Washington Report: Small Business Tax Credit Bill; USDA to Clean Up Discrimination; U.S. Hits Debt Ceiling

A federal judge has finally granted preliminary approval of the $1.25 billion Pigford II settlement agreed to by the federal government and the nation’s Black farmers to compensate those who were discriminated against by the U.S. Department of Agriculture.

“I am pleased to see movement from the judge in this case. Black farmers have waited far too long for justice. They deserve to have their cases heard by a neutral arbitrator,” said John Boyd, president of the National Black Farmers Association. “This ruling signals one more step forward on the long march to justice. It has been an arduous and challenging journey.”

Judge Paul Friedman of the U.S. District Court for the District of Columbia made the long-waited ruling on Friday. His decision came on the heels of the release of a report produced by an independent firm that found the USDA is still mired in problems related to civil rights violations and racial discrimination. The report includes more than 200 recommendations to fix them, several of which Secretary Tom Vilsack

had begun implementing before the report’s release.

The report strongly recommends that the agency make significant inroads in improving its outreach and service delivery to minority farmers and ranchers, the two groups that have likely experienced the greatest amount of discrimination. In an interesting twist, the USDA is currently trying to work out a deal with former agency official Shirley Sherrod, who was forced to resign from her position last year after a conservative blogger released a misleading video clip of an address she made to an NAACP group. The agency hopes that Sherrod will work with it on a contractual basis through the firm she co-founded called The Southwest Georgia Project For Community Education Inc. to promote outreach and diversity.

• U.S. Hits Debt Ceiling: What Happens Next?

The nation hit its $14.3 trillion debt limit last Monday, but, unlike the congressional lawmakers predicted, the sky didn’t come falling down.

Treasury Secretary Timothy Geithner has taken a series of steps to prevent default, including suspending payments to the Civil Service Retirement and Disability Fund and Government Securities Investment Fund, so he could extend the debt limit deadline to August 2. Geithner said that the suspended payments will be made to both funds and that federal employees and retirees won’t be affected.

Meanwhile, Congress and the White House will have 11 weeks–four of which House members are scheduled to spend back at home in their districts–to negotiate a deal. Staffers who work for the bipartisan, bicameral group of lawmakers tasked with figuring out ways to reduce the deficit are continuing to work on the task while the House is in recess this week.

Their task is not easy. House and Senate Republicans are standing firm on their pledge to not raise the debt limit until significant spending cuts are made in the federal government’s 2012 budget.

“Americans understand we simply can’t keep spending money we don’t have. Spending-driven deficits, record debt and the threat of tax hikes are smothering our economy with uncertainty and making it harder for small businesses to hire new workers,” said House Speaker John Boehner, in a statement Monday. “As I have said numerous times, there will be no debt limit increase without serious budget reforms and significant spending cuts–cuts that are greater than any increase in the debt limit.”

House Assistant Democratic Leader James Clyburn (South Carolina), who sits on the bipartisan deficit panel, told Dow Jones on Monday that he believes the budget and debt limit deals should be negotiated separately. It may take longer to reach a budget deal and Congress must act swiftly so that a vote on raising the debt limit can be taken before the next deadline.

House Minority Whip Steny Hoyer

(Maryland) accused Republicans of holding the economy hostage.

“Businesses–and the global economy–need certainty that the U.S. will continue to pay its bills. By choosing to hold the economy hostage by risking a default on our nation’s debt, Republicans are endangering our economic recovery,” he said. “I hope now that we’ve reached the debt limit, and the Treasury has been forced to employ extraordinary measures, Republicans stop putting the economy at risk and work with us to meet our obligations and set forward a serious, balanced approach to deficit reduction.”