On Wednesday, the US House passed Speaker Kevin McCarthy’s debt limit legislation 217-215. The Limit, Save, Grow Act would increase the debt ceiling limit by $1.5 trillion—or through March 31, 2024 (whichever comes first). The Congressional Budget Office estimated the bill would save $4.8 trillion through fiscal year 2033. While the legislation has no chance of passing in the Democratic-led Senate, it represents the opening salvo in the debt limit fight between the two parties. President Biden has reiterated that he has no plans to negotiate on the ceiling increase, saying that the parties should come together on a clean bill like his predecessor received.

The vote was an extremely important one for the Speaker, as it represented McCarthy’s first real challenge in corralling enough party support for a key piece of Republican legislation. Four Republicans voted against the measure, Reps. Matt Gaetz (FL-01), Andy Biggs (AZ-05), Tim Burchett (TN-02), and Ken Buck (CO-04); however, it wasn’t enough to prevent the legislation from passing. The slim passage nonetheless is a big win for the Speaker, uniting enough Republicans from both wings of the party into supporting an increase, albeit one tied to major cuts. The Senate is not expected to take up the legislation, so it remains to be seen what the next move with be on the legislative front; however, pressure will now ramp up on the President and Democratic leaders to make the next move.

USDA Farm Production and Conservation (FPAC) will be hosting a webinar on the Emergency Relief Program (ERP) Phase 2 application on May 1, 2023 at 11:00 AM Pacific. ERP Phase 2 is a revenue-based program that relies on tax and financial records instead of the production history FSA programs usually require. The webinar will feature USDA staff and members of the National Farm Income Tax Extension Committee for a discussion on completing the ERP Phase 2 application form and guidance on where advanced tax and accounting knowledge may be required. Registration is required and can be accessed here.

On Monday, CAFB submitted comments to the U.S. Fish and Wildlife Service in response to their proposal to list two distinct population segments (DPS) of the California Spotted Owl under the federal Endangered Species Act. The comments were jointly submitted by a coalition of groups representing forestry, farming, rural counties, and resource conservation districts. If finalized, the proposal would list the Coastal-Southern California DPS as endangered and the Sierra Nevada DPS as threatened with a 4(d) rule.

4(d) rules under the Act can provide for conservation of a species by allowing exceptions that incentivize conservation actions or that, while may result in some minimal level of take of the species, are not expected to rise to the level that would have a negative impact on conservation. The comments emphasized the importance of the 4(d) rule covering all forest management that provides adequate nesting and roosting habitat because it is vital for recovery of the species. In addition, the comments emphasized the importance of utilizing best available science and discussed specific studies the Service could incorporate to better inform their regulatory decisions.

In the past week, the National Council of Agricultural Employers (NCAE), of which CAFB is a member, issued a formal legal challenge and sought a temporary injunction against the Department of Labor’s final rule on wage changes to the H-2A system. The rule, which we’ve noted previously, puts agricultural employers at risk of higher wage rates for different worker classifications due to what the DOL determined was an “economically insignificant” rule. NCAE is challenging that notion, saying that the rule’s changes will actually be quite detrimental to H-2A users. The American Farm Bureau Federation issued their own Market Intel report last month that showed the changes would indeed quite likely lead to substantial cost increases for both smaller and larger producers.

CAFB has been an advocate for H-2A and Adverse Effect Wage Rate (AEWR) changes for many years now. The previous wage calculation rates have suffered from a poor foundational structure, leading to an unsustainably fast rise in wage rates year over year. Legislative and regulatory efforts have stalled though due to the current makeup of both the Executive and Legislative branches in DC. The Biden administration has been insistent that these methodology changes are necessary, and the makeup of Congress is even less conducive to ag labor reform than in the previous Congress. CAFB will update members as this legal challenge develops.

Last week, the U.S. Forest Service and Bureau of Land Management made several forestry related announcements in conjunction with Earth Day. These include:

USFS Deputy Chief French is providing guidance to USFS Regional Foresters on how to interpret the Infrastructure Investment and Jobs Act (IIJA) with respect to Mature Old Growth trees, prioritizing projects that promote fire resilience for these trees. CAFB is reviewing the announcements and will submit comments to the agencies as appropriate.

Last week, the 6^th U.S. Circuit Court of Appeals issued an administrative stay on enforcement of the Biden administration’s Waters of the United States rule. The stay is temporary until May 10 while the Court decides whether to issue an injunction. Should an injunction be granted, Kentucky would be the 27th state to block enforcement of the new rule. The U.S. Supreme Court has still not issued a decision in the Sackett case.

Last Friday, the Department of Interior announced $140 million in Bipartisan Infrastructure Law and annual appropriations WaterSMART Program funding for 84 water conservation and efficiency projects in western states. The announcement is part of the Administration’s effort to increase water conservation, improve water efficiency, and prevent the Colorado River System’s reservoirs from falling to critically low elevations that would threaten water deliveries and power production. A full list of projects funded in California can be viewed here.