GRASSLEY: ... to get these issues addressed. And, quite frankly, I believe that Secretary Vilsack has spoken publicly on this issue. Particularly, one of the early speeches he gave in Georgia, he referred to this issue.
I believe he's committed to taking action, but I think congressional oversight dictates that Congress ought to be looking at it as well just so that all of the people at the Department of Agriculture knows that we're still -- have concern about this as well as the concern that Secretary Vilsack has raised that I think he's sent a clear signal he's going to do something about.
I'm ready for questions, and I'll start with Dan Looker.
OK. Then let's go to Tom at Yankton.
Then go to Gene at Iowa Farmer Today.
QUESTION: No questions. Thank you.
GRASSLEY: OK. Tom Steever, Brownfield?
QUESTION: Back to the subject of the letter to Senator Harkin, were there some specific instances that prompted you to take action or to get additional attention to this?
GRASSLEY: Well, the answer is I suppose this all started in the Clinton administration with the Pigford claims. When they weren't given the proper attention by the Department of Agriculture, a lot of people that should have probably had case heard were not heard.
Pigford doesn't give them any sort of adjustment, but it does give them one more bite at the apple at the court. And so that issue has been holding fire.
But we have also had constant reports that people that have been assistant secretary for civil rights maybe haven't been doing their job. We've had government accountant studies or inspector general reports that have indicated that they may not be functioning the way they should and probably with the independence that they should.
And it seems that there's always been a reluctance to emphasize this issue. And you might wonder why I was interested in it so much because we probably don't have more than a handful of African-American farmers in Iowa. And it's because I'm -- at that time, I was the only farmer in the Iowa legislature, and -- I mean, in the Congress or at least in the Senate.
And from that standpoint, a person that I had a close working relationship with in the Clinton White House asked me to get involved in it because I understood agriculture. So that's been my involvement, maybe, over the course of about ten years.
Now, we also have, in regard to this letter, Harkin agreeing over a year ago that the issue was important. But it wasn't attended to not because of his fault but because we were in the middle of the Farm Bill and we didn't have an opportunity to do anything else.
Now that the Farm Bill is done, I'm bringing this to Senator Harkin's attention, and I don't have any doubt that he'll give it the proper attention.
Let's see. That was Tom. I go to Ken Root.
QUESTION: Senator, good morning.
GRASSLEY: Good morning.
QUESTION: I wonder if you could address the EPA ruling on global warming through the Clean Air Act of what is, in your view, required now. Is it going to be that EPA will regulate or Congress will legislate to deal with the global warming issues brought on by animal and crop agriculture?
GRASSLEY: Yes. Well, the last one is kind of difficult to answer, but the first one is more of a process. And I believe, according to a Supreme Court decision a couple years ago, that EPA can do all this stuff without law of Congress.
But there's a strong feeling that it would be better for Congress to handle it because it would have more flexibility. But without Congress acting, EPA could act. And with the capability of EPA acting, I suppose it puts more pressure on Congress to act.
But if I could give my view about global warming, I've been more of an advocate for doing it through international treaty for the reason that international treaty would, presumably, have a level playing field for the economy of the United States because, presumably, you'd involve China in it. And China is the most prolific emitter of CO2 anyway.
And so it should -- since CO2 regulation and the emitting of it doesn't respect political boundaries and it affects the entire globe, it seems to me we've got to get all the countries involved. So you have a situation, whether it's for agriculture you ask or for manufacturing -- and maybe more for manufacturing and utilities than even for agriculture -- you would not have a level playing field if Congress acts or if EPA acts on their own because you're going to have more outsourcing of manufacturing to other countries. And China would be one of them because, if China doesn't have any requirements to emit less, you know, then a lot of manufacturers are going to free to that country.
So it seems to me we want to protect jobs in America. We want to protect the American economy. We want to keep our economy strong. And we, most importantly, want to keep it competitive with international competition that we shouldn't be doing something just by ourselves.
Now, the argument goes that we're negotiating internationally, but the United States ought to set an example and move forward on its own. But let's just suppose we don't get an international agreement. Then we've got laws giving our economy an unbalanced playing field with China.
Now, in the case of agriculture and global warming, since we're so energy -- so energy dependent in agriculture compared on other parts of the economy, it's going to be very, very expensive on American agriculture if agriculture is not exempted or, more importantly, if we don't get credit for what we've already done through minimum tillage, through less -- more efficient use of energy in agriculture, and greater production per acre than what we've ever done before. If we don't get some credit for it, it's going to be very punitive -- not just harmful to agriculture, but it's going to be punitive to agriculture because there's been so many changes in agriculture over the last 20 years, not just minute tillage but increased production and things of that nature, that farmer are doing that have already cut down on CO2 that we ought to have credit for that I don't get a sense out here that EPA is willing to give credit to agriculture.
