Republicans promised to use their increased majorities in the House and Senate as well as President Bush’s re-election to push for reforms in the current tax code and Social Security during the 109th Congress, which convened last month.Both of these initiatives will be very costly budget-wise and could come at a political cost by alienating key constituencies. The Bush Administration has promised the focus will be on reducing the historic federal budget deficit by submitting a budget that would halve the deficit in 10 years. That means other popular programs such as farm programs will face the budget axe next year. Proponents of payment limits for farmers also will renew their call for reducing subsidies to farmers as a way to control federal spending as well.The Bush Administration and Congress also have promised to focus on reforming the tax code and simplifying it for all Americans. That, too, will come at a cost, and will add budget pressures next year. Many in Congress have advocated a simpler tax code such as a flat tax, or value-added tax but are sure to face opposition from special interests that benefit from exemptions in the current tax code system.The new Senate Agriculture Committee chairman, Sen. Saxby Chambliss (R-Ga.), has promised to start hearings on the next farm bill that will need to be reauthorized in 2007, and the chairman of the House Agriculture Committee, Rep. Bob Goodlatte (R-Va.), has promised to start hearings as well. In addition, the United States will have to overcome a World Trade Organization ruling, which held that parts of the current cotton program violate world trade rules. The ruling calls into question whether counter-cyclical payments to producers are trade distortions. The ruling on the appeal of the WTO decision is expected to come in March. Alabama currently has three congressmen on the House Agriculture Committee.President Bush also announced the nomination of his second Secretary of Agriculture, Mike Johanns, who is the current governor of Nebraska. Johanns is expected to continue to focus on trade and agriculture issues. In his home state of Nebraska, he was a leader in pursuing and opening other markets for farmers. Johanns’ nomination was expected to be considered by the Senate Agriculture Committee in January.The dates for the Alabama Farmers Federation’s Washington Legislative Trip are March 15-18, 2005. Invited speakers will include the Secretary of Agriculture nominee Mike Johanns, incoming chairman of the Senate Agriculture Committee Saxby Chambliss and the ambassador from New Zealand to the United States to discuss trade issues. In addition to trade, Alabama farmers also will be focusing on supporting Alabama-specific agricultural research initiatives in the federal appropriations process.With regards to insurance issues, Congress continues to examine the role of the federal government in what is largely a state-regulated industry. Among the proposals by some insurance companies are creating an optional federal charter for insurance companies that operate in all 50 states, and whether to re-extend the federal backstop for terrorism reinsurance. Both Senate Banking Committee Chairman Richard Shelby (R-Ala.), and the House Financial Services Committee have promised to hold further hearings to examine these issues. The chairman of the House Financial Services Committee, Rep. Michael Oxley (R-Ohio), will continue his push for streamlining regulatory burdens for insurance companies in order to allow them to become more competitive.Alabama Farmers Federation National Affairs Director Keith Gray lives and works in Washington, D.C. Keep track of what’s going on during the 109th Congress by reading Gray’s weekly Washington Ag Update online at www.alfafarmers.org.
Tax Code, Social Security Reforms Top Bush Congressional Agenda