Hello, I'm Dean Borg. Mark Pearson is off this week.
Americans live in a "petroleum economy" so when oil prices tip the psychologically "weighty" scale of more than $70 a barrel for several weeks in a row, it raises concerns about crude oil and gas supplies. By week's end, the price per barrel was over $77.
Record oil prices push up the price at the pump and will likely cut into the 70-cent an hour pay raise that more than one and a-half million minimum wage workers just received this week – up to $5.85 an hour.
The anticipation of higher wages though, hasn't translated into major spending. Sales of new and existing homes fell, due in part to rising mortgage rates. Worries over the state of mortgage and lending rates unnerved Wall Street where at one point near week's end, trading dropped more than 400 points.
However, the Gross Domestic Product, the broadest measure of economic activity, shows a nearly 3 1/2 percent increase in the April-to-June quarter over earlier in the year... due to stronger spending by businesses.
No matter the economic conditions, it is never a popular political move to talk about raising or adding taxes. And this week, tax issues were among the stumbling blocks as Congress debated the next farm bill.
At the beginning of the week, various members of Congress lined up to support the House Agriculture Committee's version of the 2007 Farm Bill...
Rep. Colin Peterson, D-Minnesota: "... maybe what we were trying to do was come up with a bill that made everybody equally unhappy and I think we've done a little better than that because we now have all the groups supporting this bill."
Rep. Bob Goodlatte, R-Virginia: " I am going to support this legislation even with the few objections I have.
By the end of the week, they were lining up to deride it.
Rep. Bob Goodlatte, R-Virginia: " ...and now we find what we're gonna do is put American jobs up against American farmers."
Democratic Congressman Ron Kind of Wisconsin, along with Republican Congressman Jeff Flake of Arizona, introduced an amendment reminiscent of the 1996 Farm Law. In the vein of the '96 FAIR Act, the bi-partisan measure gradually reduces farm subsidies to zero.
Secretary of Agriculture Mike Johanns said the House Agriculture Committee's version of the measure represented a missed opportunity for "real reform." Much of his objection centered on the farm safety-net.
- Johanns wants to limit subsidy payments to farmers earning $200,000 or less each year. The Agriculture Committee's plan sets the cap 5 times higher at $1 million.
- Johanns wants a revenue based payment program to be the only choice for eligible producers. The Committee's bill gives farmers a choice between counter-cyclical and revenue based programs.
-And Johanns objects to how the 5-year $286 billion package, of which $42 billion goes for agriculture, would be funded. Johanns pointed out his version will only be $4 billion in the red, does not require a tax increase, and fits within President Bush's plan to balance the budget within 5 years. According to Johanns, the Agriculture Committee's version, which earmarks a $4 billion for nutrition and food stamp programs, would be $36 billion over budget and requires a tax increase to pay for the overage.
Johanns assured lawmakers if the Agriculture Committee's version of the bill makes it to the White House, the President would veto the legislation.