Much of the focus in Washington D.C., is on the “fiscal cliff,” which is a popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012. More about that down the page.
Another conundrum, let’s call it the “dairy cliff,” is about to send the price of milk skyward. It what was not previously anticipated is a rise in the price of milk, estimated at between six and eight dollars per gallon. A half-century-old 1949 farm law known as the The Agricultural Act of 1949 kicks in on Jan. 1, if Congress fails to act.
With Congressional inaction, the act would require the Agriculture Department to begin buying up dairy products at a rate of $38.54 per hundredweight, or more than double the prevailing price today. While President Obama as recently as today has blamed Republicans for inaction on the “fiscal cliff,” the failure to act to avoid the “dairy cliff” is indeed the entire fault of Republicans.
As of press time, lawmakers have agreed to a one-year extension of the expiring farm law that, if enacted, would head off a possible doubling of retail milk prices to $8 or more a gallon in early 2013. The extension would end a 32-month attempt to update farm subsidies dating from the Depression era.
House Agriculture Committee Chairman Frank Lucas, an Oklahoma Republican, said on Sunday he hoped the legislation would be passed by Congress and signed by President Barack Obama by Tuesday. The bill is listed for a vote, but in Washington, D.C., nothing is guaranteed.
Politico reports that Speaker John Boehner and House Republicans found themselves paying a heavy price for an aggressive, take-no-prisoners legislative strategy all year. The Tea Party branch of the House Republicans bet heavily on a Mitt Romney victory, explaining why we are in the position we are in with the “dairy cliff.”
The dairy issue is not simple and is complicated. “Very few people understand dairy policy and even fewer want to,” laughs Jerry Slominski, who represents the International Dairy Foods Association, the chief lobbying arm for the processors. Slominski sums it up best with humor.
Complicated or not, eight dollar a gallon milk prices would be no laughing matter. Of course, it isn’t just the rising price of milk, but the coming rise of a variety of taxes that could be political dynamite for both parties, but an acutely Republican/Tea Party problem.
The “fiscal cliff,” which is the term used for the end of the Budget Control Act of 2011 scheduled to go into effect. For one, it means the “Bush-era” tax cuts will expire tomorrow, New Year’s Eve.
Other tax increases include the end of last year’s temporary payroll tax cuts (2% increase), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, and the beginning of taxes related to President Obama’s health care law.
Then there are the spending cuts and the so-called “sequester,” which will cut heavily into defense and cause layoffs. All sounds so complicated, but the American people will see it quite simple in the form of a doubling of milk prices and higher taxes in a large variety of categories.
The hope is that not only will the farm bill come up for a vote, but that a “fiscal cliff” bill will come up for a vote.
If not, the finger pointing will continue. Straight at the Republican Party and their Tea Party compatriots.
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John is the author of an award-winning book, the 2010 Winner of the USA National Best Book award for African-American studies, published by The Elevator Group. Mr. and Mrs. Grassroots: How Barack Obama, Two Bookstore Owners, and 300 Volunteers did it. Also available an eBook on Amazon. John is also a member of the Society of Midland Authors and is a book reviewer of political books for the New York Journal of Books