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Supercommittee: Elusive Deal; and Farm Bill Implications

Supercommittee: Elusive Deal- Weekend Developments- Saturday

Jennifer Steinhauer and Robert Pear reported in Saturday’s New York Times that, “Just 72 hours before a deadline to present Congress with a plan to cut $1.2 trillion from the nation’s deficit, members of a joint Congressional committee remained at a deep impasse on Friday after Democrats rejected a new Republican proposal devised with the help of Speaker John A. Boehner.

The Times article explained that, “Despite time running out on the committee created by the summer agreement to raise the federal debt limit, negotiations were in disarray, with Republicans and Democrats even disputing what precisely divided them. One panel member said that he still had slim hope for a deal but that it would take an extraordinary development to end the stalemate and avoid a series of automatic cuts in 2013 that would reduce federal services and make substantial reductions in Pentagon spending.

“Seeking to reach at least a partial accord, Republicans made their six Democratic counterparts on the committee an offer that would get to roughly half of its goal — a retreat for an earlier plan with cuts in spending and revenue increases — but Democrats rejected it out of hand as inadequate. Democrats said the proposal was unbalanced because it was overly dependent on spending cuts with only a small amount of new revenue.”

Paul Kane and Rosalind S. Helderman reported in Saturday’s Washington Post that, “A series of bipartisan meetings late Thursday night and early Friday produced no breakthroughs, and perhaps the best chance in a generation to tame the government’s swelling debt, now at $15 trillion, continued to slip away.

By Friday evening, a sense of gloom enveloped the Capitol, which was nearly completely vacant as members of the House and Senate returned to their states for a week-long Thanksgiving break. Left behind were the dozen members of the Joint Select Committee on Deficit Reduction, Lawmakers and aides said they need a breakthrough by Monday night to leave enough time for getting an official audit of their work from the Congressional Budget Office.”

Naftali Bendavid and Janet Hook reported in Saturday’s Wall Street Journal that, “The White House has no plans for President Barack Obama to get involved in the supercommittee process after he returns to Washington Sunday from a trip to Hawaii, Australia and Indonesia.”

Meanwhile, National Journal congressional correspondent Major Garrett was a guest Friday on the Diane Rehm Show where he provided a very cogent analysis of the underlying issues plaguing the supercommittee- brief audio clip here (MP3- 1:10).

Also note that Devin Henry reported on Friday at the MinnPost.com webpage that, “[House Agriculture Committee ranking member Collin Peterson (D-Minn.)] said he’s seen no indication the 12-member bicameral committee will reach an agreement by its Wednesday deadline.”

And supercommittee member Sen. Pat Toomey (R-Penn.) delivered the weekly GOP address on Saturday highlighting issues associated with spending and the deficit.

 

Supercommittee: Sunday

Annie Lowrey and Robert Pear reported in Sunday’s New York Times that, “The second-ranking Senate Republican declared Saturday that the work of a special Congressional committee on deficit reduction was all but over, and said efforts to strike a bipartisan deal had been worthy but unavailing.

“As he emerged from his office in the Capitol, the Republican, Senator Jon Kyl of Arizona, a committee member, spoke of the panel in the past tense, using sober words to describe a seemingly unsuccessful 10-week quest for a compromise. Asked to describe the focus of a possible compromise, Mr. Kyl said, ‘I’m not sure there is one.’”

“But he did not completely close the door, saying that any announcement about the conclusion of the committee’s work would come from its two leaders: Senator Patty Murray, Democrat of Washington, and Representative Jeb Hensarling, Republican of Texas.”

Lori Montgomery reported in Sunday’s Washington Post that, “Republicans on the supercommittee held a conference call Saturday morning, and aides said members from both parties continued to talk by phone. But neither side was predicting a last-minute breakthrough. Instead, seven panel members booked appearances on the Sunday talk shows, as both sides readied their best arguments for why the other is at fault.”

A National Journal article from yesterday provided an overview of Sunday talk show appearances by Co-Chair Murray (CNN- State of the Union), related article, audio replay of interview (MP3-11:00);  Co-Chair Jeb Hensarling (Fox News Sunday),  audio clip (MP3- 2:04); Rep. Xavier Becerra (D-Calif.) (Fox News Sunday), audio clip (MP3- 2:46) related article; Sen. Pat Toomey (R-Penn.) (CBS Face the Nation) video clip and article; Sen. John Kerry (D-Mass.) and Sen. Kyl  (NBC Meet the Press) related video.

 

Supercommittee: Monday Morning

Naftali Bendavid and Janet Hook reported in today’s Wall Street Journal that, “Barring an unlikely, last-second breakthrough, the committee is expected to announce Monday that it failed to reach its mandated goal of writing a bipartisan bill to reduce deficits over the next 10 years by at least $1.2 trillion.”

The article added that, “Neither party comes out looking good, said former Sen. Judd Gregg (R., N.H.), who chaired the Senate Budget Committee. ‘All incumbents are in trouble—huge trouble,’ he said in an interview Sunday.”

“In the absence of a deal, automatic spending cuts of $1.2 trillion will be triggered throughout the government over a 10-year period, including $600 billion from the Pentagon.

They wouldn’t start until 2013, so Congress would have another year to avert them. But many lawmakers believe the committee was the best chance to reach agreement,” the Journal said.

