finance Committee. It may come up, but I don't know.
QUESTION: And some other just kind of key issues like Section 179 and bonus depreciation, those just really have not been touched upon?
GRASSLEY: Well, I think bonus depreciation might have another reason for being passed. We don't -- that's kind -- that sort of things is tied up with stimulus, and as long as there's still high unemployment, there may be an effort to pass bonus depreciation and expensing and things of that nature separate from the issue of extenders generally.
QUESTION: Thank you.
GRASSLEY: Stacia, National Farm Broadcasters?
Gary at Arkansas?
QUESTION: Yes, Senator.
There's some cross-talk back there.
GRASSLEY: Yes, I hear it. It's not in my studio.
QUESTION: OK. Well, I wish they'd close their phone.
I want to get back to the China issue. A USTR official said the other say what the Obama administration wants to do is address with China the causes for surges of sales of their goods here in order to avoid a duplication of the tire tariffs that were ordered.
Do you think working with China to address the reason for surges, is that a worthwhile goal?
GRASSLEY: I believe that surges generally is something that WTO contemplates and that you want to avoid surges. And if there are surges, there is retaliatory action that different countries can take.
And, Gary, I need to back up and ask you if your question is a follow-on of Ken Root's that that's what the secretary of agriculture is doing over there, or is it a separate question entirely, Gary?
QUESTION: Well, I guess it's a separate question entirely.
GRASSLEY: OK.
QUESTION: I just wanted you to comment on whether you think it's worthwhile working with China to address the causes of surges instead of just relying upon, you know, safeguards to prevent -- to block them.
GRASSLEY: Well, you may have to have dialogue with me on this. I'm assuming that you're talking about China taking action to prevent surges. Is that right? If that's what you're talking about, yes, we should be dealing with that issue because that's the root of the question, whereas retaliatory action isn't necessary if you avoid surges.
QUESTION: Yes, that was what I was asking.
GRASSLEY: Yes.
QUESTION: If we can -- I believe what the official said what he wants to looking at what Chinese policy causes are behind the surges.
GRASSLEY: Well, I think it's nice that we're raising those questions. It's pretty much a Chinese problem. And if they recognize that that problem is something that upsets international trade and causes inflict with countries they're exporting to, it seems to me, in the spirit of WTO, that they ought to be looking inward and trying to stop those sort of things from happening.
QUESTION: OK. Thank you.
GRASSLEY: Yes. Philip Brasher?
OK. Anybody else? I've gone through the entire list. Anybody else want to jump in?
QUESTION: Senator, this is Dan at Spencer.
GRASSLEY: I'm sorry I missed you. Go ahead, Dan.
QUESTION: Senator, I wanted to ask you, Secretary Vilsack talked about the possibility of money available for the pork industry and made a comment that there wasn't as much -- there wasn't going to be as much money available in this new year as previously thought, and he mentioned congressional action -- something to do with Section 32.
Can you clarify that for us.
GRASSLEY: Well, I think Section 32 makes money available for the purchase of meat, and the extent to which more purchase of meat for two purposes. One, to help because hog prices are low, and the second reason is the government is a storer of commodities. And the extent to which government can purchase money at a low price, it's going to -- it's going to make a better use of the taxpayers' dollars by buying at that time than when prices are high.
And one of the problems that we have right now is on Section 32, we put a cap on Section 32 in the Farm Bill so that there's not as much available this year. And I think what their reference is that they're talking about changing it, particularly, as it relates to nutrition programs.
OK. Anybody else.
QUESTION: Senator?
GRASSLEY: Go ahead.
QUESTION: This is Philip Brasher. I couldn't get my phone off of mute earlier.
Senator Boxer released details on her climate bill and is holding hearing this week in EPW. What's your latest prognosis for that -- for climate legislation moving in the Senate. I don't know if you have any thoughts on -- if your staff's been able to analyze what they've put out, but...
GRASSLEY: No, we don't have it entirely analyzed except we -- the contents of the letter I referred to in my opening statement to Boxer and Kerry bring up the issue of wealth transfer from the Midwest and Southeast to the West Coast and the East Coast and the extent to which I bring up in my letter that we have to have a more fair use of -- a more fair use of the credits or whatever they want to do if we're going to do that.
And then I also brought up -- well, no. I mean, let me now answer I think your specific question; that is that I believe, with health care reform and possibly financial regulatory reform, that there's little time this year for cap-and-trade legislation. But it could be possible that they might want to get bill out of committee in that regard.
And then there are some reasons why the Senate bill is worse than the House bill because we've got higher reduction targets which are going to be different and very difficult and costly for business to obtain. And then given the authority to oversee offsets to the president and some sort of an independent body that is not the U.S. Department of Agriculture, which is true of the House bill, would make it worse for farmers.
QUESTION: What are the prospects of this bill next year? Do you think that something will wind up passing next year?
GRASSLEY: Well, don't you -- I'd have to -- it would be easier for me to answer your question after Copenhagen, but I think that something that's -- well, that's one point. And the second point would be this: That what's difficult in a non-election year, if it's really controversial, is possibly a little more difficult in an election year.
But it's pretty difficult for me to predict what might happen next year versus this year.
OK. Anybody else?
QUESTION: Senator, this is Dan Looker again.
I wondered if you think that having Senator Blanche Lincoln heading up the Ag Committee increases the odds or decreases the odds of getting more concessions from Senator Boxer on agricultural interests in the climate bill.
GRASSLEY: Well, I know that Senator Harkin at one time was talking about at least preserving everything that Peterson accomplished and maybe even doing more. And I wouldn't think she would be less of an opinion -- I mean, less stringent than what Senator Harkin is and could maybe, being that she's directly from agriculture herself, may have a little stronger views than Senator Harkin does on it.
But I don't -- but I don't know -- I can only say that partly because she's up for election and partly because she's expressed some skepticism on tax and trade to begin with that she might have a little stronger views than even Senator Harkin has.
QUESTION: Ah. OK. Has she put out anything on the committee on more hearings or anything?
GRASSLEY: No.
QUESTION: OK.
GRASSLEY: But I expressed on this program maybe a month ago or so -- and I don't know whether it was since Senator Harkin gave up the chairmanship or not -- but I was expressing a point of view that there was some indication there might not be any action by the Agriculture Committee at all. And I expressed a view on this program that I thought that was wrong that Agriculture Committee and the Senate ought to take a stand on it.
QUESTION: And so far, I've she's just talked about holding more hearings. I'm not sure about a markup.
GRASSLEY: Yes. Well , at least the hearings -- well, Senator Harkin had some hearings, so that would be a continuation of that, I think.
QUESTION: Right. OK. Well, thank you.
GRASSLEY: OK. Anybody else want to jump in?
QUESTION: Senator, Tom Rider at WNAX again.
Earlier Taiwan had seemed to indicate they would be accepting in boneless U.S. products. Now, there's some reports out that possibly they won't. Have you heard anything on that?
GRASSLEY: Well, the last I heard from Taiwan was positive on pork, and I don't remember on beef. But within the last two weeks, I got some indication directly from the embassy to my staff that they were going to be announcing something on pork right away.
And so I don't know about -- I thought the boneless beef thing was taken care of. So I believe that the situation with Taiwan is that they have accepted beef 30 months or not.
OK. Thank you all very much.
END