Election Day is November 6 and Iowa is a swing state in the presidential race. Iowa could go either way. Polls show the race remains quite tight nationally. Why should Iowa farmers vote for Republican Mitt Romney for president of the United States? Why should they vote for Democrat Barak Obama?
Wallaces Farmer in an interview earlier this week asked that question of Mike Johanns, the Republican U.S. Senator from Nebraska, who served as Secretary of Agriculture under President George W. Bush. Johanns is a spokesman on agricultural issues for the Romney campaign. We also recently spoke to and listened to current U.S. Secretary of Agriculture, Tom Vilsack, speaking in Des Moines, telling voters why they should re-elect President Obama. Vilsack, of course, is the main spokesman for the Obama administration's agricultural policies.
On Tuesday October 9 former Massachusetts governor and now GOP presidential candidate Romney was in Iowa to present his agricultural policy. Appearing at a campaign rally at a farm near Van Meter, just west of Des Moines, Romney spelled out what he calls his vision for making the U.S. ag economy grow and prosper. At that event his campaign released a policy paper detailing what his campaign calls Romney's "plan for a vibrant rural America."
The policy paper lists Romney's agenda for rural America as having four main goals: 1) Implement effective tax policies to support family farms and strong agribusiness; 2) Pursue trade policies that expand upon the success of the ag sector, not limit it; 3) Create a regulatory environment that is commonsense and cost effective; 4) Achieve North American energy independence by 2020. You can read the entire Romney plan for agriculture here.
Romney says it is time to eliminate the federal estate tax
What is the strongest point in Romney's agricultural plan he would implement if elected president? "The plan has a lot of good points," Johanns told Wallaces Farmer, in the interview. "The one getting the most attention is tax policy. Compare Governor Romney's tax plan to President Obama's, look at the estate tax, for example. President Obama wants to return to the 2009 structure with a $3.5 million exemption for individuals and a 45% rate. Obama has even endorsed legislation that would have that rate as high as 55%. Governor Romney is calling for the estate tax to be outright repealed."
Currently, the estate tax is levied at a 35% rate and exempted on property that is worth less than $5.12 million for individuals. But the current tax law is scheduled to expire at the end of 2012. Starting January 1, 2013 the estate tax exemption is scheduled to drop to $1 million, while the rate will rise to 55%--unless Congress acts before the present tax law expires at the end of 2012. While a tax hike of that magnitude isn't what the Obama administration wants, the president does favor returning to the 2009 estate tax law which had a $3.5 million exemption for individuals and a 45% rate.
"That would be devastating to many people across Iowa and the country," says Johanns. "Mitt Romney's position is this: Why should the government tax you for your whole life? Why should we make death a taxable event? That one single accomplishment—completely doing away with the federal estate tax--would be a remarkable step forward. The average farmer in the U.S. is now around 60 years old. There is going to be a huge transfer of farmland in the not too distant future. Mitt Romney wants that farmland to go to the next generation of farmers. He doesn't want to see farmland have to be sold by a farm family to raise enough money to pay the estate tax."
What is Romney's position on biofuels and the Renewable Fuel Standard?
Question #2 for Johanns: What does candidate Romney think of the Renewable Fuels Standard? The RFS mandates a certain minimum amount of ethanol and biodiesel be used by fuel blenders and sold in the marketplace in the U.S each year. Some people think the RFS should be scrapped, others think it should be kept in place.
"The Romney agricultural plan is very sold on biofuels," says Johanns. "And his entire energy plan makes sense. As for the Renewable Fuel Standard, Romney says we need to keep it."
Johanns adds, "Iowa is the leading state in the nation in ethanol production. The people of Iowa understood ethanol before anyone else did. And put a lot of their money at risk as they invested in building ethanol and biodiesel plants. Iowa is the nation's corn production leader and people knew we needed an additional market for the tremendous amount of corn we produce each year. Ethanol as a motor helps reduce our nation's reliance on foreign oil, is cleaner burning than gasoline and is good for the environment. Same can be said for biodiesel, which is made from soybean oil, corn oil, animal fats from meat packers and even the cooking grease gathered from restaurants."
"Biofuels have an important role in our nation's future," says Johanns. "They are just one piece of the answer to solving our nation's energy problems but they need to and will, play an important role. Candidate Romney firmly says he would keep the RFS if he is elected president."
The RFS is not only important for corn, but also for the next generation of renewable fuels, such as cellulosic ethanol, adds Johanns. "The U.S. is developing cellulosic ethanol which can be made from cornstalks and other biomass. But we need to make sure there is going to be a market for cellulosic ethanol, so people will then invest in plants and equipment needed to produce it."
Romney doesn't favor keeping federal tax credit for wind energy
Question #3—We asked Johanns what Romney's position is on the wind energy tax credit that goes to producers of electrical power from wind. Wind farms now dot the landscape of Iowa and several other states. And several companies that manufacture those big towers and the turbines that are on top of them are in business in Iowa. Around 7,000 people are employed in Iowa's wind energy industry. Farmers lease land to the utility companies which erect wind turbines amidst corn and soybean fields to generate electricity. About 20% of Iowa's electricity generation now comes from renewable, environmentally friendly wind power.
