Thursday, March 29, 2012
Keith Good Farm Policy: Republican Budget Plan Cuts $179B from Ag
By Keith Good
Farm Bill: Budget, and Policy Issues
David Rogers reported yesterday at Politico that, “Republicans pushed toward House passage on Thursday of their new budget plan after crushing a bipartisan alternative Wednesday night and smoothing out internal GOP differences over the handling for future funding for disasters.
“Prodded by party leaders, the Budget Committee backtracked from its earlier demands that all such emergency assistance be fully offset within the strict spending caps set in the resolution.”
Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The House meets Thursday at 9 a.m., and after taking up a few last alternatives, members will approve the budget resolution offered by House Budget Committee Chairman Paul Ryan (R-Wis.).
“Members rejected three budget alternatives on Wednesday night — that included the 0-414 drubbing of a plan based on the Obama administration’s budget plan.”
Rosalind S. Helderman reported yesterday at the 2chambers Blog (Washington Post) that, “In a major disappointment to those hoping Congress will strike a grand bargain to cut deficits through spending cuts and tax revenues, a budget proposal designed around those principles was supported by only 38 House members Wednesday night.
“Proposed by Republican Steven C. LaTourette of Ohio and Democrat Jim Cooper of Tennessee, the plan called for reducing the deficit by $4 trillion over the next decade, including more than $1 trillion in new tax dollars.”
Ms. Helderman added that, “The LaTourette-Cooper budget was modeled on an approach suggested 15 months ago by a presidential fiscal commission chaired by former senator Alan Simpson (R-Wyo.) and White House official Erskine Bowles. Wednesday’s vote was the first time either chamber had voted on their ideas. … Sponsors of the bipartisan budget had hoped a strong vote of support could signal a new bipartisan desire to tackle deficits. Instead, the vote might symbolize Washington’s intractable partisan differences. Only 16 Republicans and 22 Democrats backed the idea.”
Yesterday’s 2chambers update explained that, “Ryan’s plan, which would cut $5.3 trillion over the next decade through deep cuts to the social safety net while slashing tax rates, is expected to win approval Thursday in a party-line vote.
“The House will also vote Thursday on a Democratic alternative authored by the committee’s top Democrat, Rep. Chris Van Hollen (Md.), as well as a plan advanced by conservatives on the Republican Study Committee, which would cut spending even more quickly than Ryan has proposed. On Wednesday night, the House rejected a separate proposal from the Congressional Black Caucus.”
More specifically with respect to agriculture, a news item yesterday from the House Agriculture Committee Democrats stated that, “The FY2013 Republican Budget Resolution cuts $179.4 billion from farm bill programs over ten years. The Budget Resolution makes the following cuts to programs under Agriculture Committee jurisdiction: Commodity Programs – $29.3 billion; SNAP – $134 billion; Unspecified – $16.1 (billion believed to be from Conservation Programs).”
The release added that, “The FY2013 Republican Budget Resolution includes Budget Reconciliation instructions for six Committees, including the House Agriculture Committee. The House Agriculture Committee would be required to reduce spending over the following time periods: FY 2012-13 – $8.2 billion; FY 2012-17 – $19.7 billion; FY 2012-22 – $33.2 billion. The Committee has until April 27 to provide legislation that meets these reduction targets.”
Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “For now, however, the farm-bill process in the House is complicated by the budget reconciliation the process, [House Agriculture Committee ranking member Collin Peterson, D-Minn.] said. The House Agriculture Committee will have to do explain by April 27 how it will meet its reconciliation target.”
Mr. Clayton added that, “The House Agriculture Committee will have to cut $33.1 billion over 10 years under the House reconciliation process. The problem, Peterson said, is that Agriculture Committee will have to show $8.2 billion in cuts in the first year and $19.7 billion over five years.
“The House is voting on a full federal budget bill on Thursday that would cut as much as $180 billion out of USDA programs over 10 years. However, the Senate leadership maintains they plan to stick with the budget plan agreed upon last summer and won’t take up the House bill. Thus, on the $180 billion in USDA cuts ‘It’s all for show. There’s no requirement that we have to do that,’ Peterson said.”
House Agriculture Committee Chairman Frank Lucas (R., Okla.) was a guest on yesterday’s AgriTalk radio program with Mike Adams where the discussion focused Farm Bill issues. An audio replay of yesterday’s AgriTalk
In part, Chairman Lucas stated that, “Well, first of all, it’s a two stage process in what they’re offering up: a budget resolution that would lay out spending guidelines literally through this farm bill that’s coming up and the next ten years. And actually, it’s closer to $40 billion in cuts. But also incorporated in that, Mike, is a reconciliation package asking us to make $33 billion in cuts in existing spending.
“I’d caution our listeners to remember that for a budget resolution or for a reconciliation bill to have the force of law, to really make a difference, both the House and the Senate have to pass those documents.”
