Date: Dec 01, 2014
Magazine:
December 2014: Immigration Effort Top Story of 2014

While the fight for immigration reform deserves the top billing for 2014 in terms of its continued impact on agriculture, there were a plethora of other issues that also garnered the much-deserved attention of the ag community.

Included in that group is the drought that gripped California and other western states, the enactment of the Affordable Care Act, the Republican election victories in November and the passage of the California Water Bond in that same election cycle.

 

The Drought & the Water Bond

“Water,” says Western Growers President and CEO Tom Nassif, “will be our top priority in 2015.  The passage of the Water Bond was great, but that won’t give growers any water immediately.”

2014 marked the third year of drought conditions in California.  More than 85 percent of the state is now in “extreme drought” conditions with more than 50 percent being in the worst category of “exceptional drought” conditions.

To help alleviate the situation somewhat, Western Growers pushed Congress hard to pass a drought relief bill that would temporarily alter water release conditions in California and result in the pumping of more water to California farmers.  As of this writing, that effort is still ongoing.

Dennis Nuxoll, WG vice president of federal government affairs, said on Nov. 5 that an effort to pass the federal drought relief bill in the lame duck session of Congress (the short session after the election but prior to the seating of the new Congress in January) is forthcoming.

“If we don’t get it during the lame duck session, we will continue to work for it in the next Congress,” he said, “but resolution may come too late to help growers in 2015.”

The new Congress is expected to have many different items on its priority list, and passing drought relief may not surface early in the session.  California growers, of course, will have to make their spring and summer planting decisions early in the year.  By that time, it is statistically possible (about a 1 in 4 chance) that well-above average rainfall and snowpack will put the state in good shape.  But the more likely scenario (3 in 4 chance) is that average or below average precipitation will occur and growers will be looking to the federal government for a modicum of relief. 

Though the passage of the California Water Bond by about two-thirds of the state’s voters will not provide immediate relief, it is monumental nonetheless.  Experts have said the $7.5 billion in state money will be leveraged to attract three or four times that much money in federal dollars.  In the November issue of WG&S, Metropolitan Water District General Manager Jeff Kightlinger said passage of the bond should be able to create sufficient dollars and sufficient water projects to take care of California’s water needs for the next 30 years.  That’s a tall order, but if it is achieved today’s future farmers will have one less worry on their plate.

Add to that the ground water legislation that was passed this year by the California Legislature and 2014 marks a momentous year in the effort to address the Golden State’s water issues.  Though the groundwater legislation was controversial, Tim Quinn, executive director of the Association of California Water Agencies, told attendees of the WG Annual Meeting that the passage of the bill was a “once in a century accomplishment” and a game changer in the state’s effort to stretch its water supplies.

 

Politics & the 2014 Elections

With the November elections only slightly in our rear view mirror, pundits are still trying to figure out what the impact will be.  Republicans gained control of more governorships, state houses, House of Representative seats and U.S. Senate seats, leading to a majority position in the Senate.  Just how they will use this new-found power is being debated in the halls of Congress, in the offices of lobbyists and in editorial board rooms in the nation’s media centers.

While Republican leaders Mitch McConnell of the Senate and John Boehner of the House expressed interest in working with President Barack Obama to solve some of the nation’s ills, most are not at all certain that the governmental logjam of the past six years can be fixed.  Obama still has veto power and the Republican leadership still has a far right-leaning wing that doesn’t see compromise as anything but a dirty word.

Nonetheless, Nuxoll said there are some issues where compromise is possible.  He noted that Democrats and Republicans have both expressed interested in changing tax policy, especially addressing corporate tax reform.  There also appears to be a lot of support on both sides of the aisle for the development of more trade agreements and the passage of legislation making it easier for U.S. companies to prosper in foreign trade lanes.

The WG executive said the new Congress might also look at reforming the Endangered Species Act.  While the president almost certainly would veto a bill gutting ESA, there are changes with bipartisan support.  “The bill was written 40 years ago,” said Nuxoll.  “There is room for improvement.”

