Q.  What is the Rural America Preservation Act?

A.  The Rural America Preservation Act is legislation I've sponsored to help restore the government farm program to its original intent by making sure program payments are targeted at small- and medium-sized farmers who need assistance getting through tough economic times that are due to circumstances beyond a farmer's control.  I introduced the bill with Senator Tim Johnson of South Dakota.  The legislation would limit the total amount of farm-program payments that a single farmer could receive to $125,000.  The payment-limit breakdown for an individual farmer would be 1) a cap of $20,000 on direct payments, which are based on a farmer's acres and yields, as well as a set payment rate; 2)  a cap of $30,000 on counter-cyclical payments, which are available to farmers when the market price of the commodity they produce is less than a target price set by the federal government; and 3) a cap of $75,000 total on gains a farmer can receive from repaying a marketing assistance loan, loan deficiency payments, and gains realized from the use of a commodity certificate issued by the Commodity Credit Corporation.

Our bipartisan bill also would close a loophole that some non-farmers have exploited to improperly receive farm payments.  It does so by narrowing the guidelines used to define who is considered actively engaged in farming.  The evidence of non-farmers' abusing this loophole is astounding.  Both the Government Accountability Office and the U.S. Department of Agriculture Payment Limit Commission have pinpointed this as a critical area of concern.  Closing this eligibility loophole is important to maintaining support from non-farm state members of Congress for the farm program.  In order to help alleviate this problem, the bill would create a measurable standard of active, personal labor and management for the Department of Agriculture to use in determining if people requesting farm program payments are indeed farmers, or if they are just trying to game the system.

Q.  Why are these changes necessary?  

 

A.  To ensure that farmers are able to provide a safe, affordable and abundant food supply, it's important to get the farm safety net back to its original intent.  The federal farm programs were meant to help small- and medium-sized farmers weather the bumps associated with farming.  The importance of providing a food supply is clear at every family's dinner table.  Without a reliable and affordable food supply, desperation results.  If a mom or a dad wasn't able to feed their kids for three days, they would do just about anything to feed them.  If we lose the safety net that allows family farmers to weather the storm, then that safe, affordable and abundant food supply might just go away.  To keep this safety net in place, we need to change the way farm program payments are distributed.  Unfortunately, under current policies 10 percent of the biggest farmers in the U.S. receive more than 70 percent of farm payments, and some payments go to non-farmers.  If left as is, the distribution system that pays out the lion's share of federal dollars to the largest and wealthiest farming operations will spell the beginning of the end of the farm safety net.

The trend in farm program payments going to big farmers also has a negative impact on the next generation of farmers.  We need to keep young people in farming, so they're ready to take the lead when the older generation of farmers turn over the reins.  When 70 percent of farm payments go to 10 percent of farmers, it puts upward pressure on land prices and cash-rent arrangements, making it a lot harder for smaller and beginning farmers to buy ground or afford to rent land.  This makes it difficult to get a foothold in farming and leads to big farmers getting even bigger.

It's time to enact legitimate, reasonable farm program payment limits that tighten eligibility requirements and help those that the farm program was created for in the first place.  The Grassley-Johnson bill would go a long way toward getting the farm program refocused on providing needed assistance to small- and medium-sized farmers.

Charleston, SC - Today, Congressman Bruce Braley (IA-01) stood up for the rights of working families at a field hearing of the House Oversight and Government Reform (OGR) Committee in Charleston, South Carolina. The Republican-controlled OGR Committee held the hearing despite objections that it interferes with an on-going case before the National Labor Relations Board (NLRB). Rep. Braley defended the rights of working families in his opening remarks and throughout the hearing:

"We're facing a manufacturing crisis in this country - 15 factories are shutting down every day - but instead of addressing this issue and working to create new jobs, the Republican leadership has chosen to try and score political points. This hearing was a blatant attempt to interfere in an on-going judicial process - a process that should be free of tampering and interference to make it fair to both parties involved. By coming to a conservative region and calling conservative witnesses, the Republican members of the Oversight Committee are playing politics with the legally-protected rights of millions of working families across this country. Americans spokeloud and clear in November, they want us to create jobs and get our deficitunder control. That should be our focus, not attacking working families andtheir rights to organize and fight for fair wages."

