Radio Interview: Congressional Agenda

Dave Ladd, President of RDL & Associates, was recently a guest on the Linder Farm Network to provide a brief update regarding the congressional agenda as it relates to agriculture.  Mr. Ladd can be contacted at daveladd66@gmail.com for additional details.

The interview can be accessed here: https://soundcloud.com/rdl-associates/linder-farm-network-overview-of-congressional-agenda-september-2015

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Issue Update: North Dakota Court Issues “Waters of the United States” Preliminary Injunction

The Obama Administration’s Waters of the United States (WOTUS) rule that defines “normal farming practices” for purposes of the Clean Water Act has gone into effect for the majority of the country. Despite a long trail of litigation and numerous lawsuits that include challenges from more than two dozen states and 12 organizations in five separate cases that have been filed throughout the United States, one of the Obama administration’s most unpopular regulations became law July 28, 2015.

According to the Environmental Protection Agency (EPA) and Army Corps of Engineers, the final rule “provides clarity over which waters are protected under the Clean Water Act. The rule is grounded in law and the latest science, and is shaped by public input. The agencies also contend the rule does not create any new permitting requirements and maintains all previous exemptions and exclusions.

Stakeholders in opposition to the final WOTUS rule see the issue differently. Most, if not all, believe that agriculture’s concerns were addressed in the final rule, coupled with the belief that the EPA and the Army Corps of Engineers actually added components that weren’t initially proposed for public review and comment in the proposed rule. This includes making prairie potholes jurisdictional under the rule on a case-by-case basis as they are “similarly situated.

Although courts in West Virginia and Georgia denied an injunction claiming they did not have jurisdiction, Chief Judge Ralph Erickson of the District Court of North Dakota issued a temporary injunction requested by North Dakota and 12 other states to temporarily block the rule from going into effect.

In issuing the preliminary injunction, Judge Erickson found that states are facing imminent and irreparable harm and that the states are likely to succeed on the underlying lawsuits based on the idea that the agencies violated the authority granted by Congress. He also noted that the Administration failed to follow Supreme Court precedent, comply with Administrative Procedures Act requirements and that the final rule was not a logical outgrowth of the proposed rule.

Judge Erickson’s ruling will remain in effect as long as litigation persists but can be overturned by another court at any point during the legal proceedings.

After the court ruling, the EPA again “doubled down” by releasing a statement that said the injunction only applies in the thirteen states that filed for it; Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming.

The decision by the EPA to move forward with implementation in states not covered by the preliminary injunction solidified the strong opposition to the rule by key agricultural stakeholders, including the American Farm Bureau Federation (AFBF), the National Association of Wheat Growers (NAWG), the National Corn Growers Association (NCGA), and the National Cattlemen’s Beef Association (NCBA).

“The EPA’s new rule places farmers in the agency’s crosshairs for using the same safe, scientifically sound and federally approved crop protection tools they’ve used for years,” said AFBF President Bob Stallman said. “This rule creates a new set of tools for harassing farmers in court, and does it all with language that is disturbingly vague and subject to abuse by future regulators. It’s worth saying again: The EPA needs to withdraw this rule and start over.”

Colin Woodall, Vice-President of Government Affairs for NCBA added “We think this is another great example of the arrogance of the EPA trying to find any way to move this forward and I think this is more about their agenda than it is about clean water.”  He also noted that Army Corps of Engineers memos have surfaced where even the Corps disagreed with the way EPA has manipulated the data. According to Mr. Woodall, they wanted their name and any association with this rule pulled back.

Although lawyers for agricultural stakeholders believe the ruling out of the North Dakota District Court means the Environmental Protection Agency (EPA) cannot enforce the WOTUS rule nationally, In the Administration’s view, the rule has gone into effect in 37 states, including Minnesota.

Although some policy experts are of the belief that the EPA could wait to fully implement the rule until the subject is off Congress’ radar, that scenario appears unlikely in the foreseeable future. Ongoing opposition from influential stakeholders, ongoing litigation, the upcoming elections, and bipartisan resistance in Congress will likely keep the issue alive. For example, congressional action to mitigate the Administration’s ability to implement the final WOTUS rule consist of both an appropriations and a policy strategy.

