Heritage Foundation's blueprint for upcoming 2018 farm bill

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Last September the conservative leaning Heritage Foundation issued a report entitled “Farms and Free Enterprise: A Blueprint for Agricultural Policy”. The Report (Here) reviews agricultural policies which Heritage believes needs to be changed and eliminated.
This did not go unnoticed. One group, Farm Policy Facts, issued a press release on April 25, 2017, claiming “The Heritage Foundation is cranking up its anti-American agriculture propaganda machine in an effort to destroy what remains of the farm safety net just as Congress begins the process of writing the next farm bill.”
Their farm policy statement claims Heritage is out of touch with reality “…because there is no free market when it comes to agriculture. Our producers are competing against foreign governments and their treasuries, not foreign farmers.”
The Heritage Foundation, through its CEO, claims it is time to change American farm policy and the farm bill by telling Congress “Our leaders will best honor the vital role of agriculture in our society by letting us return to our plowshares unmolested by government, and leaving despotism with the rest of the fertilizer.” The Heritage report suggests eliminating longtime farm bill policies. Heritage would get rid of agricultural program spending, eliminate revenue-based crop insurance, eliminate bio energy programs, eliminate the ethanol mandate, eliminate WOTUS or Waters of the United States, and transfer management of federal lands back to states and private citizens.
Heritage Foundation influence in Washington
The Heritage Foundation is an influential force in Washington, D.C. For the next two years, Congress will undertake a program to reauthorize many agricultural programs or cut them back. Heritage claims its policy  proposals  “…give legislators a choice between the status quo and policies that believe in farmers, ranchers, and the market, not in cronyism and big government.” Heritage claims it has a free enterprise blueprint for American farmers. Producers should take the time to read the Heritage Foundation proposals. For many of you, I suspect, there will be anger at what Heritage is proposing to impose on America’s farmers and ranchers. For some, reading the Heritage Report there will be enthusiasm if not support regarding the promotion of free trade for agriculture and there will likely be support for Heritage’s suggestions of eliminating key regulatory obstacles.
The blueprint Heritage proposes for agriculture involves separating agricultural programs from the nutrition title of the farm bill. This is likely to be a nonstarter because several spokespeople for the Trump administration have made it clear this policy is not supported by President Trump.
Heritage seeks to move away from subsidies which address agricultural risk. Heritage suggests that the agricultural production in this country comes from farmers who have the financial means to manage risk. Heritage claims that farms with $5 million or greater in agricultural sales account for about a third of all sales. Farms in the U.S. with $1 million in sales account for about 2/3 of agricultural product sales. Heritage also claims “75% of all farms had sales less than $50,000, accounting for only 3% of all sales;” the last statistic Heritage cites for its position that subsidies should be eliminated is that “More than half of all farms had sales of less than $10,000. These farms accounted for less than 1% of all [agricultural] sales.”
Based on these numbers, Heritage wants to eliminate all of Title I except disaster assistance programs, focus the Federal Crop Insurance Program to eliminate revenue-based policies, cover deep losses only, treat farmers and ranchers as other businesses for disasters and involve the states in assisting in agricultural risk programs.
Heritage, in essence, makes the point that farm households are truly wealthy as compared to other American households. Moreover, Heritage declares the vast majority of even small farm households are doing quite nicely. Heritage concludes that the farmers and ranchers of America are doing too well and no special treatment is necessary to help them manage risk.
I suspect there will be considerable disagreement on this last point.
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Stop Me If You’ve Heard This

