GRASSLEY: Hello, everybody.
This week, our Agriculture Committee is going to have a hearing for several nominees and, this time, for the Commodity Futures Trading Organization, also, some other positions within the department of agriculture and, also, for the Farm Credit Administration.
I'm not going to be able to attend because of the health care markup, but I plan on submitting several questions for the nominees to answer. In the wake of an economic downturn and uncertainty of the markets, the Commodity Futures Trading Organization has become increasingly scrutinized whether or not they're doing their job.
I'm interested in learning for about ideas that they have to bring greater transparency and scrutiny, particularly, in energy and also in other commodities, particularly, agricultural commodities. I'll also be asking the nominees' thoughts on speculators in the oil markets because I think that's what drove oil up to more than $140 a year ago now.
Many of my own efforts in agricultural policy deal with the packers and stockyards program. So most of my questions to the president's nominee to be undersecretary of marketing and regulatory programs will revolve around greater enforcement of competition provisions of the Packers and Stockyards Act.
Lastly, I'm going to have questions for farm credit nominees about the role of the Farm Credit Administration in working with the farm credit system to ensure that farmers are able to get through an uncertain economy.
Just in case you wonder about not being at a hearing and getting questions in, you submit them in writing and you get answers back in writing from the nominees. I look forward to hearing their answers as the committee considers their nominations.
Go ahead, Chance.
STAFF: Dan Looker?
QUESTION: Good morning, Senator.
At the same hearing tomorrow, Senator Harkin will be handing the gavel to Senator Blanche Lincoln, and I wondered what your thoughts are about how the committee may change under her leadership.
GRASSLEY: I don't know that the committee will change a lot, but I do know this, that whereas Midwestern and Southern agriculture had some balance between Harkin from the Midwest and Chambliss from the South, we're going to have more dominance for rice and cotton than I think we've probably had for a long time.
And I think it harkens back to agricultural policies of the '60s and '70s where Southern agriculture totally dominated policy through the leadership of the committee chairman at that particular time.
QUESTION: Do you think that has -- just to follow up, do you think that has any implications for enforcement of payment limits?
GRASSLEY: I don't know whether it has problems with enforcement, but it's going to make it more difficult changing policy to get the $250,000 cap that I've always fought to get, and I always had Harkin -- Senator Harkin was always helping me on that.
STAFF: Tom Rider?
QUESTION: Good morning, Senator.
Senator, one of the cattle groups is concerned about the possible merger of JBS with Pilgrim's Pride in terms of controlling the protein market and driving down beef prices. I was wondering if you share those concerns and would also like to see that blocked.
GRASSLEY: Well, at this point, I have not made up my mind to write about JBS buying the company, but -- and so maybe I will write a letter. I haven't made my analysis of that yet like I did in the case of the previous JBS efforts.
But, obviously, the extent to which you're talking about protein and food consumption and things of that nature, I would look at it more about what would be the impact on market generally rather than food consumption.
STAFF: Gene Lucht?
QUESTION: No questions.
STAFF: Julie Harker?
QUESTION: Yes. Good morning, Senator.
Yesterday, you said that cap-and-trade climate change legislation is dead for this year. Why is that? And is it fatally wounded, or do you see it coming back in 2010?
GRASSLEY: I was also asked yesterday whether or not the Boxer bill was going to be introduced, and I didn't have any information on that yesterday. But today, it's been publicized that tomorrow the bill is going to be put in, and there will be some markup in the Boxer committee in early October.
I've also heard that there would not be markup in Energy or Agriculture for their provisions. And I think it's very, very important that the Agriculture Committee participate in markup because if there's any segment of the American economy outside of utilities that could be hurt by a cap-and-trade bill, it would be American agriculture.
And I think, from what I've heard so far, that agriculture is not getting adequate pressure or adequate consideration for things that they've already done to capture carbon through just one example, no-till farming. And things of -- and then the use of agriculture energy being a big factor in agriculture production.
We need to have the Agriculture Committee take a look at cap-and-trade legislation. And I've heard that might not be consideration by the committee; that there will be just suggestion -- changes in language. But I think we need to make sure that agriculture has one voice on this cap-and-trade legislation.
And, anyway, there's going to be a bill in, and there's going to be markup.
Now, getting back to your question, I don't expect it to come up on the floor today, but I'm not going to go beyond Christmas in predicting what might happen.
STAFF: Ken Root?
QUESTION: Senator, good morning.
I know you were at the event way at the Iowa Soybean and Corn meeting with the Taiwanese. I wonder if you would connect the dots for me on how you see that our policies on trade going both ways bring greater stability to the world.
GRASSLEY: Well, it's too bad you weren't there. You would have heard it all yesterday.
QUESTION: Well...
GRASSLEY: Now, don't get defensive, that's a joke.
QUESTION: Oh, yesterday was too long to use.
GRASSLEY: Well, listen. Here's the way I look at a signing ceremonial like the Taiwanese coming.