Maps prepared by Geosyntec Consulting show the potential impact of the final WOTUS rule in relation to total acreage. The maps can be accessed by visiting http://www.fb.org/issues/wotus/resources/.

Copyright © 2015 RDL & Associates, LLC. All rights reserved.

Radio Interview: Update – Waters of the United States Rule

Dave Ladd, President of RDL & Associates was recently a guest of KTLF Farm Director Scott Colombe to discuss recent developments related to the recent court ruling regarding the Waters of the United States rule.

For additional information, please contact RDL & Associates at (651) 247-5458 or via daveladd66@gmail.com

The segment is 12:59 in length and can be accessed here: https://soundcloud.com/rdl-associates/ktlf-radio-wotus-august-2015

Commentary: Millennials Start Adulthood With A Maxed Out Credit Card (Sven Larson, Ph.D., Economist)

Life is a challenge for Millennials, especially those born in the later years of that generation.  Today’s 20-somethings have grown from childhood to young adults during the worst economic recession in four generations.  They spend their teenage years swimming upstream against a nasty undercurrent of pessimistic economic news.

Now they are ready to take on adult life.  College or not, it is time to start thinking about those life chores called family, mortgage, life insurance…

And that credit card their parent’s maxed out in their children’s name.

Wait – what credit card?

The federal debt.  Yes, exactly.  It may not look like a credit card, and those who got their hands on it certainly did not go through the usual credit scrutiny.  But that changes nothing: the national debt still works as an inter-generational credit card.

The parent’s of the Millennials have used the federal government’s credit line to buy themselves entitlements that they otherwise could not afford.  Half a century of almost uninterrupted budget deficits have built a debt pile higher than our GDP.

Over and over again, Congress has increased its own credit line, in other words raised its debt ceiling.  It looks like they will do it again in October.  Imagine the parents of the Millennials calling the credit card company for yet another credit line increase.  Imagine them adding the icing on the cake by asking that “Oh, and by the way, send the bill to our kids”.

If I were a Millennial, I would be outraged by this.  It is immoral and disrespectful to expect others to pay off your debt.  Not to mention the big hole the cost of this debt will dig in the finances of coming generations.

This last point is crucial.  Suppose Millennials Jack and Jill get married and start working at 25.  Their first-year earnings total $65,000.   They earn average college-graduate salaries throughout their 40 years in the labor force.

They have the usual stack of bills every month: student loans, food, cell phones, utilities, a car payment, insurance.  If they are lucky they can save a little bit for a house when their first child is born.

Now comes the bill for the national debt.  Suppose the debt only increases with inflation over the next 40 years and – miraculously – the interest rate is frozen at three percent.

Time is now for Jack and Jill and every other taxpayer to pay their share of the interest cost on the national debt.  Suppose it is collected as a proportionate “interest tax” on every working American.

Jack’s and Jill’s share?   $11,800 per year.  That equals 18 percent of their pre-tax household income.

Before any other expenses.

With average careers Jack and Jill will make a combined lifetime income of $5,756,000.  Out of that income they will pay $1,046,000 in “interest tax”.

What do they get for all that money? Nothing.  Unlike any other tax, this “interest tax” does not go toward services that government provides here and now.  It is a cost for spending that previous generations have enjoyed.

One could object that this is a stylized example.  The cost of interest on the federal debt is covered with general tax revenue, and is therefore not as easily identified as a direct cost for an individual household.  But this is a moot point.  We all pay all federal taxes, either directly like the personal federal income tax, or indirectly by giving up some earnings so that our employer can pay corporate income tax.

Either way, the average Millennial family will have to fork over more than a million dollars over their lifetime just to pay interest on the federal debt.  We have not even considered the costs of paying down the debt – and that means that when Jack and Jill retire they will hand over the responsibility for the “interest tax’ to their children.

Crazy, is it not? Yes, it is.  But it is also the future that the Millennials are facing.

Unless, of course, they decide to put an end to endless Congressional borrowing.  A good start of that would be to join the fight for a balanced-budget amendment on the U.S. constitution.

Sven Larson, Ph.D., is an economist and Member of the Council of Scholars of Compact for America.  He is the author of Industrial Poverty (Gower Publishing) about the debt crisis in Europe.