 A video of Rep. Braley's remarks at the hearing is available here: http://www.youtube.com/watch?v=cjvOnhmMnMg

 

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CEDAR RAPIDS, Iowa (June 17, 2011) -  The historic move of the National Czech & Slovak Museum & Library (NCSML) in Cedar Rapids, Iowa begin its journey on June 18. Patterson Structural Moving plans to start the pivot of the building in the morning and expects it to get to the staging area by the end of the day

"Lightening or severe weather are the only things that will stop our 1500 building from moving,"  said CEO/President Gail Naughton.

The moving company has placed heavy metal plates over the road and will proceed with the pivot. The river side will then become the front side of the relocated and elevated museum. Plans call for moving the building just parallel with the new foundation/parking garage.

Plans have been finalized for the historic relocation of the flood damaged building currently located at 30 Sixteenth Ave. SW. Once the structure is secured and relocated, it will
be elevated to its final height 11ft. above where it sits today and 3 ft. above the level of the 2008 flood. It will then be rolled on to the new foundation and finally set down and secured in place.

"Live webcams on www.NCSML.org will allow viewing around the clock for the many people around the world interested in viewing all the activity. We are excited that this exceptional moment in the museum's history is finally coming to fruition. The expansion and renovation of this museum and library is a major milestone in flood recovery and an historic event for the city and the state of Iowa," said Naughton.

To see an animation on how the building will be moved, visit http://www.ncsml.org/Content/A-Monumental-Move/Newsroom.aspx.

The National Czech & Slovak Museum & Library, located in Cedar Rapids, Iowa, is the leading United States institution preserving and interpreting Czech and Slovak history and culture. It inspires people from every background to connect with Czech and Slovak history and culture.

WASHINGTON - Sen. Chuck Grassley of Iowa, with Sen. Ben Nelson of Nebraska and 26 other senators, is urging the top U.S. trade official to work to lift Russian trade barriers to U.S. pork products.

"Russia's unjustified position against U.S. pork has blocked products from plants that account for 60 percent of U.S. pork production capacity," Grassley said.  "Russia wants to join the World Trade Organization.  One of the issues Russia needs to address before joining is its unwarranted barriers to U.S. pork."

The Grassley-Nelson letter to United States Trade Representative Ron Kirk outlines two major barriers from Russia to U.S. pork.  The first is Russia's unilateral lowering of the amount of U.S. pork it allows to be imported, cutting the previously agreed-upon amount by about half.  The second is Russia's use of sanitary restrictions to limit U.S. pork exports to Russia.  The Russian restrictions are not supported by science or valid risk assessments.

The letter urges the trade representative to work toward encouraging Russia to ease the unwarranted restrictions and abide by commitments as a precursor to joining the World Trade Organization. The United States was able to obtain commitments from China and Vietnam to overcome similar obstacles as part of those countries' accession to the World Trade Organization.  Twenty-five percent of all U.S. pork is produced in Iowa. 

Grassley is a member of the Agriculture Committee and former chairman and ranking member of the Committee on Finance, with jurisdiction over international trade.  Signing the bipartisan letter include the chairman and ranking member of the Agriculture Committee.

The letter follows a similar letter that Grassley hand-delivered to top Russian officials on a trip to Russia last month.  The text of the latest letter is available here.

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AMES, Iowa (June 16, 2011) - More than 5,240 Iowa State University undergraduates have been recognized for outstanding academic achievement by being named to the 2011 spring semester Dean's List. Students named to the Dean's List must have earned a grade point average of at least 3.50 on a 4.00 scale while carrying a minimum of 12 credit hours of graded course work.

