Farm Bill: Political Notes- Budget and Spending
David M. Herszenhorn reported in today’s New York Times that, “The government’s budget deficit will soar to nearly $1.5 trillion this year, the nonpartisan Congressional Budget Office said Wednesday [report available here, related press briefing available here], an anticipated but politically galvanizing calculation that further intensified the partisan battle over the nation’s fiscal future.”
Today’s article noted that, ‘The budget office report offered a sober assessment.
“‘The economy has struggled to recover from the recent recession, which was triggered by a large decline in house prices and a financial crisis, events unlike anything this country has seen since the Great Depression’ the report said. ‘During the recovery, the pace of growth in the nation’s output has been anemic compared with that during most other recoveries since World War II and the unemployment rate has remained quite high.’
“Senator Kent Conrad, Democrat of North Dakota and chairman of the Budget Committee, described the new deficit figures as alarming. ‘CBO’s report should be another wake-up call to the nation,’ he said.”
Note that Sen. Conrad and House Budget Committee Ranking Member Chris Van Hollen (Maryland) held a press briefing yesterday on the new CBO estimates yesterday, a portion of Sen. Conrad’s comments from this discussion can be heard here (MP3- 2:30).
Damian Paletta, Janet Hook and Jonathan Weisman reported in today’s Wall Street Journal that, “The forecast will no doubt frame the coming months of debate. The first real tests of Mr. Obama’s spending priorities will come when the White House releases its 2012 budget Feb. 15, spelling out proposed spending increases and cuts.
“On the same day, House Republicans hope to begin debating a bill to extend government spending beyond the current expiration date of March 4. Less than a month later, Treasury officials predict the U.S. could hit the $14.3 trillion debt ceiling unless Congress raises it.”
The Journal writers indicated that, “House Budget Committee Chairman Paul Ryan (R., Wis.), a key negotiator who delivered the GOP rebuttal to the State of the Union speech, plans to use the new CBO numbers to set a ceiling for discretionary spending for the remaining seven months of the 2011 fiscal year. Republicans are eyeing cuts of between $60 billion and $100 billion in federal spending. White House officials are pushing for mostly flat spending.”
Lisa Mascaro reported yesterday at the Los Angeles Times Online that, “Lawmakers will soon face a showdown on spending when Congress must vote to approve raising the limit on the nation’s debt.
“Republicans voted on Tuesday, before Obama’s speech, to revert federal spending to 2008 levels. They say they will accept an increase in the debt limit only if further cuts are made.
“‘A few years ago, reducing spending was important. Today, it’s imperative,’ Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, said in the GOP’s official response to Obama’s speech.”
Erik Wasson reported last night at The Hill Online that, “CBO’s score would seem to toughen the climate for any new spending, but the Office of Management and Budget (OMB) insisted the news would not affect Obama’s budget, due the week of Feb. 14.
“‘Budget decisions have been made so the projections will not affect them,’ said OMB spokesman Kenneth Baer.”
Meanwhile, Kevin Bogardus reported yesterday at The Hill Online that, “A stable of former GOP aides has been hired by public television stations, children’s hospitals and other interest groups that fear they’ll be targeted for spending cuts by the Republican House.
“Most of the aides left Congress years ago, but many still have close ties to senior Republicans on Capitol Hill, including Speaker John Boehner (Ohio). They’ve been hired to try to convince the new GOP Congress that some public spending is worth continuing and not reducing.”
More specifically with respect to agriculture, Tom Steever reported yesterday at Brownfield that, “President Obama’s State of the Union address Tuesday followed a road map laid out by the nation’s farmers, according to U.S. Agriculture Secretary Tom Vilsack.
“In an interview Wednesday morning with Brownfield, Vilsack paraphrased the President, saying the chief executive wants to spend less and spend wisely; President Obama acknowledges that the U.S. needs to take the lead globally in innovation and in building while getting serious about deficit reduction. That, said Vilsack, is the same formula used by agriculture.
“‘If you look at farmers and ranchers around the country they recognize they can’t be overburdened with debt; they’ve reduced their debt significantly, they have embraced innovation so they’ve become far more productive,’ said Vilsack, ‘and as a result, we have seen significant increases in exports, which helps the bottom line for farms and ranching operations.’”
The entire Brownfield interview with Sec. Vilsack can be heard here.
