S P E C I A L
R E P O R T
Presidential, statewide elections bring few changes | 3 November 19, 2012 Vol. 91
No. 21
Senators urge waterway improvements
Members help feed Wisconsin’s hungry | 7
‘Thanksgiving survey’ Prices for turkey dinner up slightly, but meal remains a bargain | 8
Looking ahead to the 2014 completion of the Panama Canal expansion, a bipartisan group of senators is planning to offer a bill to help ensure construction of the Chickamauga Lock. The American Waterworks Act would create a wider and longer lock able to handle multiple jumbo barges at a time, increasing the volume of cargo that can come through the lock while decreasing the time it would take to get it through. Updating locks and dams along critical shipping waterways is vital to the efficient transport of
U.S. farm commodities, said Andrew Walmsley, American Farm Bureau Federation transportation specialist. “The river structures now in use were built many decades ago and were not designed to accommodate today’s longer barge tows that are absolutely necessary in order to compete in a global market,” Walmsley said. “While these outdated locks and dams make our transportation system less efficient, our competitors in countries such as Argentina and Brazil are aggressively modernizing their own transportation infrastructure.”
Underscoring how important sound waterway infrastructure is, AFBF’s David Salmonsen, trade specialist, and Veronica Nigh, economist, recently led a group of Farm Bureau leaders on a tour to St. Louis, Mo., New Orleans and Panama to consider how the expansion of the Panama Canal locks will affect U.S agricultural trade. “We saw first-hand the opportunities for competitive agricultural trade and the challenges to the maintenance and improvement of U.S waterways, which carry more Waterway Continued on Page 2
Fiscal cliff looms over Congress’ lame duck
Sandy wreaks minimal havoc on agriculture Stretching over 900 miles, Superstorm Sandy triggered an estimated 8 million power outages and ultimately affected approximately one-third of the U.S. population. By comparison, agriculture got off easy.
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TAXES AND THE BUDGET are the focus of Congress’ post-election session as lawmakers and the president try reach a deal to avoid triggering hefty tax increases and sizeable spending cuts. Congressional lawmakers returned to Capitol Hill last week with less than two months to reach an agreement on scheduled tax hikes and spending cuts. If Congress can’t get a budget deal done, a series of tax increases and spending cuts dubbed the “fiscal cliff” take effect on Jan. 1. But a budget deal could be a long row to hoe with Democrats and Republicans fairly far apart on how to address the looming fiscal cliff. President Barack Obama said he is willing to compromise with Republicans, but he’s adamant that tax cuts be limited to those who make $250,000 or less. For their part, Republicans are firm in their position that increased tax rates on higher earners will slow job expansion. House Speaker John Boehner (R-
Ohio) wants to reduce tax rates, eliminate special-interest loopholes and rein in government benefits. Among the tax rates slated to jump on Jan. 1 are those tied to estate taxes and capital gains. While the top tax rate for the estate tax will climb from the 35 percent in place now to 55 percent, the exemption is slated to drop from the current $5 million to $1 million per person. The spousal transfer for the exemption will also disappear. Until estate taxes are permanently eliminated, farmers want Congress to keep or improve the current exemption, indexed for inflation, maintain spousal transfer and continue the top tax rate. “If Congress doesn’t act on estate taxes, as many as 10 percent of farm and ranch families could
be faced with making critical decisions to sell land, buildings or equipment to pay the tax,” said Pat Wolff, American Farm Bureau Federation tax specialist. The top long-term capital gains tax rate is also scheduled to rise in the new year, from the current 15 percent to 20 percent, and the dividends tax rate will more than double to 39.6 percent. Nationwide, 40 percent of all agricultural producers report some capital gains, nearly twice the share for all taxpayers. In addition, the average amount of capital gains reported by farmers is about 50 percent higher than the average capital gains reported by other taxpayers, according to AFBF. In one respect, the fiscal cliff, or at least prospect of it, could be Cliff Continued on Page 8