Mike Adams asked Chairman Lucas, “So when you’re crafting the farm bill, what number are you using to write the bill that you’re going to come up with, ultimately?”
Chairman Lucas indicated that, “I suspect, Mike, that you’re talking about something in that $30 billion range. But that remains to be determined. The process this week of passing a budget resolution – by the way, in addition to Mr. Ryan’s budget, I’m told there may well be five or six alternatives offered. It’s going to be a pretty messy process. The other thing we have to bear in mind in production ag is we need the support of the House in order that when we pass a bill not only out of the House Agriculture Committee, that we can all agree in a bipartisan fashion that is in the best interest of rural America. But we have to get that to the floor of the House, it has to pass there.
“Ultimately, the Senate has to pass a farm bill in committee and across the floor so we can go to conference. And in conference the House and Senate bills will be, I suspect, dramatically different. That’s where the final numbers are worked out. So look at the numbers now, think about what they all recommend, but bear in mind the real numbers and the real farm bill will be the product of that conference committee, whether it’s now or after lame duck session, or maybe after a year’s extension of the existing farm bill. There’s a lot of pieces in play, Mike.”
With respect to Senate activity on the Farm Bill, Chris Clayton indicated yesterday at the DTN Ag Policy Blog that, “Despite budget complications in the House, more positive movement is starting to happen that could get a farm bill out of the Senate before the end of May.”
Mr. Clayton added that, “Still, the Senate could move a bill operating under the premise of $23 billion in budget cuts over 10 years while the House may face having to cut $33 billion because of the budget-reconciliation process being pushed by House leaders.
“A possible target-price program in the commodity title right now is a sticking point. Some major commodity groups have resisted increases in target prices, but some crops don’t work well with crop insurance and groups representing them want a target-price program. That would include crops such as rice and peanuts.
“‘They don’t have a crop insurance system so the revenue program doesn’t do any good,’ Peterson said. ‘The only way they can replace direct payments with their banker is by having an enhanced target price. They think that will work as collateral with the bank. So what this is really about is the bankers more than the farmers.’”
Ron Hays, the Director of Farm Programming at the Radio Oklahoma Network, also spoke yesterday with Chairman Lucas and in a summary of that discussion, Mr. Hays noted that, “Lucas says he has been encouraged by the working relationship forged with Senate Agriculture Committee Chairwoman Debbie Stabenow and Ranking Members Roberts and Peterson, but the future of a farm bill will ultimately hinge on finances. The parliamentary relationship between the House and Senate is somewhat complicated due to the Senate’s lack of a budget, but Lucas says that should work in favor of House committee members.” (A replay of the conversation with Chairman Lucas and Ron Hays is available here).
In his discussion on AgriTalk yesterday, Chairman Lucas also stated that, “If the direct payments go away, and that appears to be the direction we’re headed, then the safety net becomes some form of enhanced crop insurance, both yield and weather, as well as price revenue protection. Insurance is only as good as the resources that are involved in it to make the program work. I would hope that the flexibility I believe that we’ll get under the Ryan budget and that will enable us to craft something working with the Senate, that will provide that safety net.”
Meanwhile, an extension of the 2008 Farm Bill remains a possibility.
“If you look at the three previous farm bills that I’ve been a part of, the ’96 bill didn’t pass under regular order. It was part of a reconciliation package. It came to the floor in a non-amendable limited debate fashion. The next two farm bills, the ’02 and’08, both passed after one-year extensions of the previous farm bill. I’d say, Mike, there’s just a really strong chance that we may have to have an extension,” Chairman Lucas said yesterday on AgriTalk.
It was also pointed out yesterday that an extension would include direct payments.
Recall that last week on AgriTalk, Ranking Member Collin Peterson pointed out that, “We could get to September and not have this done, and then there’s even a question, I think, the last time, remember in ’07, when I did the farm bill, we had to extend various authorities to the Secretary five different times in order to finally get the bill done because they couldn’t get the Senate to take it up. But this time we’re hearing rumors that they won’t extend the current farm bill, the different parts of the farm bill, without insisting on further cuts…”
Meanwhile, Tom Steever reported yesterday at Brownfield that, “Senator Charles Grassley supports Senate Agriculture Committee Chairwoman Debbie Stabenow’s desire to move the farm bill sooner rather than later. The GOP lawmaker from Iowa predicts markup after returning from the Easter recess. Grassley, who farms in Iowa, says farm policy should be market oriented.
“‘We don’t need anything that causes farmers to farm for the farm program and not the marketplace, because that change was back in the mid-1990s,’ said Grassley, Wednesday, during a conference call to reporters. ‘We don’t want to go back to the pre-90s farm programs where there was so much government decision making; let the farmers farm according to the marketplace now.’”
Mike Spradling, the President of the Oklahoma Farm Bureau discussed a variety of policy topics, including the Farm Bill, earlier this week in an interview Chris Casteel of The Oklahoman (video replay). A portion of that discussion focusing specifically on crop insurance and catastrophic losses can be heard here (MP3- 2:00).