Bettendorf, IA
Tyler Steven Ambrozi; Lauren Paige Anderson; Ashley Marie Beck; Maggie Elizabeth Beckman; Stephanie Ann Blaser; Jessica Marie Blaum; Kaitlin Janaye Bohn; Kimberly Ann Booe; Benjamin Alexander Britz; Katharine Rosemarie Brown; Molly Rebecca Bryant; Jonathan William Buck; Sarah Anne Buck; Brett T. Bueker; Brittney Corrine Carpio; Tyler Benjamin Cline; Danielle Lee Cook; Erik Ross Creger; Aislinn Grace D'Auben; Daniel Robert Dammann; Emily Marcene Doerder; Gabriel S. Domingues; William Randolph Emerson; Elizabeth Anne Fry; Jenna Corinne Fussell; Valerie Sylvie Gilles; Emily M. Graham; Jiyeon Han; Michael Paul Hayes; Jacob T. Hemberger; Aaron Michael Hewitt; Leah Elizabeth Hodgin; Lindsay Jo Hoffman; Morgan Dale Hoke; Christopher John Huber; Bryce Phillip Johnson; Carolyn Anne Johnson; Megan Michelle Johnson; Cameron Lee Junion; Rachel E. Kirkpatrick; Abigail Marie Kline; Kelsey Lynn Kraft; Michael Drew Kurtz; Austin Douglas Langfeldt; Elizabeth Ilene Larsen; Mikaela Marie Leners; Jesse William Leonard; Alexander M. Matheson; Thomas Ray McGee; Christopher P. Meadows; Brock Robert Mills; Emily Jeanne Misak; Jared Paul Mumford; Nicole Renee Oldfather; Abigail S. Pritz; Carter L. Roberts; Carleigh A. Rose; Keaton Michael Sandeman; Mindy Jolene Schlueter; Grant Bradley Sherrard; Andrew Mark Slifka; Devin Vaughn Sloan; Heather M. Vandewostine; Kelly Ann Wagner; Stefani Nicole Williams; Chad Edward Wisham;

Davenport, IA
Derek Reid Attwood; Whitney Ann Bacon; Heather Nicole Bennett; Nathan Joseph Bierl; Cara Jo Blake; Nicholas C. Borcherding; Rebecca Joy Briesmoore; Matthew Allen Burmeister; Margaret Marie Carlin; John Michael Crispin; Matthew T. Darmour-Paul; Brett Christopher Ebert; Nicholas A. Eisenbacher; Jacob Timothy Fetterer; Michael Francis Fosdick; Marinda R. Gacke; Gilbert Garnica; Alexander Joseph Gowey; Thomas Winston Hales; Anne Marie Harre; Christopher Thomas Harre; Kelsey Jane Hoeksema; Kathleen Marie Hoil; Malcolm Andrew Kelly; Emily Marie Kenneke; Danielle Marie Kimler; Nicholas Aaron King; Laura Beth Klavitter; Laura Marie Kleinschmidt; Luke William Klenske; Aubrey Erin Krug; Austin Miles Laugen; Andrew Jeffrey Longley; Megan Marie Lovich; Britney Jean Meier; Sarah Elizabeth Miller; Jeffrey Michael Moritz; Anna Elizabeth Mullen; Adam Nguyen; Kara Nhu Nguyen; Thanh Kim Nguyen; Alison Margaret Perkins; Nathan S. Premo; Mohammed Ashiqur Rahim; Aleah Nicole Salisbury; Bryce Taylor Sandry; Daniel Lee Sedam; Ashley Janee Shivers; Brian Vincent Skalak; Brittany L. Springmeier; Matthew James Stegemann; Michal-Marie Tillotson; Caitlin Erin M. Toppler; Lauren N. Westerdale;

Moline, IL
Alex James Michl; Kevin Craig Shedd; Caleb Jack Spiegel; Ingrid Ann Tunberg; Steven Anthony Vogel;