"Mitt Romney supports wind as part of the overall renewable energy plan for the United States," says Johanns. "However, he is not in favor of continuing to use the federal tax credit as a way to get people to invest in wind energy to get more wind turbines built in our nation. But I would ask voters to look seriously at his tax plan as part of this issue, and you will begin to understand where Romney is headed. He is saying we need to get our federal spending under control. We need to keep tax rates low to help stimulate investment in industries and companies and to provide jobs for workers."
Under Romney's plan, if you make $200,000 or less adjusted gross income, then you're not going to have a capital gains tax, says Johanns. If you make over that, Romney wants to keep tax rates low. It's a tax policy that says to investors, "if you rely upon the future of our country then you don't have to worry about whether this credit or any tax credit gets granted or extended for a year," says Johanns. "Keeping income tax rates and capital gains taxes low is a solid plan which will encourage investment. Today, the United States has a federal tax code which makes no sense to anyone. It is filled with tax credits, other tax breaks and all kinds of loopholes. It is complicated. So I say to people, look at the whole plan. Let's stimulate the wind industry and other businesses by using a more sensible tax structure as an incentive."
How would Romney, if president, cut farm program spending?
QUESTION #4: Some people are concerned that Romney if elected president would cut such a large amount from federal farm programs and farmers would no longer have a farm financial safety net. "Federal spending is out of control and all sectors will likely have to give up something to help balance the budget," says Johanns. "Crop insurance, used as a risk management tool, will replace some of the traditional farm subsidy programs. Candidate Romney says let's get a farm bill done and let's get it right. I'm very assured by the Romney plan that it supports the interests of farmers and agriculture."
Also, "Romney says lets have trade agreements with foreign nations to help keep export markets strong for U.S. farm products and lets allow the World Trade Organization to enforce those agreements," says Johanns. "And let's have an 'all of the above' energy strategy that makes sense and supports renewable fuels grown here in America. Farmers want to earn their income in the marketplace rather than from the government."
Johanns says Romney wants to reduce the number of regulations hindering agriculture which the federal government keeps coming up with. "The Obama administration has tried to impose unneeded and unworkable regulations, from efforts to regulate dust to kids working on family farms," says Johanns. "It's a long list of regulations they've either imposed or tried to impose on farming and agriculture. Mitt Romney would reverse that trend."
Ag Secretary Tom Vilsack highlights President Obama's support for farmers
U.S. Secretary of Agriculture Tom Vilsack says President Obama has a strong record of supporting farmers, ranchers and rural America. Vilsack points out that agriculture is thriving today. Record farm income, record ag exports and declining rural unemployment all demonstrate the strength of the president's support of rural America.
There is a record amount of biofuel production. The Obama administration recently announced new renewable fuel standard targets that will increase biodiesel production, a decision praised by Iowa soybean growers. The administration has increased the amount of ethanol that can be legally blended into gasoline. "President Obama remains a consistent supporter of the biofuel industry," says Vilsack.
President Obama's export initiative resulted in USDA establishing a new strategy for expanded trade in ag products. As a result, the last four years have brought record sales of ag products to foreign customers. Vilsack says the best is yet to come now that the Obama administration has finalized free trade agreements with South Korea, Panama and Colombia. The president negotiated stronger agreements that helped to save good paying jobs, including those that make farm machinery here in Iowa.
Obama administration responded quickly to provide drought help
During this year's drought President Obama instructed his administration to do everything possible to help struggling farmers. "Immediately, flexibility was created with millions of acres of CRP land to allow livestock producers access to needed forage," notes Vilsack. "Over $150 million in purchases of pork and poultry were authorized to keep prices stable for producers, interest rates on emergency disaster loans from USDA were reduced to help make credit affordable for farmers. Over $40 million was made available for emergency conservation efforts to help livestock producers."
Increased efforts to help young people get started in farming are being carried out by the Obama administration. "This administration has extended a record amount of credit to beginning farmers and ranchers through USDA Farm Service Agency loan programs," says Vilsack. "Credit is crucial for those getting into farming and no administration has a better record in making that credit available."
Obama administration's position on estate tax, ag regulations, farm bill
Some Republicans have suggested that President Obama supports raising the federal estate tax on farms. That's not true, says Vilsack. "President Obama supports raising the exemption levels to protect family farms from being sold to pay estate taxes. The president does not support raising the estate tax on farms."
Some Republicans are also saying the Obama administration is attempting to "regulate farming out of business" by implementing more regulations imposed by the Environmental Protection Agency, U.S. Department of Labor, etc. Vilsack says that isn't true. EPA regulations are to comply with existing laws and he says the administration is working with various farm and other groups to implement them fairly without running farmers out of business.
With regard to the proposed tightening of farm labor laws for the safety of teenagers working on farms, the administration fielded public comments and feedback. President Obama ordered that the proposal be pulled and guaranteed it would not be considered during his presidency.
What about the new 2012 farm bill? President Obama supports a comprehensive farm bill that provides a strong safety net for farmers, promotes conservation of soil and water, encourages biobased products and renewable energy efforts, expands exports, supports local food systems and invests in agricultural research.
"The Senate passed a bipartisan bill with the support of this administration," notes Vilsack. "Unfortunately, House Republican leaders refused to put the bill up for vote in the House."
Vilsack says the facts are clear, "we have made significant progress during the last four years in the farm economy." For more information on the Obama administration's policies on agriculture, the economy and other areas and issues go to www.barackobama.com/ia.