Lott shoots from the hip
Senator says tax bill good for Delta agriculture, small businesses
By Doreen Muzzi
DBJ Editor

Far from being a tax cut for the wealthy, the $70 billion tax reconciliation package recently signed into law by President Bush will be a boost for agriculture and for small businesses in the Mississippi Delta, says Mississippi Sen. Trent Lott.

“The next-to-last vote we cast before we left was to keep your taxes from increasing by $70 billion dollars over the next few years, said the Republican senator, speaking at the May 12 annual meeting of Delta Council at Delta State University in Cleveland, Miss.

“Some in the press refer to that as a tax cut,” says Lott. “Well, if you don’t extend the rate of taxes on capital gains and dividends beyond where they’re now scheduled to stay, and then they go up, you’ll get a tax increase.

“And when you allow no extension for expensing for small businessmen and women, that is important to the Mississippi Delta because agriculture is about more than just the crops you produce. It’s about all these parts that serve you, the people who provide fertilizers and the gins and the stores. Most are small businesses, and when you increase small business expensing in the Delta, it’s not a small thing.”

The Tax Increase Prevention and Reconciliation Act, which passed mostly along party lines in both the House and the Senate, basically quadruples the deduction for expenses that small businesses can take, allowing them to write off up to $100,000 a year in new equipment purchases, says Lott.

The bill also protects 15 million middle-income Americans from the alternative minimum tax and holds the line
on dividend and capital gains taxes, he adds.

A bit of unfinished tax business in the Senate, says Lott, is a vote on the permanent repeal of the estate tax, which has already passed the House.

“A lot of you have generally indicated to me that you don’t think it’s fair. We are going to continue working to make sure that the death tax does not take away what people have earned after a life of work. We will have a vote on that in June,” he says.

Lott says he and fellow Mississippi Republican Sen. Thad Cochran understand that agriculture is important not only to the Delta but to the entire state of Mississippi. “I’ve seen the statistics. There are more people in agriculture-related jobs in the Delta than at Nissan, or at the shipyard in my hometown of Pascagoula. If you look at agriculture, it is by far the largest employer in the state. We are going to continue to work on that,” he says.

Farm bill negotiations are always difficult, he says, with Southerners pulling against Midwesterners. “Chuck Grassley is sometimes my friend, but we have a different point of view in Mississippi with our emphasis on cotton, rice, soybeans and catfish. We have a good chairman of the agriculture committee, a Georgian by the name of Saxby Chambliss, and we will follow his leadership to a large extent,” says Lott.

“What do we do with the agriculture bill? Do we try to redo it? Do we try to extend what we’ve got? How do we relate that to trade?” asks the senator.

Lott says he has especially struggled with the agricultural trade issue. “Viscerally, I’m kind of a populist, but when we get into trade issues, I know intellectually it is the right thing to do. It is about free markets and freedom, and free trade is a part of that. But there is another side, and that is the absolute requirement that it be fair trade. Our trading partners are not trading fairly with us,” he says.

“I know the Delta supports trade, and we want to get your products into the markets of the world,” says Lott. “We want to get our cotton to market, and we want to get our products that are manufactured in Greenwood, Miss., into foreign markets. We want access. But the Europeans in particular don’t want to talk about access. They want us to get rid of our subsidies, but they don’t want us to send our products into their markets. As far as I’m concerned, I don’t want to send any into France anyway.”

Lott questioned the commitment of the current administration and of “different entities of commerce and customs” to insuring free and fair trade. “We’re right on the edge here with the World Trade Organization, and we’ve got a lot of trade agreements that are pending – unilateral and multilateral. We’ve also got the farm bill coming up, and the intersection makes it kind of difficult, frankly.

“I’m trying to look at it country by country. I looked at China last year, and we had some pretty testy meetings with Chinese leaders about the manipulation of their currency. Now I’m not supposed to say manipulation. The Secretary of the Treasury specifically will not use the word, but there is no question they get up in the morning and look at trade considerations and decide what they are going to peg the dollar to or how they are going to set their currency. We cannot go by that – we’ve got to continue to push the barrier.”
Lott says he also has learned many lessons from the Koreans over the past few years, and he’s not impressed with what he has seen.

