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Skeptical Senators Tangle with Obama Administration

posted on July 24, 2009

Hello, I'm Mark Pearson. According to many economists, the U.S. may be in the recovery stage from the longest recession since World War II. Those same economists caution the road is not a short one and grim statistics will mask signs of improvement.

An affirmation the recession is losing steam was seen in the most recent Conference Board report. For the third month in a row, seven of ten indicators made it into positive territory pushing the Index higher.

One of those indicators -- unemployment claims -- helped give the Index a boost despite a record 9.5 percent unemployment rate. According to the Labor Department, the fewest number of jobless claims were filed this week since the beginning of the year.

And in the face of petroleum analysts saying oil prices should be on the decline, the value of a barrel of oil hovers above $65.

These elements helped drive the Dow Jones Industrial Average up 200 points this week to finish over the 9000 mark for the first time since January.

And Friday marked the final increase of the minimum wage for most U.S. hourly employees. The 70-cent hike moves the bar from $6.55 per hour to $7.25 per hour - an amount set during stronger economic times

As the economy shows signs of recovery, thoughts turn to the creation of new jobs. If the Obama Administration has its way, one of those job generators will be an environmental cap-and-trade law. One version of the controversial measure passed through the House last month and members of the Senate Agriculture Committee set to work on their edition of the bill.

Skeptical Senators Tangle with Obama Administration

Sen. Tom Harkin, D-Iowa: "I know the President wants something out of Congress before the Copenhagen meetings in December and we will do our darnedest to try to meet that deadline and the goal of the President is to get something done."

While much of Washington was knee-deep in health care talks this week, members of the Senate Agriculture Committee still found time to debate the affects of cap-and-trade legislation on American agriculture. Senators spent much of the day-long hearings at odds with USDA Secretary Tom Vilsack and EPA Administrator Lisa Jackson.

Sen. Mike Johanns, R-Nebraska: "What's going out of production? Because the important thing about that is that affects the pork producer, the cattle guy and it beats the living daylights out of them."

Some Senators raised concern the lack of support from industrialized nations like India and China could render a U.S. cap-and-trade measure "useless." Vilsack and Jackson disputed those claims.

Sec. Tom Vilsack, USDA: "In visiting with international leaders, with foreign leaders, with dignitaries on this issue...I got the sense that they are waiting for the United States. They wanted to see action they wanted to see leadership from the United States. My view of this is that the world is waiting for us. I really expect them to be participating in some form or another."

Sen. Saxby Chambliss, R-Georgia: "But the fact is Mr. Secretary this week they have told Secretary Clinton ‘we can do whatever we want to'."

Lisa Jackson, EPA Administrator: "I recognize that we need others to join but I'll tell you here that we don't have to do it all at the same time."

Sen. Mike Johanns, R-Nebraska: "Here's the problem... poor Tom Vilsack has to go out there with that testimony and try to convince farmers on a hope and a prayer that somehow this is going to work out."

Vilsack and Jackson told skeptical Senators that carbon offsets could dramatically alter the cost structure for farmers and ranchers. USDA analysis released this week claims farmers could earn an additional $75 to $100 million dollars in the coming years by practicing no-till agriculture, capturing methane gas, and planting trees.

Obama Administration officials said land owners could receive payments from a federal carbon offset program by planting trees on marginal lands which might cause a rise in commodity prices and boost farm income. But neither official offered precise predictions.

Lisa Jackson, EPA Administrator: "An offsets program that includes some incentives for forestation could have the impact of taking some acreage out of production and into forest production. But we do not have a number."

Johanns: "It is no consolation to stand with one foot in the campfire and one foot in the ice bucket and say on average I'm in good shape. It is no consolation to say to farmers and ranchers you are going to be in good shape on average if you don't know the regional differences, if you don't know the crop differences and you can't tell them how much land is going out of production. And yet we have a House bill that is passed and I find that shocking."

During the hearing, Senate Agriculture Chairman Tom Harkin also took issue with the long expected EPA ruling on higher ethanol blends. The Environmental Protection Agency and Department of Energy have extensively tested the affects of ethanol-to-gasoline blends above E10. Harkin, an Iowa Democrat and biofuels supporter, took issue with what he called "bias" at EPA.

Jackson did not directly refute or defend the claims of an EPA bias but did pledge to have an official ruling by early December. Harkin recently mentioned an E15 mandate could be applied to the Senate's version of the climate measure.

The full Senate is expected to take up cap-and-trade legislation in early September.


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