Washington Insider -- Tuesday

Chesapeake Bay Cleanup Tensions

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Senate Appropriators Could Boost to U.S. Farm Exports to Cuba

U.S. exporters of farm and food products could find that financing those sales will become easier if legislation approved by the Senate Appropriations Committee becomes law. The panel last week approved three amendments to the Financial Services and General Government appropriations bill for fiscal 2016 regarding U.S. relations with Cuba. One of the three would ease credit restrictions on agricultural exports to the island.

Sen. John Boozman, R-Ark., proposed the amendment that would let U.S. private banks and companies offer credit to finance agricultural exports to Cuba. Currently, Cuba is required to pay in full for U.S. exports before they leave the port, and a third-party bank handles the exchange.

Trade observers note that financing restrictions remain the biggest obstacle to U.S. competition for markets in Cuba. The majority of Cuba's food imports now come from Brazil, Vietnam, the European Union and Canada. Easing or dropping restrictions covering financial dealings with Cuba could change that, but congressional opponents are likely to keep the measure bottled up, at least for the foreseeable future.


House Budget Committee Begins Long Search for New Process

The House Budget Committee today is scheduled hear from several academics who have proposed ways that Congress could reform its current budget process. However, panel Chairman Tom Price, R-Ga., told reporters that overhauling the Congressional Budget and Impoundment Control Act of 1974 (the law that set up the current budget deadlines for the White House and Congress), will be a multiyear project.

Recently, the Bipartisan Policy Center issued its own set of recommendations for overhauling the way the federal budget works. Authors of the report included Alice Rivlin, a former director of the Office of Management and Budget in the Clinton White House, and former Senate Budget Committee Chairman Pete Domenici, R-N.M. Among other things, the Rivlin-Domenici report proposes a two-year cycle for budget resolutions and appropriations bills, with the non-budget year to be used for authorization work and oversight by Congress.

Biennial budgeting has been proposed a number of times in the past, but has made little headway in Congress. It is unlikely that the two-year schedule will be seriously considered by Congress any time soon. Chairman Price told reporters, "I don't think that biennial appropriations is a wise idea. And I'm not certain about biennial budgeting…. My concern is that what we need to be doing, I think, is concentrating on an overall rewrite of the '74 Act, and doing things like that before the rewrite just doesn't make a whole lot of sense to me." Price also said that rewriting the '74 Act would be a "two- to three-year process," so no one should expect any changes in the congressional budgeting process until 2020, at the earliest.


Washington Insider: Chesapeake Bay Cleanup Tensions

While the press tends to highlight the rural "revolt" against regulations issued by the Environmental Protection Agency, several areas of the country are dealing directly with environmental crises, including the Chesapeake Bay watershed. There, a multi-state compact is attempting to implement tough conservation policies that are being watched very carefully in other farming areas of the country.

Last week, the Chesapeake Executive Council, approved 25 "management strategies" to attain several "mostly aspirational" goals in the basic Bay Watershed Agreement. These were reviewed in detail and approved by EPA officials and leaders from the six bay states. However, USDA made waves by refusing to sign on to one significant measure.

Technical studies in the watershed have concluded that agriculture is the largest source of nutrients and sediment in the watershed and key agricultural "best management practices" are widely seen as the most cost effective pollution reduction technique available. However, USDA balked at the proposal to increase the miles of grass and forested buffers between farms and streams. The key objection is the effects the requirement would have on land use.

Kirk Hanlin, assistant chief of USDA's Natural Resources Conservation Service, told the press that farmers object to idling productive land without state or federal cost sharing. "Farmers will dedicate marginal land to buffers," he said, "but some farms don't have marginal lands. As a result, determining the best conservation approach requires farm-by-farm analyses," Hanlin said.

The other restoration goals include protecting pristine water bodies and open land, restoring polluted waters throughout the watershed and restoring aquatic and native bird populations to their historic norms. This is in addition to the goals of reducing toxics pollution and boosting the bay's resilience to climate change.

The 2014 watershed agreement includes one mandatory goal: reducing nutrient and sediment loading to the Chesapeake Bay and its tidal basin. A total maximum daily load (TMDL) established by the EPA in 2010 would require states to implement by 2025 policies and practices that will reduce nitrogen, phosphorous and sediment loading to the estuary to levels that allow the ecosystem to recover.

EPA officials say overall progress to date is impressive, despite some setbacks. Last year, the Executive Council approved continuing the use of state-specific "watershed implementation plans" that detailed specific activities to reduce the pollutants and established biennial "milestone" evaluations of progress.

In general, these require that 60% of the needed pollution reductions be achieved by 2017. Current estimates regarding the "TMDL support strategy" indicate that nitrogen reductions are off track for 2017 by 6 million pounds. However, phosphorus and sediment loading reductions are roughly on track.

The support strategies approved last week for ensuring progress toward the TMDL mandates include, among other things, possible mandatory programs for agriculture if pollution reductions fall behind schedule.

While these targets are extremely controversial in many circles, observers note that even Pennsylvania, which is "well behind" on its TMDL progress commitments, says it remains "fully committed to bay restoration" and plans to employ additional support strategies, including specific pollution reduction plans as part of the municipal separate storm sewer system permitting process to achieve its goals.

Maryland says it "may not be able to do it," referring to the pollution reducing investments needed for the state to meet its 2025 commitments. It plans to convene a symposium in 2016 to explore the alternative funding potential of nutrient trading and public-private partnerships. Also in Virginia, democratic Gov. Terry McAuliffe, the current chairman of the executive council, said that across the watershed, "government funding won't suffice" suggesting the need for addition support

So far, it seems that the Chesapeake Bay Compact is imposing tough rules to help accomplish important goals. These are controversial almost everywhere, so the fact that the compact is able to report substantial progress is remarkable, especially in this era of anti-government sentiment.

While it is early in the Chesapeake Ban restoration effort, it is clear that these and other environmental objectives have powerful political support as well as rural opposition, and that many urban environmentalists are more than willing to help fund well designed, effective conservation programs, Washington Insider believes.

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