In legislative branch perspective, Ron Hays reported yesterday at the Oklahoma Farm Report Online that, “The Chairman of the House Agriculture Committee, Frank Lucas of Oklahoma, says the best thing about the State of the Union Address on Tuesday evening from an agricultural perspective, is that President Barrack Obama did not specifically mention agriculture.
“The five year freeze on discretionary spending that President Obama called for may actually help in finding some money for the many different programs in the 2008 farm law that currently have no budget baseline associated with them. Lucas said he would be pleased if we could simply freeze agricultural spending where it is now- especially at the point that we begin to write the 2012 Farm Bill late this year or early next year.”
Farm Bill: Personnel and Policy
In other developments, Agri-Pulse reported yesterday that, “Effective on Monday, Jan. 31, Krysta Harden, Assistant Secretary for Congressional Relations at USDA, will assume the role of Chief of Staff for Agriculture Secretary Vilsack. John Berge, currently Deputy Assistant Secretary for Congressional Relations, will serve in the interim, per the line of succession, until a new Assistant Secretary for Congressional Relations is named.
“Before confirmation to her Congressional Relations post, Harden was CEO of the National Association of Conservation Districts for five years and earlier a VP of the Gordley Associates consulting firm handling American Soybean Association duties. She spent 12 years on Capitol Hill as farm hand and chief of staff for former Rep. Charles Hatcher, D-Ga.”
Also yesterday, Associated Press writer Steve Karnowski reported that, “A 2007 report that the federal government had paid $1.1 billion in subsidies to dead farmers sparked an outcry and has been frequently cited by critics who considered the payments a blatant example of wasteful spending. But a follow-up that found no fraud and determined nearly all the subsidies paid on behalf of dead farmers in recent years were proper has received little attention.
“According to the U.S. Department of Agriculture’s Farm Service Agency, just a little over $1 million out of the billions of dollars paid in subsidies in 2009 went to estates or business entities that weren’t entitled to them.
“‘Very little money is going to individuals who have not earned that money. Very little is being paid in error because a farmer has passed away,’ FSA Administrator Jonathan Coppess told The Associated Press.”
The AP article explained that, “Despite the concerns raised about lavishing taxpayers’ money on the dead, the government is legally obligated to make payments to farmers’ survivors, estates, partnerships and other business entities they were involved in if the farmers qualified for the benefit before they died. FSA officials said the agency has gone to great effort to make sure all its payments were legal and recover those that weren’t.
“FSA spokesman Kent Politsch said the agency began making changes even before the GAO report came out. It began matching payment information against Social Security death records for the 2007 fiscal year. The agency flagged 121,527 payments totaling $108 million in that fiscal year that were sent on behalf of people who had died. It found that in nearly every case, the dead farmers’ estates or other entities were legally entitled to the money.”
DTN Political Correspondent Jerry Hagstrom reported yesterday (link requires subscription) that, “The leaders of two major dairy groups agreed on many issues at the International Dairy Foods Association’s Dairy Forum here [Miami], but they continued to disagree on a National Milk Producers Federation proposal for supply management as part of reforms to the federal dairy program.
“International Dairy Foods Association CEO Connie Tipton and National Milk Producers Federation CEO Jerry Kozak made a joint appearance at the IDFA forum Wednesday, a day after IDFA released a study that concluded dairy farmers would have lost $626 million in payments between 2000 and 2009 if National Milk’s supply management program had been in place.
“After Tipton noted that the two groups work together on many nutrition and regulatory issues, Kozak, who once worked for IDFA, said, ‘We’re together a lot more than people realize.’”
Mr. Hagstrom added that, “Tipton and Kozak agreed that they should move forward with reform whether the price of milk is high or low when the next farm bill is written.
“Tipton said she agrees with some of the proposals in NMPF’s ‘Foundation for the Future’ dairy reform package, such as ending dairy price supports and the milk income loss contract program, starting a margin insurance program and simplifying federal milk marketing orders. However, she said she continues to oppose the supply management proposal that National Milk calls the Dairy Market Stabilization Program.”
A news release yesterday from Sen. Saxby Chambliss (R-Georgia) indicated that, “[Sen. Chambliss, Ranking Member of the Senate Agriculture Committee, and U.S. Senator Pat Roberts (R-Kan.) today sent a letter to Cass Sunstein, Administrator of the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) urging him to reduce burdensome and ineffective regulations impacting farmers, ranchers and rural America. Consistent with President Obama’s January 18th executive order, the Senators include a list of regulations and proposals that OIRA should consider a priority for review given the substantial and unjustifiable cost on stakeholders. In the letter, the Senators said they want assurance that the administration will review the actions by the U.S. Department of Agriculture (USDA) and the Environmental Protection Agency (EPA) and swiftly implement corrective action.”
