Hello, I'm Mark Pearson. The federal government expects to borrow a record $188 billion this quarter—even more than it anticipated three months ago. This will add to the deficit, which is expected to reach $400 billion dollars. The Bush administration says much of the increased spending will go to rebuild the hurricane-damaged south. It's not just the government spending more money. Consumer spending in December outpaced income growth. *The Commerce Department said consumer spending rose by point-9 percent, double the rise in incomes. *To finance the higher spending, the department said Americans dipped further into their savings –- pushing savings to the lowest annual rate since the Great Depression. *And the Federal Reserve increased the interest rate for the 14th consecutive time. It was the final act for Alan Greenspan as Federal Reserve chairman. At 18 and a half years, Greenspan had the second-longest tenure as leader of the Fed. The new Federal Reserve chairman is Ben Bernanke -- who most recently was chairman of President Bush's Council of Economic Advisors. Economics played a large part in the President's State of the Union speech this week. While he spent a major portion of time on issues of war and the need for homeland security ... he eventually touched on several issues affecting agriculture.
President Bush: "Keeping America competitive requires affordable energy...America is addicted to oil, which is often imported from unstable parts of the world."
The President is calling for what many in farm country have asked for, for years --advances in renewable energy to reduce U.S. dependence on foreign oil. His plan includes ethanol. Bush allocated $150 million in the 2007 budget to make biofuels like cellulosic ethanol, a fuel made from agricultural waste products like wood chips, stalks or weeds.
President Bush: "Our goal is to make this new kind of ethanol practical and competitive within six years. Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025."
Bush also is pushing for a 22 percent increase in clean energy research at the Department of Energy. And, an increased investment in zero-emission coal-fired plants, solar and wind technologies and nuclear energy.
Also on the President's agenda was foreign policy and trade.
President Bush: "Keeping America competitive requires us to open more markets for all that Americans make and grow."
In his address, Bush called for open markets and a level playing field referring to the recent Doha Round of trade negotiations. While the U.S. still is the world's largest exporter of agricultural goods and currently enjoys an agricultural trade surplus, imports are rising nearly twice as fast as exports. Some economists predict if current trends continue, the U.S. agricultural trade surplus will turn into a deficit before the end of the decade.
SLUG IMMIGRANTS WORKING
To be a viable trading partner is to remain competitive in the world marketplace and to control costs. That is why when the President called for immigration reform, heads turned in farm country. In his State of the Union speech, Bush tried to appease several entities.
President Bush: "Our nation needs orderly and secure borders. To meet this goal, we must have stronger immigration enforcement and border protection. And, we must have a rational, humane guest worker program that rejects amnesty, allows temporary jobs for people who seek them legally and reduces smuggling and crime at the border."
Last month, the House passed a bill that will require all U.S. companies to verify their workers are not illegal immigrants. Critics claim this bill will increase labor costs and cause a decline in agricultural production.