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Here is a headline we could have written any time during the past twenty years, and probably any time in the next twenty: Washington Monument Closed Again.
Closing the landmark to pressure Congress into giving the Park Service more money is so common that it has a name in the dictionary: The Washington Monument Syndrome. Wikipedia defines it as “a political tactic used… by government agencies when faced with budget cuts… cutting the most visible or appreciated service provided by the government, from popular services such as national parks…”
The idea was originated by Park Service Director George Hartzog, who closed the Washington Monument and Grand Canyon for two days a week in 1969. Congress had to restore funding, though it also cost Hartzog his job. It has been a tried-and-proven strategy ever since.
The Washington Monument is the first thing most tourists see in their Nation’s Capitol, and it hosts over 600,000 visitors annually.
The Monument has been closed during every temporary government shutdown, at least 5 times since 1990. It is also commonly closed for regularly maintenance that used to work around public tours. The Monument was shrouded in scaffolding for major repairs in 1934, 1958, 1998, and 2011. The first two times the public was still welcome. The last two, it was closed for two and three years, respectively.
Now, the Monument’s elevator needs work, having stalled several times, requiring closures from 12 hours to 12 days. Another 24 times since then, the Monument has been closed for other maintenance projects, and it is also frequently closed for hours at a time during special tours for special people.
Officials also close the Statue of Liberty and other major parks for sometimes dubious reasons. The Statue was closed for eight years after 9/11 and then only opened for a few people a day. It was closed again two years later for a full year of renovations, and reopened in 2012 – for one day. Then after a hurricane it was closed again, for almost another year, and it has been closed repeatedly ever since. Finding such icons of national pride closed is no longer a big deal to visitors; it is routine.
Few people question the need for elevator maintenance. The Washington Monument’s current trouble-plagued elevator was installed in 1999, but took two years. That timeline is the part people have trouble understanding. This time, we are told the Monument must remain closed at least until the end of 2019 for an elevator project that will cost $2.5 million. But it doesn’t take two years to fix an elevator. The 1960s-era motor is still fine and will not be replaced, just the doors, lighting, cables, and computers. All skyscrapers have elevators that require similar maintenance, but in the business world it takes hours, not years, and it is done in the middle of the night to avoid inconveniencing customers.
The Park Service admits that the $2.5 million elevator project could be done faster. It has already been funded, by a donation from businessman and philanthropist David Rubenstein. He has given over $50 million to major park projects, including the post-earthquake 2011 Washington Monument repairs, and restorations at Arlington House, the Iwo Jima Memorial, and Lincoln Memorial.
Private funding should expedite the project, but the Park Service wants to combine it with another far more ambitious item – a new security screening building. The proposed modern steel and glass structure is highly controversial because it doesn’t fit the architecture of the Monument and its surroundings (think of the glass eyesore in front of the Louvre). So, Congress has not yet agreed to fund it. Its $9.5 million cost includes 60 new geothermal wells, 200-400 feet deep, to heat and cool the Monument. Renewable energy is desirable, but does not require closing the Monument, 200 feet away. Designers say the public won’t even see the underground system, so the only way tourists will complain to Congress is if the Monument remains closed.
This new security building has been in the works for 17 years, including a 207-page Environmental Assessment four years ago. That process required public hearings in DC, but nobody asked the 600,000 annual Monument visitors whether the elevator repair should be held hostage to the more ambitious construction plan.
Here is my own modest proposal. Tell the Park Service its grandiose new design will have to wait until taxpayers can better afford such luxury. And tell the elevator company it has 30 days to reopen the Monument, or we’ll find another contractor.
(This article is reprinted with permission from Resources and Reality)
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Combine Corporate Tax Reduction With a Jobs Tax Credit To Keep and Grow Jobs in America