Riverdale, IA
Kelsey Marie Bulat; Amy K. D'Camp; Peter F. Joers;

Rock Island, IL
Derrick J. Anderson; Danielle J. Cram; Taylor Marie Downing;

Washington, DC - Today, Congressman Bruce Braley (IA-01) released the following statement after the Senate voted to end support for the U.S. ethanol industry:

"I'm very disappointed that the Senate took this action today. Thousands of good-paying Iowa jobs depend on ethanol, and this industry is crucial to our state's economy. But ethanol is important to families across the country because it's a clean, domestically produced fuel source that lowers the price of gas. Today's vote is just another example of Washington politicians siding with big oil companies and foreign interests instead of standing up for a clean, domestic fuel source and the family farmers who produce it." 

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MOLINE, ILLINOIS - WQPT, Quad Cities PBS is pleased to introduce their 2011 WQPT/PBS Ambassadors, an elite volunteer corps made up of college students.

The WQPT/PBS Ambassador program, in its seventh year, provides an opportunity for college students to represent their local public television station at a variety of events throughout eastern Iowa and western Illinois. "Ambassadors are an elite volunteer team that serves as an extension of the WQPT staff," said WQPT Special Projects Coordinator, Bea Brasel. This year the WQPT/PBS Ambassadors are:

Front Row: Michele Moreno-Black Hawk College
2nd Row: Karri Folks-Western Illinois University, Melissa Gravert-Western Illinois University
3rd Row: John Bosco Munyengabe-Black Hawk College, Kristi Phillipson-Black Hawk College, Irene Cruz-Northern Illinois University, Kelly Libberton-Western Illinois University, Onder Badur-Northern Illinois University
Not in Photo: Daniel Brasel-Illinois College & Shanen Norlin-Western Illinois University

"Our Ambassadors are an important part of our volunteer corps and many of them return to volunteer long after their college years end because they believe in the work that WQPT does in the community," said Ms. Brasel. WQPT is the public media service of Western Illinois University - Quad Cities located in Moline, Illinois

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Washington, DC - Today, Congressman Bruce Braley (IA-01) released the following statement after the House voted on the FY 2012 Agriculture Appropriations bill:

"Since the start of this Congress, we've seen a sustained attack on Iowa farmers and our state's economy. This bill is just the latest to threaten the thousands of jobs that depend on agriculture and the ethanol industry. I voted against previous bills that threatened Iowa jobs and I voted against this bill today because I will always stand up for Iowa farmers, jobs and our middle class families."

 

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Local farmer hosts Mobile Experience in the Quad Cities 

BETTENDORF, Iowa  (June 16, 2011) - Residents in the Quad Cities got a peek into the life of American farmers and had the chance to better understand the challenges they are facing by touring Monsanto's America's Farmers Mobile Experience.  The traveling exhibit is a 53-foot long trailer that expands into 1,000-square-feet of exhibit space, designed to showcase the lives and contributions of American farmers.

Kevin Green, local farmer, had the opportunity to host the Mobile Experience in his hometown at Isle Casino in Bettendorf on June 7 and 8.  "I think it is great that we as farmers now have this tool to help us better communicate with consumers," Green said. "This is a step in the right direction and hopefully it will bring greater awareness about where food comes from."

Visitors enter the Mobile Experience to find interactive tools that identify the challenges farmers face as they increase food production to meet the needs of a growing world population.  A 180-degree theater features a video spotlighting an American farm family and what they are currently doing to meet those challenges.  In the video, visitors hear three generations of farm women speak about what farming means to them.

The final phase of the tour highlights the tools and technologies farmers use every day that help them produce safe, affordable and abundant food, fuel and clothing.