GRASSLEY: Now, overall, affecting all of America, when you talk about a cap-and-trade tax and mostly on utilities, it's a tax -- it's a light switch tax every time you turn on your lights or anything else that's electric driven and, particularly, if it comes from production of coal -- and 55 percent of our electricity does come from the production of coal -- then it's going to amount to a $3,000 tax per family of four, which is very prohibitive and very negative towards economic growth.
Then people want to cut down on the use of energy -- well, if we're going to have an expanding economy, we have to use more energy. And, sure, that can be cleaner energy, but that's down the road 30 years. What are we going to do between now and then? Export all of our manufacturing jobs to China? I hope not.
And if we have an international agreement with a level playing field for our economy, we won't be shipping jobs overseas.
Did I answer your question?
QUESTION: It sounds like you've got a speech for the floor of the Senate, sir.
GRASSLEY: I will be giving it some time when this issue comes up, yes.
QUESTION: Thank you.
QUESTION: Yes, Senator. I have two follow-up questions to that.
One, as you said that the EPA actions under the Clean Air Act puts more pressure on Congress. And the question is, does it put enough pressure on Congress that -- or on the Senate in particular, that you would pass a cap-and-trade bill even if you didn't have international agreement that included China and India? That's question number one.
Question number two is I wanted to talk a little more about getting credit for past yield increases. Are you talking about -- explain more fully what you -- what you want there.
GRASSLEY: OK. Well, first of all, in regard to the first question, a couple weeks ago, I read a quote by Senator Durbin that it wouldn't be coming up this year, but he didn't say it wasn't coming up at all. He didn't say how difficult it would be. He just simply said that they didn't have 60 votes to bring it up at this time.
Now, I wonder, since the EPA has acted, if that hasn't changed the dimensions of that and maybe caused him to change his mind in the agenda of the Senate. But I don't have an answer to that.
Let's get back to square one. You know, when you plow with moldboard plows and you do a lot of tillage, you put more carbon in the air. In fact, if you -- just to remind you of that issue, that's kind of involved with the indirect land use component of this review of whether ethanol is environmentally positive or negative because if you plow up virgin soil down in Brazil, it puts carbon into the air.
So, OK. In the last 20 years, there's been such a movement towards minimum tillage. And with minimum tillage, there's less use of energy, so less CO2 in the air. And I think -- I think we have to make sure that industries that have already taken action emitting less CO2 into the air ought to be given some credit for it.
Now, I don't know that -- that people are thinking in terms of that. I know people in agriculture are thinking in terms of that, but I don't know whether Barbara Boxer is or not. But I think it's -- it's got to be a determination if you're not going to make just very expensive for agriculture to operate with this cap-and-trade tax that's out there.
OK. Anybody else want to jump in?
QUESTION: This is Dan at Spencer.
GRASSLEY: Yes. Go ahead. I'm sorry. You weren't circled here, but you're sure circled now. Go ahead.
QUESTION: I wanted to ask you -- the president, yesterday, made some comments about saving money nationally and he mentioned agriculture. Two things specifically, one would be closer -- more closely monitoring the 500,000 AGI rule for farm subsidies. The other was consolidating some offices and services under USDA.
Are those objectives politically doable? And do you have any idea what sort of timeline that might follow?
GRASSLEY: Well, the FFA mergers have been around for a long period of time, and I suppose you'd have to say they're always viable. There are things that we have not found very viable for the state of Iowa, but I wouldn't want to say that, in any bureaucracy any place that there aren't some efficiencies that can be made.
In regard to the first point, it's not viable because they leave out the word "adjusted." If you want to help, to some extent, save money, it would impact different people different ways. But if might do the same thing as my $250,000 cap would do, but you can't use gross income at all.
And so -- oh, I misunderstood your question. My staff heard it better than I did.
You're talking about the $500,000 -- more strict enforcement of the $500,000 of just did gross income that's non-farm income?
QUESTION: The proposal to work with the IRS to verify that.
GRASSLEY: Yes. But I don't know -- that's already legislated. So I don't know how you're going to get any more savings out of that. But it's going to bring about savings, yes. But I can't give you a figure. I'm sure we had a figure last spring when we were working on the Farm Bill, but I don't have it in my head.
QUESTION: The White House is saying $16 million a year. But any idea when farmers might actually see some sort of communication from USDA?
GRASSLEY: Well, they've already had. For instance, you know, I had to fill out some forms for the FFA office in Butler County about what my income was over the last three years, I think. And that's associated with that because you -- in my -- in my particular case, you know, it was both non-farm income as well as farm income.
And we won't have to show them our -- our income tax forms, but we will have to give them permission to check with the IRS about whether or not I'm over that figure and then would not be entitled to any payments.
And in the case of farm income, it's $750,000. And that would be just cut back on direct payments. In the case of the $500,000 non-farm income, you wouldn't be entitled to be in the program at all.
OK. Anybody else?
QUESTION: Senator, this is Dan Looker. I apologize. I got on the call late.