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Yes, President Trump’s proposed 15% corporate income tax will make America great again as the best place to start and grow a new company, encourage American firms to stay in the US, stop off-shoring jobs, and bring their overseas cash back to invest in the US. Even more importantly, it will change the way corporate CEOs run their businesses to avoid taxes, such as unhelpful corporate mergers and acquisitions designed to eliminate jobs. More wrong decisions are made in business for tax reasons than any other, and the higher the tax, the more wrong decisions we get.
But let’s do it right. Let’s reduce the corporate tax without setting up a big tax differential for lawyers and accountants to find ways to shift high personal income into low-tax one-person corporations that don’t produce more jobs. Let’s do it in a way that will help American workers compete more equally with high-tech robots and lower-wage foreign workers. Let’s do it in a way that will do more than allow corporate managers to use their increased cash simply to buy back corporate stock or accumulate cash so that shareholders can benefit from lower capital gains or dividend taxes.
We can do all of the above by keeping the statutory corporate income tax closer to the personal income tax rate, perhaps 25%, and then get additional tax reduction with a Jobs Tax Credit so that our job-creating businesses are the ones that will benefit the most from the additional tax reduction. A $10,000 Jobs Tax Credit for every full-time employee working 12 months each year in the USA could bring the average effective corporate tax rate close to Mr. Trump’s desired 15%. We can pay for much of the lost tax revenue by eliminating the extensive corporate welfare deductions that support an army of lobbyists, lawyers and accountants paid for by big businesses.
Best of all a Jobs Tax Credit would be extremely simple, and thus available to every business, large and small. The only paper-work requirement is one new box on the standard W-2 form already in use for reporting employee income. This would be a huge benefit to small businesses, our most important job creators, who cannot afford the high-priced lobbyists, lawyers and accountants who work for big businesses. (Note that this is a credit for every full time employee in the US, not just for new employees as was proposed several times in the past and subject to much gaming of the system.)
A Jobs Tax Credit will encourage corporate management to see labor as a genuine asset, rather than simply another cost to be reduced to increase profits. Encouraging management to hire and not to fire will increase workers’ feeling of job security, helping the economy grow with workers’ increased willingness to spend. By encouraging management to hire, it will also work in tandem with welfare policies that encourage the unemployed to try to get a job.
Some may say that a tax incentive favoring humans over robots will work against economists’ calls for increased labor productivity, but economists must recognize that a continuing stream of wage income is essential for a growing economy. Robots do not pay taxes, and do not spend continuously for food and clothing and other living expenses. It’s true that a Jobs Tax Credit will raise the bar for installing robots, but this is a better way to favor humans than trying to tax robots, as some have proposed, and it will emphasize good robots installed to increase production rather than simply reduce wage and benefits costs.
In short, a Jobs Tax Credit will reward corporations for doing what their privileged corporate status intended them to do, namely, organize the efforts of many people to work together to meet society’s needs in ways none of us can do on our own, and it will most reward the businesses that grow the jobs we need to grow our economy.
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If I Had a Billion Dollars

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If you had $1.2 billion to spend, what would you do with it? Before you answer, there are some strings attached. First, you are required to invest in electric vehicle technology, electric vehicle infrastructure, or something that would result in “zero emissions” vehicles. Now what would you do with all that cash? Answer: whatever the EPA dictates.
That is the crux of yet another EPA controversy. This week several free-market organizations (Competitive Enterprise Institute, Americans for Prosperity, Energy & Environment Legal Institute, FreedomWorks, National Center for Public Policy Research, and others) raised a fascinating legal issue about the settlement reached last fall between EPA and Volkswagen. A federal judge approved the deal in December, and one part of it is raising serious questions for the new Administration, according to a letter from the groups to President Trump.
The legal case stemmed from the automaker’s installation of “defeat devices” designed to cheat air quality rules in over 500,000 vehicles sold in the U.S. The consent decree provides relief for car owners, as well as penalties paid to the State of California and the Federal Trade Commission. But another part of the $15 billion agreement requires that VW invest $1.2 billion to foster electric vehicle infrastructure. What exactly does that mean? The decree does not specify where VW must spend it, but that it obtain EPA approval of the investment plan, and of spending plans every year. And EPA could levy massive fines should VW fail to comply every year. That EPA role in managing VW’s investment is now the issue.
You see, Congress has never given EPA authority or funding to oversee electric vehicle infrastructure development, much less to regulate the private investment of auto companies (foreign or otherwise). That was a major priority for President Obama, who promised in his 2011 State of the Union speech to put a million electric vehicles on the streets by 2015. Whether that is a similarly high priority for the new Administration ought to be for President Trump to decide. That’s why the groups signing this letter allege that the previous Administration used a legal settlement “to exercise the discretionary authority of future presidents.”
Legal settlements can help advance important policy goals. For example, when I was Executive Director of the Colorado Department of Natural Resources, we successfully negotiated the settlement of a case involving an accidental spill of beer into Clear Creek. Since many fish were poisoned, the state law required significant fines to be paid to the state wildlife agency. But paying lots of money to a state agency wouldn’t actually prevent future accidents, nor would it improve the environment. It’s just money changing hands. So instead, the brewery agreed to finance construction of a large system of manmade wetlands, which today treat effluent from both the brewery and the City of Golden, and which provide excellent educational opportunities for school classes learning the value of wetlands to water quality. That advanced the policy goals of our Administration, the city, and the brewery.
The difference with the EPA-VW settlement is that it advanced the policy goals of the outgoing Administration – in a way that could foreclose some options for the next. The groups writing to President Trump this week are asking two things. First, they want an analysis of how much this oversight activity will cost the EPA. Second, they want the EPA to “reassess its underlying commitment and authority” to oversee VW’s future investments. What that leads to is a call for the new Administration to exercise a “severance clause” in the settlement decree. That would allow the parties to remove that part of the deal without jeopardizing the consumer relief parts. But what will happen if the new Administration decides to do that?
Under the terms of the settlement decree, if the parties agree to cancel the EPA oversight portion, VW then has to pay the $1.2 billion to the U.S. Treasury. If you’re wondering what that has to do with the environment, or how it would improve auto compliance with clean air standards, I’m with you. Once again (to repeat a common theme), that is about money, not the environment.
So, if you had a billion dollars to help promote electric vehicle technology, what would you do with it? Most likely, you would invest in electric car companies, or those doing the best work in research and development. The last thing you would do is give it to the EPA, or pay it to the U.S. Treasury.
(This article is reprinted with permission from Resources and Reality)
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The Marketplace is Speaking. Are the Counties Listening?

