Hello everybody out there in farm country. This radio commentary is brought to you by the National Corn Growers Association, CropLife America, and Renewable Fuels Association. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.
And now for today’s commentary –
We are still living with inflation. Energy prices may be down a little, but still very high. The food that we love costs much more. Ground beef surged up 11% from last year. The cost of bacon jumped 9.3%. Chicken breast is up almost 24%. From the farm and ranch perspective our prices needed to go up. Our costs for raising the crops that feed our animals continue to hit new peaks.
I don’t think we can escape this inflation any time soon. We have legislative issues on the agenda now that could shake everything up. 17 Republicans helped the Dems pass a $280 billion subsidy for the semiconductor industry. This was in President Biden’s Build Back Better legislation. Most of us thought it was never going to see the light of day. I know we would like to produce more semiconductor production. We don’t like depending on China as much.
The President wants to spend even more money. Democratic Senator Joe Manchin had been holding that back. But he surprised everyone by signing on to support a huge new bill. The tax part of the bill is supposed to raise $739 billion. Here is what they say it will do.
1. Impose a 15% corporate minimum tax
2. Allow Medicare to negotiate prescription drug prices
Of the new revenue, $369 billion will be spent on climate and energy programs. It does include tax credits if you buy electric vehicles and $64 billion for extended health care. The bill does invest $40 billion in agriculture, forestry, and rural communities. Half of that $40 billion will be spent to encourage green farming practices – cover crops, carbon sequestration etc. $14 billion will be spent on rural electric coops and renewable energy. It is clear that agriculture and rural America are getting enough money out of this package to attract some support. If the bill would really deliver a $300 billion deficit reduction, that would be wonderful.
Here is what I think. Big spending in the already passed bill will just pour fuel on the inflation fire. The second bill which may or may not become law is very different. I’m not against taxing some of the biggest corporations that seem to always find a loophole to avoid taxes. Also, I have always felt it has been unfair that other countries can have cheaper prescription drugs than we have. That is because their governments negotiate with the drug companies. We don’t do that. A $739 billion bill is a lot of money. It will be very difficult to get it passed. Republican members of Congress are fighting it. I like the fact that we can raise some money to deal with our deficit. But I hate to be spending so much. The name of the bill has a good sound – “Inflation Reduction Act.”
Until next week, this is John Block reporting from Washington, D.C. If you would like to review my radio shows going back more than 20 years, just go on-line to www.johnblockreports.com.