QUESTION: I wanted to ask your response to a comment that a farmer made last week regarding the indirect land use issue. His name is Ray Gasser. He's with the American Soybean Association. And the ASA put out a little press release quoting Ray saying that he had talked to you about the -- his concerns and the ASA's concerns about whether and how EPA will use indirect land use when they issue the rule for the renewable fuel standard this year.
And he's quoted saying Senator Grassley is definitely on top of the indirect land use issue and I -- Gasser -- told him we will need to help to either get the White House and EPA to revise the rule or else legislate a fix.
Well, I just wondered, first of all, if that's accurate. And second, if you have some thoughts about how that would be done to either get EPA to revise the rule or to get Congress to legislate a fix.
GRASSLEY: The answer is it is an accurate quote, an accurate reaction. And it didn't only come up at that town meeting; it came up at a few other town meetings as well.
And I -- I did not give very much hope to affecting clean water acts or clean air acts, to opening them up. Under both Republicans and Democrats, there wasn't much of a willingness to open up.
I would only say that you could possibly do something in that area. It was almost a consensus, the sort of thing to do it. And I doubt if you could get that sort of consensus because you've got -- quite frankly, you've got the oil industry wanting that indirect land use thing in there, and you've got other interests, not all environmental, that want it because -- not because it makes sense but because it's punitive to ethanol and biodiesel.
So what we're going to have to do is -- I guess I expressed this at one of my town meetings -- you hope to embarrass these bureaucrats into just how non-common sensical or lack of common sense there is in their statements or in their proposed rules just as if, you know, how ridiculous it is in two ways.
One, that there's some farmer sitting in Brazil just waiting to plow up another acre of land because Chuck Grassley might sell another 170 bushel of corn to an ethanol plant that wouldn't otherwise be sold. And that's ridiculous in and of itself. The second -- because there isn't farmers sitting down in Brazil just waiting to do that. And the other thing is how ridiculous is it that American farmers ought to be punished because of something that's happening in Brazil. It just doesn't make sense. And, you know, it was more recently an issue in London -- I mean, in England where last week or so, they made a decision that a certain amount of biodiesel ought to be included in their diesel mixture. And then the -- some environmental group over there or maybe over here, who knows -- I forget which one it was -- brought up this issue about indirect land use.
And so it's not an issue just in the United States; it's an issue in a lot of other countries. But it's driven by the oil industry that wants to hurt biofuels. And it's driven by environmentalists that don't understand the reality of economics.
QUESTION: Just to follow up, do you have some evidence that it's driven by the oil industry? It certainly sounds plausible, but do you have any smoking gun there?
GRASSLEY: I don't know whether it's in regard to that issue. But another ethanol issue where recently grocery manufacturers, environmentalists, and oil companies were raising -- I guess it wasn't on that issue. I think it's on the one on E-11, 12, 13, 14, 15 where those interests, including oil, are fighting EPA going any higher.
GRASSLEY: But it's all tied together. Don't kid yourself. We've been fighting oil -- except for the years of 2005, every energy bill that's come up involving ethanol, we've been fighting big oil.
GRASSLEY: You know, because they don't control every aspect of it. So I have invited them to buy some Iowa farm land and grow some corn and be involved in the oil wells of Iowa -- the energy wells of Iowa the same way they're sucking their energy out of the deep holes of Mother Earth.
QUESTION: OK. Well, just to recap then, you see influencing EPA as a better strategy than trying to find consensus in Congress to revise the Clean Air Act?
GRASSLEY: I think it's more practical, more hopeful. But I would -- in Washington, you do -- you keep more than one ball in the air. And I would -- I will assume we'd try it all ways.
QUESTION: OK. Thank you very much.
GRASSLEY: Anybody else?
QUESTION: Yes, Senator. Gary Digiuseppe.
QUESTION: Sorry, I came in late and you've probably already addressed that. I also saw your release on it. But I wonder if you could talk about your arguments for approving or taking action on the Korean Free Trade Agreement.
GRASSLEY: Yes. Well, at this point, Senator Baucus and I support the Free Trade Agreement except in two areas; one that's very important to me and then two that are very important to him.
And I don't want to say that the second one is not important to me, but I think we -- I don't think so it's as bad as some people are making it out. And that's the automobile one. The other one where we have mutual interests is beef. We are sending a signal that the president ought to be pushing on that, but we also ought to be getting to a free trade agreement. So I think Senator Baucus has separated himself from the rest of his party that's pretty protectionist on the importance of free trade.
QUESTION: Are you saying that the agreement needs to be renegotiated before it can be acted upon?
GRASSLEY: I think in the case of beef, it's more clarification. And in the case of cars, it would be some renegotiation.
QUESTION: OK. Thank you.
GRASSLEY: Yes. For anybody that's still listening, I suppose I ought to say that I'm not going to sell my farm to big oil, but, you know, it's kind of tongue in cheek, but it seems to me that I -- I resent them in any way that we're trying to solve our energy problems when they say we have energy problems that they ought to get with it.
Thank you all very much for participating.