Nuxoll said there is also a good chance some changes to the Affordable Care Act could be passed and signed into law by the president.  While the Republicans will no doubt put forth repeal of the law as they have every year since its passage, there is no chance that effort will succeed.  Once that for-show activity concludes, there are changes that could make a difference for employers.

Nuxoll said it is possible that the employer mandate could be eliminated or altered, though he said getting rid of the individual mandate is almost certainly not going to happen.

Regardless of what issues the Republican-controlled Congress attacks, there is general agreement that the window of opportunity for substantive action is small.  By the summer of 2015 there could be a dozen or more Republican candidates vying for the right to represent the party as its national standard bearer in the 2016 presidential election.  Many of these will come from Congress, including expected runs by Sens. Rand Paul, Ted Cruz and Marco Rubio.  Once the gloves are off in the election fight, it will be difficult to forge compromises on the Senate floor.  While the Republicans have 54 of the 100 seats, the rules of the Senate (regarding filibusters) require 60 affirmative votes for most legislation.

Ken Barbic, WG’s senior director of federal government affairs, told WG&S on Nov. 10 that the incoming freshmen class of Congress was still being analyzed, but it does not appear to offer a lot of pathways toward compromise.  While Republicans took nine seats they did not previously have in the U. S. Senate, most of those seats came by defeating fairly moderate Democrats in Red States.  The 44 Democrats and two Independents who will offer opposition to Republicans tend to be more left leaning.

For the Republican Senate to pass anything substantive, they are going to have to hold onto all their 54 votes and pick off a few Democrats.  If the three or four most conservative Republicans take a no-compromise stand, even greater compromises will be needed to attract more votes from the Democrats.

It will be a difficult situation and not a whole lot different than what the Senate has been experiencing for the past six years.

As Congress settled into the lame duck session in November, WG’s Nuxoll said some signs should emerge that could indicate how contentious 2015 will be.  In the first place, the lame duck session has to pass a spending bill to keep the government funded.  Shortly after the election, both McConnell and Boehner promised there would be no government shutdown over the bill as some of the more conservative elements of their party would like to see.  But they did not indicate just how long they would fund the government.  Nuxoll said a stopgap funding bill of 90 days or so might indicate that the Republican leaders are feeling their oats and readying for a fight early in the new Congress.  A longer-term spending bill could indicate they want this issue off the table as they go about the business of addressing other concerns.

In addition, the lame duck session is expected to pass funding bills for both the Ebola crisis and the battle with ISIS.  These bills should garner much bipartisan support.  If they do, it might portend well for compromise in 2015; if they don’t, watch out!

 

Affordable Care Act

It deserves mention in any analysis of 2014, simply because it finally took flight.  Some type of universal health care has been on the agenda of one party or the other for far longer than a half century.  The legislation had a contentious history, and its rollout was littered with delays and disasters.  It finally got off the ground and by all accounts has provided relief to some segments of society.  However, it is still a hotly contested issue and one that the U.S. Supreme Court has agreed to look at once again in 2015.

This time the issue revolves around a provision in the statute that allows subsidies to individuals for insurance provided by the state exchanges.  Only 14 states enacted their own exchanges with 36 being part of the federal exchange as provided by the law.  The court case claims those subsidies are not legal under the ACA and should be abolished.  The subsidies are an integral part of the law and if the Supreme Court invalidates that aspect, there is no telling what will happen.

Insurance companies are doing quite well with their new-found customers and have adapted to the new law.  Millions of Americans are now getting health insurance who didn’t get it before.  It would be very difficult politically to take that insurance away.  If the Supreme Court does invalidate the law, some states — especially Blue States — would probably pass their own state exchanges.  Some deep Red States probably wouldn’t.

The rejection by the Supreme Court would give the Republican-controlled Congress a bargaining chip if they choose to negotiate some changes to ACA for new language allowing for subsidies to participants in the federal exchange.  But that would open a difficult bargaining conundrum as many Republicans in the House and some in the Senate would settle for nothing less than complete repeal of the law, creating some division among their ranks.

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