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U.S. farm state senators unveil bill to overhaul biofuel waiver program

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U.S. farm state senators unveil bill to overhaul biofuel waiver program

(Reuters) – Two Midwest senators said on Friday they have introduced a bill to reform the Environmental Protection Agency’s opaque biofuel waiver program, which the corn industry says helps oil companies at the expense of farmers here by threatening ethanol demand.

U.S. Senator Tammy Duckworth (D-IL) speaks with an aide before the announcement of the formation of the Senate Democrats’ Special Committee on Climate Change on Capitol Hill in Washington, D.C., U.S., March 27, 2019. REUTERS/Joshua Roberts

The bill, introduced by Republican Deb Fischer of Nebraska and Democrat Tammy Duckworth of Illinois, would impose a June 1, deadline, for refineries to apply for the waivers that exempt them from blending ethanol into gasoline. That would allow time for the EPA to calculate the volumes waived and apply them to the next year’s blending mandates, the senators said in a statement.

The measure would require the agency to report to lawmakers on the methodology used to decide whether a waiver is granted, and would make other elements of the largely confidential waiver process more transparent.

The bill’s introduction comes after reports that the Trump administration’s EPA had given waivers to facilities run by majors here like Exxon Mobil Corp and Chevron Corp. The EPA has said it considers only the economics of the refinery requesting a waiver, and not the well being of its owner.

“Farmers across Illinois and throughout the Midwest are hurting and ethanol plants are idling while this administration is abusing the small refinery exemption program to undermine the bipartisan Renewable Fuel Standard,” said Duckworth. 

Fischer said the current system effectively reduces the overall volumes of biofuels that the EPA requires refiners to blend in a given year, without providing a mechanism for the refining industry to make up those volumes elsewhere.

“That’s unfair and it hurts our farmers and ethanol producers. This bill would shine a light on what’s been an obscure exemption process and help promote economic growth in rural America,” said Fischer.

Under the U.S. Renewable Fuel Standard (RFS), refiners are required to blend increasing volumes of biofuels into their fuel each year or buy credits from those who do, creating a 15-billion-gallon annual market for ethanol.

But small facilities can apply for an exemption if they prove that compliance with the RFS would be a financial hardship, and the EPA can grant them secretly in a process they say protects confidential business information.

Since U.S. President Donald Trump took office, the administration has vastly expanded its use of the waivers, citing court rulings in 2017 that concluded Obama’s EPA had been too stingy with them, saving oil companies hundreds of millions of dollars.

Waivers save refiners money because they do not need to blend biofuels or buy credits. The biofuel industry meanwhile says they threaten ethanol demand, even though federal data shows blending rates have been relatively stable.

Reporting by Jarrett Renshaw in Philadelphia; Writing by Richard Valdmanis; Editing by Bernadette Baum and Jeffrey Benkoe

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Deep budget cuts put University of Alaska in crisis mode; ‘grappling with survival’

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ANCHORAGE, Alaska (Reuters) – The University of Alaska board of regents, facing deep budget cuts exacted by the governor that will eliminate about 40% of the university’s state funding, voted at an emergency meeting on Monday to declare the academic equivalent of bankruptcy reorganization.

The regents’ 10-1 vote puts the university into “financial exigency,” a status allowing administrators to summarily fire tenured faculty and other staff, close whole academic programs and even shut down entire campuses. Up to 2,000 employees could lose their jobs, University of Alaska President Jim Johnsen has said.

The drastic move is necessary, regents said, because of line-item spending vetoes by Republican Governor Mike Dunleavy that slashed $440 million from the budget passed by the state legislature, including $130 million from the university system.

Dunleavy, who took office in December and is an outspoken supporter of U.S. President Donald Trump, has called for major cuts in higher education, health care and other social programs as he pushes to sharply raise the annual oil revenue dividend that Alaska pays to nearly every state resident.

Lawmakers attempted on July 10 to reverse Dunleavy’s budget vetoes but failed to muster the required three-quarters vote to override the governor. The result, the regents said at their meeting, is tragic for the university.

  “Unfortunately, we are now grappling with survival,” said John Davies, the board of regents’ chairman.

Davies disputed Dunleavy’s assertion that sharp cuts to the university and other programs were necessary because Alaska faces a financial crisis.