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After CoStar Group, a provider of real estate market intelligence, announced last fall its intention to move its research division headquarters to downtown Richmond, the company offered employees from Washington, D.C., Atlanta, San Diego, and Columbia, Md., an opportunity to move to Virginia. A big concern of Senior Vice President Lisa Ruggles was how many would want to make the move. “I had no idea of how many people would be interested,” she said.
She was surprised that 150 applicants responded, Ruggles told Richmond BizSense. After they took part in three-day tours of the metropolitan area, she says, “I told them that they were all welcome to come to Richmond, and the place erupted. Everybody was clapping, people were crying; it was an amazing sight to see.”
AvePoint, a New Jersey provider of Microsoft cloud services, had a similar experience, according to BizSense. “We estimated that when we would be transferring people down here that we might not get a ton of people, because Richmond is very different from New York,” said AvePoint COO Brian Brown. “That’s proved absolutely not to be the case.”
Big selling points: a lower cost of living, shorter commutes and a high overall quality of life. “I think one of the things people are pleasantly finding, especially people who have families, is how cheap it is to find a really nice place to live and how easy the commute is,” Brown said.
Here’s the really interesting thing:

CoStar’s Ruggles said it has been interesting to see where employees have chosen to live in Richmond. Of the 120 employees who made the company’s initial move, she said the majority chose places such as Deco at CNB and other apartment communities in Tobacco Row and Manchester. Only two employees chose to live in Short Pump, said Ruggles, who herself just closed on a house in the West End.
“Coming from D.C., a lot of our employees don’t have cars, and that was not something they were wanting to run out and buy, so a lot of people ended up in locations where they could walk to work,” Ruggles said. “We have found that, because that group relocated from D.C., where they’re used to taking the Metro or walking or riding their bike, they’re continuing to do that here.

Bacon’s bottom line: Richmond’s urban core exerts a strong appeal to highly skilled and educated employees — the affluent, creative-class types who pay more in taxes and spend more in the local economy — from other cities. If the region wants to attract more employees like them, along with the companies that employ them, the city and counties need to facilitate the building of the kind of communities these people want to live in. That means more moderate density, more mixed-use development, more grid streets, more investment in streetscapes, and, where economically justified, more mass transit.
That’s an easy sell for Richmond, most of which was laid out according to the dicta of traditional city planning. It’s a harder sell for Henrico and Chesterfield Counties, built according to the principles of suburban sprawl. The marketplace is yelling loud and clear what it wants. As a Henrico resident with a vested interest in the county’s long-term fiscal viability, I hope county officials are listening. If they’re not the City of Richmond will kick our butts in the economic development game.
(This article first ran in Bacon’s Rebellion on May 5, 2017)
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