In other policy news, Ken Anderson reported yesterday at Brownfield that, “The president and CEO of United Egg Producers (UEP), Gene Gregory, has taken a lot of heat in recent months—mostly from other segments of animal agriculture—for UEP’s decision to compromise with the Humane Society of the United States (HSUS) on the issue of cage size for egg-laying hens.
“But Gregory continues to defend the compromise—and the so-called ‘egg bill’ now pending in Congress—saying that federal standards are necessary to ensure the future survivability of the U.S. egg industry.”
And a news release yesterday from Sen. John Thune (R., S.D.) stated that, “[Sen. Thune] today introduced the Death Tax Repeal Permanency Act to abolish the destructive federal death tax. Representative Kevin Brady (R-Texas) introduced identical legislation in the House of Representatives and the bill currently has over 200 bipartisan cosponsors.
In news regarding fuel prices, a news release yesterday from Senate Agriculture Committee Ranking Member Pat Roberts (R., Kan.) stated that, “[Sen. Roberts] today on the Senate floor said high gas prices are not caused by speculation in the commodities markets, and called such recent claims inaccurate.
“‘We should be finding effective solutions to fix failed federal energy policy, rather than creating blame where it does not exist,’ Roberts said. ‘Political posturing by President Obama and my friends across the aisle does nothing to minimize the pain felt at the pumps.’”
“Sen. Roberts’ speech comes after some have blamed the rising prices on the commodity markets. Roberts is Ranking Member of the Senate Committee on Agriculture Nutrition and Forestry which has jurisdiction over the Commodities Futures Trading Commission (CFTC) which regulates commodities markets.”
An update yesterday at the Senate Environment and Public Works Committee stated that, “Today, U.S. Senators John Barrasso (R-WY) Jim Inhofe (R-OK), Ranking Member of the Senate Committee on Environment and Public Works, Jeff Sessions(R-AL), Dean Heller (R-NV) and 26 other Senators introduced legislation to stop the Environmental Protection Agency (EPA) from taking over all private water in the United States. The ‘Preserve the Waters of the U.S. Act’ prevents the EPA and the Army Corp of Engineers (Corps) from using their overreaching ‘guidance’ to change legal responsibilities under the Clean Water Act (CWA).”
A related National Cattlemen’s Beef Association (NCBA) news release from yesterday stated in part that, “NCBA President J.D. Alexander said the legislation puts up a roadblock to EPA’s intentional end-run around the rulemaking process and Congress.”
And a news release yesterday from Rep. Robert Hurt (R., Va.) stated that, “[Rep. Hurt] today released the following statement after announcing introduction of the bipartisan Preserving Rural Resources Act – a bill that will protect the property rights of our farmers and foresters by preserving the natural resources they depend upon for their normal farming, silviculture, ranching, and rural economic activities and by protecting them from federal regulatory overreach by the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers. This legislation is cosponsored by Representative Jason Altmire (D-PA)…[T]he Preserving Rural Resources Act will clarify current law by codifying current exemptions for normal farming, forestry, and ranching activities and allow members of our agricultural and forestry community to utilize the resources in place on their private property in ways that will enhance their agricultural production and activity. Additionally this bill will allow our farmers to shift their time and resources from wading through abundant and costly government bureaucracy to expanding production and creating jobs in Central and Southside Virginia.”
A news release yesterday from the House Agriculture Committee stated that, “Today, Rep. K. Michael Conaway, Chairman of the House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management, held a public hearing to consider three pieces of legislation designed to mitigate unintended consequences of certain provisions of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and clarify the reach of new regulatory requirements to swaps activities that occur outside the U.S.”
Scott Patterson, Aaron Lucchetti and Julie Steinberg reported yesterday at The Wall Street Journal Online that, “‘I don’t know.’
“Those three words dominated a House subcommittee hearing Wednesday where lawmakers pushed MF Global Holdings Ltd. MFGLQ 0.00% executives to explain how $1.6 billion went missing from customer accounts as the securities firm collapsed.
“For more than two hours, three MF Global executives frustrated and stymied lawmakers in both parties who demanded answers about money transfers made in late October that left the securities firm’s customers with losses.”
The Journal article added that, “‘This reminded me of a hearing we had…on Enron,’ where no one would admit to anything, said Rep. Michael E. Capuano (D., Mass.).
“And the person lawmakers hoped would be their star witness kept her mouth shut. ‘On the advice of counsel, I respectfully decline to answer based on my constitutional rights,’ said Edith O’Brien, MF Global’s assistant treasurer.
“Much of the investigation centers on what the 46-year-old Ms. O’Brien knew about a $175 million transfer to fix an overdraft at an MF Global bank account at J.P. Morgan Chase & Co. in London. MF Global Chairman and Chief Executive Jon S. Corzine told lawmakers in December that Ms. O’Brien assured him that the transfer was proper.”
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