America's farmers grow our economy and care for our land. Monsanto wants to involve the consumer in every aspect of the farmer's life, from food production to the challenges they face. America's farmers ship nearly $100 billion worth of crops around the world, and generate 24 million jobs in the United States. But even with these significant accomplishments, the reality is that many Americans aren't familiar with the increasing demands a skyrocketing population has placed on farmers to feed, fuel and clothe the world. Monsanto hopes to change that one person at a time through this new Mobile Experience.

For more information on Monsanto's America's Farmers Mobile Experience or to hear from other American farm families, please visitwww.AmericasFarmers.com.

About Monsanto Company

Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. Monsanto remains focused on enabling both small-holder and large-scale farmers to produce more from their land while conserving more of our world's natural resources such as water and energy. To learn more about our business and our commitments, please visit: www.monsanto.com. Follow our business on Twitter® at www.twitter.com/MonsantoCo, on the company blog, Beyond the Rows, at www.monsantoblog.com, or subscribe to our News Release RSS Feed.

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Floor Statement of U.S. Senator Chuck Grassley 
regarding the Coburn amendment to eliminate the ethanol tax incentive
Thursday, June 16, 2011

Mr. President,

I'd like to speak in opposition to the amendments that we'll be voting on at 2 o'clock today.  The first, an amendment by Senator's Feinstein and Coburn would repeal the incentive for domestically-produced ethanol.  The second, offered by Senator McCain, would prohibit the U.S. Department of Agriculture from using funds for the installation of blender pumps.  These amendments won't lower the price of gasoline at the pump.  These amendments won't lessen our dependence on foreign oil.  They won't create a single job.  They'll do exactly the opposite.

Most importantly, these amendments also won't save the taxpayer any money, because they stand little chance of being enacted.  Even if the amendments were to pass today they won't get out of this chamber.  This bill is not likely to be taken up by the House.  If a revenue amendment is attached to this bill, it will be blue-slipped by the House.  The Constitution requires that revenue measures originate in the House.  So, this bill, with these amendments, is dead on arrival.  It's also dead on arrival at the White House.  They indicated in a statement that President Obama opposes repealing the incentives and is open to new approaches that meets today's challenges and saves taxpayers money.  The votes at 2 o'clock today are a fruitless exercise.  This is political theater.  We've already had this vote, and it was defeated 40 to 59.

Oil is hovering near $100 a barrel and unemployment is at 9.1 percent.  Why is the Senate taking a full week and voting twice on the same amendment that will increase prices at the pump, increase dependence on foreign oil, and lead to job losses?  We should be having this debate in the context of a comprehensive energy plan.  This debate should include a review of the subsidies for all energy production.  We shouldn't be singling out ethanol.  Nearly every type of energy gets some market distorting subsidy from the federal government.  An honest energy debate should include ethanol, oil, natural gas, nuclear, hydropower, wind, solar, and biomass.  When the oil and gas subsidies were targeted last month, the president of the National Petrochemical and Refiners Association stated:  "Targeting a specific industry or even a segment of that industry is what we would consider punitive and unfair tax policy, and it is not going to get us increased energy security, increased employment and certainly not going to lower the price of gasoline."  The same is true for the vote we're scheduled to have today.

In December 2010, Congress enacted a one-year extension of the Volumetric Ethanol Excise Tax Credit, or VEETC, also known as the blenders' credit.  This one-year extension has allowed Congress and the domestic biofuels industry to determine the best path forward for federal support for biofuels.  As a result of these discussions, Senator Conrad and I introduced bipartisan legislation on May 4 that is a serious, responsible first step to reducing and redirecting federal tax incentives for ethanol.  Our bill will reduce and phase out VEETC over a period of a few years.  It also would extend, through 2016, the alternative fuel refueling property credit; the cellulosic producers' tax credit; and the special depreciation allowance for cellulosic biofuel plant property.  Earlier this week, I joined Senator Thune and Senator Klobuchar in introducing another bipartisan bill to immediately reduce and reform the ethanol tax incentive.  It includes many of the same features as the bill I introduced last month, but it enacts the reforms this year.  Senator Thune's approach also leads to significant deficit reduction.  The legislation we've introduced is a responsible approach that will reduce the existing blenders' credit and put those valuable resources into investing in alternative fuel infrastructure, including alternative fuel pumps.  It would also make significant investments in advanced and cellulosic ethanol.  It's a forward looking bill that deserves widespread support. The Thune-Klobuchar bill would responsibly and predictably reduce the existing tax incentive, and help get alternative fuel infrastructure in place so consumers can decide which fuel they'd prefer.  We shouldn't pull the rug out from under this industry that has made these enormous investments.  We need to provide a transition.