“I believe it’s more of a political crisis. It’s some decisions that have been made by the governor and by a minority of the legislature,” he said.

The budget as passed by the legislature contained a surplus. Dunleavy imposed deep cuts, nevertheless, while pushing to nearly double the dividend paid to residents each year from oil revenues collected for the Alaska Permanent Fund.

Dunleavy’s proposal for a record $3,000 dividend this year, at a time of declining oil industry receipts, would cost the state an estimated $2 billion.

The University of Alaska operates its three main campuses in Fairbanks, Anchorage and Juneau, with 13 smaller satellite campuses in remote communities such as Nome, Bethel and Kodiak. The $130 million cut by the governor is more than the cost of running the entire Anchorage campus, Johnsen has said.

The university, especially the Fairbanks campus, is considered a world-class hub for Arctic and climate-change research, and some Dunleavy critics have accused the governor of targeting the university because of that.

“Some prominent conservatives deny the reality of human-caused climate change, and so curtailing UA research is great from their perspective,” Susan Henrichs, a former University of Alaska Fairbanks provost, said in a column published in the Fairbanks Daily News-Miner.

Regents had considered declaring financial exigency a week ago but postponed their decision. Since then, Moody’s sharply downgraded the university’s bond rating, giving it a “negative” outlook.

Members of the legislature’s bipartisan majority coalition said they still hope to restore funding to the university and other programs.

Reporting by Yereth Rosen in Anchorage; Editing by Steve Gorman and Leslie Adler

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Trump announces ‘real compromise’ on budget deal with congressional leaders

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Trump announces 'real compromise' on budget deal with congressional leaders

The Trump administration and congressional leaders, including Democrats, have reached a critical debt and budget agreement, a deal that amounted to an against-the-odds victory for Washington pragmatists seeking to avoid politically dangerous tumult over fiscal deadlines, President Trump announced Monday.

The deal would increase spending caps by $320 billion relative to the limits prescribed in the 2011 Budget Control Act, whose provisions have repeatedly been waived year after year. It would also suspend the debt ceiling and permit more government borrowing until July 31, 2021 — after the next presidential election.

The arrangement all but eliminates the risk of another government shut down this fall, but already has been drawing the ire of fiscal conservatives saying it will lead to more irresponsible government spending.

Even some Democrats — including Vermont Sen. Patrick J. Leahy — were outraged, saying the bill would not block Trump from spending money on his proposed border wall.

“I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy – on a two-year Budget and Debt Ceiling, with no poison pills,” Trump wrote.

He added: “This was a real compromise in order to give another big victory to our Great Military and Vets!”

Democrats celebrated that, under the new deal, the domestic, non-military budget receives larger increases than the defense budget, when compared to last year. Democrats also lauded the deal’s allocation of $2.5 billion for the 2020 Census, to ensure that all residents are counted.

The deal, which must still pass Congress, also comes as budget deficits have been rising to $1 trillion levels — requiring the government to borrow a quarter for every dollar the government spends — despite the thriving economy and three rounds of annual Trump budget proposals promising to crack down on the domestic programs that Pelosi, D-Calif., has been defending.

It apparently ignored warnings from fiscal conservatives saying the nation’s spending has been unsustainable and eventually will drag down the economy.

“This agreement is a total abdication of fiscal responsibility by Congress and the president,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a Washington advocacy group. “It may end up being the worst budget agreement in our nation’s history, proposed at a time when our fiscal conditions are already precarious.”

This is a developing story. Check back for updates.

The Associated Press contributed to this report.

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Trump says deal reached on spending, debt limit

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Trump says deal reached on spending, debt limit

FILE PHOTO: U.S. President Donald Trump speaks as he formally kicking off his re-election bid with a campaign rally in Orlando, Florida, U.S., June 18, 2019. REUTERS/Carlos Barria/File Photo

WASHINGTON (Reuters) – President Donald Trump said on Monday a two-year deal had been reached with congressional leaders to raise the Treasury Department’s borrowing authority and to set budget spending caps.

“I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy – on a two-year Budget and Debt Ceiling, with no poison pills,” Trump said on Twitter.

Reporting by Eric Beech; Editing by David Alexander

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