The Wall Street Journal editorial board pointed out today that, “President Obama says he wants to purge regulations that are ‘just plain dumb,’ like his humorous State of the Union bit about salmon. So perhaps he should review a new rule that is supposed to prevent oil spills akin to the Gulf Coast disaster—at the nation’s dairy farms.
“Two weeks ago, the Environmental Protection Agency finalized a rule that subjects dairy producers to the Spill Prevention, Control and Countermeasure program, which was created in 1970 to prevent oil discharges in navigable waters or near shorelines. Naturally, it usually applies to oil and natural gas outfits. But the EPA has discovered that milk contains ‘a percentage of animal fat, which is a non-petroleum oil,’ as the agency put it in the Federal Register.
“In other words, the EPA thinks the next blowout may happen in rural Vermont or Wisconsin. Other dangerous pollution risks that somehow haven’t made it onto the EPA docket include leaks from maple sugar taps and the vapors at Badger State breweries.”
In other regulatory news, William Neuman reported in yesterday’s New York Times that, “Each year, federal inspectors find illegal levels of antibiotics in hundreds of older dairy cows bound for the slaughterhouse. Concerned that those antibiotics might also be contaminating the milk Americans drink, the Food and Drug Administration intended to begin tests this month on the milk from farms that had repeatedly sold cows tainted by drug residue.
“But the testing plan met with fierce protest from the dairy industry, which said that it could force farmers to needlessly dump millions of gallons of milk while they waited for test results. Industry officials and state regulators said the testing program was poorly conceived and could lead to costly recalls that could be avoided with a better plan for testing.
“In response, the F.D.A. postponed the testing, and now the two sides are sparring over how much danger the antibiotics pose and the best way to ensure that the drugs do not end up in the milk supply.”
Meanwhile, Philip Brasher reported earlier this week at the Green Fields Blog (Des Moines Register) that, “The Food and Drug Administration is asking drug manufacturers to voluntarily restrict the use of antibiotics in hogs and other livestock, and so far the agency has received a ‘good response’ from the companies, a senior official said today.
“The FDA wants to stop medically important antibiotics from being given to livestock for growth promotion and limit their use to treatment or prevention of disease.
“Mike Taylor, the FDA’s deputy commissioner for foods, said the agency is pursuing the voluntary approach because of the ‘very cumbersome, very time consuming’ legal process involved in changing the approved uses for drugs.”
Stephen Fidler and Anjali Cordeiro reported in today’s Wall Street Journal that, “With the risks of a double-dip recession apparently receding in most parts of the world, another economic challenge is emerging: inflation.
“Rising prices for food, energy and other commodities are reducing the disposable incomes of poor people across the planet, providing a trigger for street protests in North Africa and posing a deep conundrum for policy makers world-wide.”
The AP reported yesterday that, “The United Nations urged governments Wednesday not to impose export restrictions or other short-term measures to cope with rising food prices, saying they can actually make matters worse by driving global prices up.
“The U.N. Food and Agriculture Organization issued an updated policy guide for governments in the developing world who are grappling with the impact of high food prices.”
And Tom Polansek reported in today’s Wall Street Journal that, “U.S. wheat futures surged to fresh 29-month highs Wednesday as growing concern over food prices drove Algeria to make another large grain purchase on the world market.
“Soft red winter wheat for March delivery, the most-actively traded contract, reached a high of $8.61¼ a bushel at the Chicago Board of Trade, eclipsing an intraday high set last August when a drought led Russia to ban grain exports. Futures ended up 18¼ cents, or 2.1%, to $8.56½.”
Ben Geman reported yesterday at The Hill’s Energy Blog that, “The scores of Senate bills introduced Tuesday include a measure to block Environmental Protection climate change rules, and there’s more to come.
“Sen. David Vitter (R-La.) introduced a bill to ‘prohibit the regulation of carbon dioxide emissions in the United States until China, India, and Russia implement similar reductions,’ according to the Congressional Record.
“There’s more en route. Sen. John Barrasso (R-Wyo.) is planning a bill that would broadly prevent EPA and other federal agencies from addressing greenhouse gases under the Clean Air Act, the National Environmental Policy Act, and other statutes.”