I know that when American consumers have the choice, they will choose domestically produced, clean, affordable renewable fuel.  They'll choose fuel from America's farmers and ranchers, rather than oil sheiks and foreign dictators.  Both of the ethanol reform bills I mentioned are supported by the ethanol advocacy groups.  In an almost unprecedented move, the ethanol industry is advocating for a reduction in their federal incentives.  No other energy industry has come to the table to reduce their subsidies.  No other energy lobby has come to me with a plan to reduce their federal support.  The best way to get deficit reduction that gets to the President's desk is a responsible transition, like the one offered by Senator Thune.  Otherwise, this exercise today is a waste of time. This vote will simply put many members of this body on the record in support of a $2.4 billion tax increase.  I would encourage those who want to reduce the incentive and save taxpayer money to work with Senator Thune and Senator Klobuchar, and the rest of us on a responsible transition that has a chance of being enacted.  I therefore urge my colleagues to oppose these two amendments and to consider this fact check on statements that the sponsor of the amendment has made on the Senate floor:

Senator Coburn's statement:

"We can save $3 billion if we eliminate the VEETC blending subsidy."

In fact:

There are a lot of numbers thrown around about how much this incentive costs and how much Senator Coburn's amendment would save.  I have a letter from the Joint Committee on Taxation with a score of Senator Coburn's amendment.  The fact is, the amendment, if enacted on July 1, 2011, would increase revenue to the federal treasury by $2.4 billion.  Not $3 billion as the author has stated.  Again, the Coburn amendment, if enacted on July 1, would save $2.4 billion.  That's from the Joint Committee on Taxation.

Senator Coburn's statement:

"All the blenders of gasoline in the United States - all of them - have called and written and said:  We do not want the $3 billion for the rest of the year."

In fact:

I have a letter from the Society of Independent Gasoline Marketers of America or SIGMA, to the Senate Majority and Minority Leaders, opposing efforts to prematurely or abruptly eliminate the blender's credit.  That letter states, "As the leading marketers of ethanol-blended fuel at the retail level, SIGMA's members and customers are the beneficiaries of VEETC.  Simply put, SIGMA opposes recent moves to prematurely or abruptly end the subsidies without any consideration for future fuel and fuel-delivery costs.  To end this incentive immediately would no doubt result in an immediate spike in consumers' fuel costs."

I would also like to point out another fact to the Senator from Oklahoma about the National Petrochemical and Refiners Association, which sent him the letter calling for a targeted tax hike on ethanol production.  This organization, which is lobbying for the repeal of the ethanol incentive, also led the charge against raising taxes on the oil and gas industry just last month.  The president of the National Petrochemical and Refiners Association stated: "Targeting a specific industry or even a segment of that industry is what we would consider punitive and unfair tax policy, and it is not going to get us increased energy security, increased employment and certainly not going to lower the price of gasoline."  He could have just as well been referring to the targeted tax increase on ethanol use.

Senator Coburn's statement:

"According to the U.S. Department of Agriculture, 40 percent of last year's corn crop was utilized, converted to ethanol."