It looks like it -- America expects the United States just to take and take and take and never give. So I use an opportunity like that to explain that we in America know that trade is a two-way street and we know that we welcome opportunities like with Taiwan yesterday to sell, but also we know that not only for egalitarian reasons but for reasons that benefit the American consumer, we need to be open to imports from other countries and be seen as a welcoming importer as well as a thankful exporter.
And beyond -- we always talk about trade always in economic terms. So I had an opportunity to express yesterday that whereas we, in politics, like senators and congressmen or our diplomats or our president, think that a peaceful world is just the domain of politic leaders or diplomats.
Our efforts are kind of a spit in the ocean compared to what went on yesterday and goes on in millions of environs around the world every day when business people from Country X sit down about business people from Country Y and make business deals. What those commercial entrepreneurs are doing is they're enhancing many times over, millions of times over, what diplomats do, political understanding and breaking down barriers to understanding.
And by doing that, I think trade is very, very essential of international peace. In other words, what individual entrepreneurs, millions every day, do makes the efforts of diplomats kind of small potatoes. Then one additional thing that trade is very, very important for expanding the world economic pie. We have 6 billion people today. In 56 years, we're going to have 9 billion people.
And if you don't expand the world global economic pie, you're going to have less for more people. If you want more for more people -- and the more people are a certainty -- you're going to have to build the world's economy. And that international trade is one of the most important levers to accomplish that.
And with that comes social cohesion. In other words, people are basically just nine meals away from a revolution. In other words, if you -- if your kids didn't eat for three days, wouldn't you take extraordinary action to make sure that they got food?
So I think that it's very, very important. And examples of what we ought to be doing as a nation right now to make sure that this happens and to show the rest of the world that we're serious about using trade as a tool of peace and as a tool for expanding the global economy, we ought to be dealing with Panama, Colombia, and South Korea right now -- three issues that are very hot right here in America.
But it isn't being done because protectionists are standing in the way, and in the process of standing in the way, what are they doing? They're hurting the American consumer, and they are diminishing the opportunity to expand the world economic pie.
QUESTION: Thank you, Senator.
STAFF: Troy, KICD?
Chris Clayton?
QUESTION: Senator, just kind of following up on the question with Julie Harker. You said you won't go beyond Christmas meaning you think there won’t be a bill until after the holidays or what?
GRASSLEY: No, I think that if you took three issues before Congress right now -- health care, cap-and-trade, and banking reform -- banking regulation reform -- you'd find cap-and-trade would be the most controversial to get passed and more so in an election year.
QUESTION: More so than health care?
GRASSLEY: Yes, I think so.
QUESTION: A separate question.
What's happening with debate around the estate tax? Is anything going to be move for the tax in some sense in 2010?
GRASSLEY: Well, it has to because I don't think Congress is going to want the ridiculous situation of having no estate tax in 2010 and then a million-dollar exemption in 2011 and into the future. So I think it's going to call for a bill before the end of the year, and I would say if you want to put it -- the worst possibility and the best possibility.
The worst would be making permanent laws -- it is, right now, a three and a half million exemption and 45 percent tax. And the best that we might be able to get done between now is based on a test vote that we had on the budget resolution back in March when we had 52 votes for a $5 million exemption multiplied twice and indexing and a 35 percent tax rate.
So if we had 52 votes then and those 52 votes stick together, it seems to me that we've got a chance of doing a lot better than where we are right now and probably the best we will be able to do for the next decade.
STAFF: Gary, ARN?
OK. I've read through the entire list. Does anybody have a follow-up or get added late?
QUESTION: This is Philip Brasher.
Senator, following up on the cap-and-trade, if, as you say, this cap-and-trade is the more -- is more controversial than health care, and if this doesn't get done until next year, an election year, what -- how can Democrats possibly get this passed in this Congress? Or how can they get it passed next year?
GRASSLEY: Well, I think it's very difficult. And I don't have a handle on exactly. I may sound like I know absolutely that it isn't going to come up next year. I think it's absolute it can't come up this year on the floor at least.
So I don't know about next year. But it just seems to me that the push for cap-and-trade has slowed down very dramatically since the House passed it on the Friday before the July 4th break. And it has really surfaced as being something that people understand and they don't like, and that point of view is getting through to Congress.
So I might suggest that the effort to push it through so fast in the House of Representatives may have done some harm to the possibility of getting cap-and-trade passed.
QUESTION: Hmm. How does -- Blanche Lincoln, obviously, up for reelection next year. How does that play into the -- what the Ag Committee does and how the prospects of this bill look?
GRASSLEY: Well, I hope you were on here when I said that the Agriculture Committee ought to take some objection.
QUESTION: Right. Uh-huh.
GRASSLEY: I would say that she's got a very good reputation of being very practical. And I would think that, with her leadership -- not any more so than Harkin's because I know that he had taken strong positions on making sure that agriculture's point of view was going to be heard and even improved over what Peterson got done in the House.
So I'm not saying that she would do more than what he would do, but I think her practical approach and her new leadership that she would want to be making sure she's got her handprint on this piece of legislation.
STAFF: OK. Anyone else?
GRASSLEY: OK. Goodbye, everybody.