“They are not open in their markets. They want to act like they are still a developing country, and they want special considerations. They are not a developing country. They are a developed country, and they are cheating. They are not only blocking our products, but they are invading our country with poor quality products. They are really violating the trade laws, and I’m here now to tell you as a member of the finance committee, I will do everything in my power to stop a U.S.-Korea trade agreement until they start trading with us and dealing with us honestly and fairly,” he says.

Another issue of paramount importance is energy, says Lott. “Farmers and other businesses in the Mississippi Delta already have experienced energy problems because of natural gas and how important it is to production agriculture and to the overall economy of America. Back in the 1970s, I was told not to worry, that we’ve got a 400-year supply of natural gas. Well where is it? The answer is that it’s still in the ground, I guess.”

Rising energy costs continue to have a negative effect on farmers, small businesses and families, he says. “It’s easy for us as politicians to try to demagogue the issue and blame someone else – it’s the Republicans, it’s the Democrats, it’s the last congress, it’s this congress, it’s this president, it’s the last president, its not me, it’s the guy behind the tree. As a matter of fact, it is us. We’ve found the enemy and it’s us – we the people.

“We want cheap gasoline, and we want big-haul trucks, preferably a Nissan made in Mississippi. We want our SUVs and, by the way, we don’t want a refinery in our neighborhood. We don’t want another nuclear plant, and we don’t want hydro plants because the salmon might not like it. We don’t want more oil and gas drilling in the Gulf of Mexico or in Alaska. We basically don’t want to be bothered with how we could produce more or save more and have more fuel efficiency. And by the way, you can’t have all three.”

Congress, says Lott, must find a way to demand responsibility from oil companies and oil executives while admitting that the problem can’t be fixed immediately.

“But we can begin to do the things now that are necessary to have more affordable energy supplies, conservation and alternative fuels. If we act now, in four years or certainly in 10 years, we’ll have more of everything where we need it, and we will be wiser about how we use it.”

Lott says he always thought that if you were an American and you needed more, you could simply produce more.

“That’s some solution. We don’t have to have a smaller piece of the pie, we just make a bigger pie. I believe we can produce more oil and gas. We should drill in the Gulf of Mexico, and we should drill in Alaska. I’ve got a novel idea about oil and gas. I think you should drill only where it is. And if that’s in my empty lot in Pascagoula, then sink the well. I’m also willing to do these other things that my colleagues in congress feel strongly about. Let’s have conservation. Let’s give incentives for us to be wiser. I’m even willing to go along with better fuel efficiency standards for our vehicles,” he says.

Not all alternative fuels are good for all parts of the country, he says.

“Some people think ethanol is going to solve the problems of the world, but it is not a 100-percent good solution. There is a cost factor, and it does have an effect on the Delta because we are a corn user and we are a net importer. So we don’t get that benefit, and it winds up having a depressing effect on our prices. When I vote on ethanol, I’m going to be thinking that while this may be good and clean, what are the cost effects and how does it affect the people I represent – the people in agriculture, the people who don’t produce a lot of corn and who don’t have the infrastructure to produce ethanol. It isn’t easy.”

Healthcare, says Lott, is another area of concern for those living and working in the Delta. “We are trying to do more, but we have problems with healthcare – the ability to find it, to afford it, and accessibility in the rural areas. In the Mississippi Delta, how do you afford for your employees to have healthcare coverage, or how do you get to a regional hospital? This is not insignificant stuff. It is very expensive. I predict that over the next four or five years, it will be one of the most important things that we have to deal with in America.”

The Senate has come close, he says, to moving forward with a small business health plan

“This would allow small businesses to get together within their area of service and form associations and provide healthcare for their workers,” says Lott. “We’ve got 40 million Americans who are uninsured. This is one way we can get them better insured. We’ll keep working on that to try to make sure healthcare is available to a lot of people who can’t afford it, or for employers to make it available to their employees.” DBJ


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