In fact:

One bushel of corn produces nearly 3 gallons of ethanol and 18 pounds of high value animal feed.  In 2010, 4.65 billion bushels of corn were used to produce 13 billion gallons of ethanol.  But, ethanol production uses only the starch from the corn kernel.  More than one-third, or 1.4 billion bushels of dried distiller's grain was available as a high-value livestock feed.  On a net basis, ethanol production used only 23 percent of the U.S. corn crop, far less than the 40 percent that Senator Coburn claims.  According to USDA, feed use consumed 37 percent of the U.S. corn supply, much more than the 23 percent consumed by ethanol production.

Senator Coburn's statement:

"The American people ought to take into consideration when they go buy a gallon of fuel today - you already have $1.72 worth of subsidy in there.  It does not have anything to do with oil and gas drilling."

In fact:

I believe Senator Coburn is referring to a report from the Congressional Budget Office.  For the record, that report relied on the questionable assumption that only a tiny fraction of ethanol consumption is attributable to the ethanol tax credit.  Regardless, I'm glad he raised this point about subsidies and oil and gas drilling.  Our colleagues may be interested to learn of the hidden cost of our dependence on foreign oil.  A peer-reviewed paper published in Environment Magazine in July 2010 concluded that "...$27 to $138 billion dollars is spent annually by the U.S. military for protection of Middle Eastern maritime oil transit routes and oil infrastructure, with an average of $84 billion dollars per year."  Milton Copulos, an advisor to President Ronald Reagan, a veteran of the Heritage Foundation, and head of the National Defense Council Foundation testified before Congress in 2006 on the "hidden costs" of imported oil.  Mr. Copulos stated that by calculating oil supply disruptions and military expenditures, the hidden costs of the U.S. dependence on petroleum would total up to $825 billion per year.  This military expenditure is equivalent to adding $8.35 to the price of a gallon of gasoline refined from Persian Gulf oil.  There is no hidden U.S. military cost attributable to homegrown ethanol.

Senator Coburn's statement regarding oil and gas subsidies:

"There is a big difference between a subsidy that is a tax credit and allowing someone to advance depreciation because they are going to write it off anyhow.  The net effect to the Federal Government's revenue, if you take all of those away, is still zero."

In fact:

A September 2000, report by the Government Accountability Office concluded that the federal government has granted tax incentives, direct subsidies and other support to the petroleum industry.  They describe tax incentives as federal tax provisions that grant special tax relief designed to encourage certain kinds of behavior by taxpayers or to aid taxpayers in special circumstances.  According to the Government Accountability Office, the tax break allowing for the expensing of intangible drilling costs began in 1916.  The percentage depletion allowance was enacted in 1926.  The GAO estimated that these two tax incentives led to a revenue loss of as much as $144 billion from 1968 until 2000.  That's a far cry from the zero revenue affect that Senator Coburn claims.  These are GAO's words and figures.  They refer to them as tax incentives that resulted in the loss of more than $100 billion dollars to the federal treasury over that 32 year period.  I've heard Senator Coburn on the floor on many occasions talking about the dire fiscal situation our country is in.  Yet, on this issue, it sounds like he's arguing about semantics.  One is a "subsidy" yet the other is a "legitimate business expense."  I'm not sure that this argument over terminology will give our children and grandchildren much comfort when they're picking up the trillion dollar tab over the next couple decades.

Senator Coburn's statement:

"Corn prices are at $7.65 a bushel.  They are 2½ times what they were 3½ years ago."  Ethanol "has been, this last year, the significant driver."

In fact:

Grain used for ethanol accounts for approximately 3 percent of the world's course grain.  And, because of increased corn production, the amount of grain available for non-ethanol use is growing.  In 2000, there was 2.4 billion metric tons of grain available for uses other than ethanol.  Even with the growth in the ethanol industry, last year there was 2.6 billion metric tons of grain available for uses other than ethanol.  It's also important to review the cost of corn in retail food prices.  At $7.40 a bushel, the corn cost in a gallon of milk is about 46 cents.  The cost of corn in a pound of chicken is 34 cents.  One pound of beef takes 92 cents worth of corn.  One pound of pork requires 39 cents.

 

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