Eric Lipton reported in today’s New York Times that, “The White House called on the 12 members of the special committee to finish their work, but with no expectation of a breakthrough, the leaders of the committee planned to issue a statement on Monday acknowledging that they had failed to reach an agreement. And lawmakers on the panel, which is evenly divided between the two parties, blamed one another for the failure.”

And Meredith Shiner and John Stanton, in an article today at Roll Call Online, provided a look at some of the immediate impacts of the debt panel collapse: “As both parties prepare to blame each other for the super committee’s likely failure, House and Senate leaders face the stark reality that they now have to take swift action to rescue key programs they were expecting the panel to extend.

Unemployment benefits, tax extenders, the payroll tax holiday and the Medicare ‘doc fix’ — which prevents doctors’ payments from being slashed — are all expiring measures that leaders hoped the super committee would be able to bundle into a final deal, fast-tracking them to long-term renewal. Short of a super committee agreement, which appeared out of reach after a weekend of little to no negotiations, leadership will have to move these pieces on their own, in addition to a spending bill to avert a government shutdown Dec. 16.”

 

Farm Bill Developments

With respect to the supercommittee’s impending failure, Chris Clayton reported yesterday at the DTN Ag Policy Blog that, “All of this now puts a deal on the farm bill in jeopardy. House and Senate Agriculture Committee leaders have decided they are waiting until they know there is a deal by the super committee before the aggies send the farm bill to the super committee members.”

It seems less likely House and Senate Agriculture Committee leaders are going to unveil actual farm-bill language at all before the super committee releases its entire proposal. That would minimize last-minute lobbying or outside scrutiny of the bill before it becomes a public part of the super committee package. The super committee’s bill, if one is unveiled, cannot be amended during floor debate,” yesterday’s DTN update said.

On Friday, prior to the imminent unfolding of the supercommittee, Reuters writer Charles Abbott had pointed out that, “If their [leaders of the Senate and House Agriculture Committees] plan is accepted by the super committee, the farm bill would be immune from amendment and could become law by the end of December. Critics say it would be a dangerous break from precedent of writing farm bills after broad public discussion.

“Some lawmakers doubt if Congress would pass a free-standing farm bill amid Tea Party-driven desire to reduce spending. The current farm law expires in fall 2012 and its successor could cost $480 billion over five years, most of it for food stamps.”

Also on Friday, Bloomberg writer Alan Bjerga reported that, “A plan to create an alternative farm subsidy in the U.S. will cost taxpayers more than the current ‘direct payments’ made to growers regardless of crop prices, Representative Jeff Flake said.

“The so-called shallow-loss insurance plan, which would pay out only when revenue falls, ‘could mean a huge new entitlement or expanded entitlement from where we are, which is the antithesis’ of the deficit-reduction goal of lawmakers, the Arizona Republican said today at a briefing in Washington.”

Philip Brasher also provided insight into the draft bill the Ag Committee leaders were considering on Friday; he reported that, “A draft summary of the new farm bill that lawmakers have been finalizing says farmers will have a new subsidy system to supplement the coverage they now have through crop insurance.

“Payments under the new program, called Ag Risk Coverage, would be pegged to falling prices or crop yields and cover a drop in a farm’s average revenue beyond 13 percent. Rice growers and other farmers who don’t like that proposed new system could opt for a price guarantee on their crop that would provide payments when crop prices fall below certain levels. Cotton farms would get a special new revenue-based insurance policy that they have been seeking.”

Mr. Brasher added that, “In exchange for the new programs, the bill would eliminate the $4.8 billion in fixed annual payments that now go to grain and cotton farms, according to the draft summary, which has been circulating on Capitol Hill. About 10 percent of those direct payments now go to Iowa.

“A spokeswoman for the House Agriculture Committee, Tamara Hinton, said the legislation was not final as of mid-day Friday. She said there were ‘still moving parts.’”

And a news release from the National Cotton Council (NCC) on Friday stated that, “The National Cotton Council commends the House and Senate Agriculture Committees for their diligent efforts in crafting a farm policy recommendation that is being delivered to the Joint Select Committee on Deficit Reduction. Although full details are not yet available, the current proposal includes a new crop insurance program for upland cotton. The program, known as the Stacked Income Protection Plan (STAX), is based on NCC recommendations.”

Chris Clayton reported on Friday at DTN that, “The new farm bill would eliminate direct payments while renaming and expanding the counter-cyclical program with higher target prices and new acreage formulas.

“Word came early Friday evening that no definitive bill language would be released Friday as was anticipated earlier in the day. House and Senate staffers also maintained that a draft document leaked Thursday night was simply that, a draft, and not the farm-bill language going to the Joint Committee on Deficit Reduction — more commonly called the super committee.”

Meanwhile, Mark Heller, writing yesterday at the Watertown Daily Times Online (New York), provided a closer look at some of the dairy issues that had been part of the Farm Bill debate leading up to the supercommittee collapse.

In other developments, a news release late last week from the Coalition for Sugar Reform stated that, “Reforming federal sugar subsidies can save American consumers up to $3.5 billion and generate 20,000 new jobs each year, a new study by Iowa State University researchers has found.

“The study shows that in the absence of current sugar policies, food industry jobs would increase as production and exports of sugar‐containing products grow, and as imports of such products from other countries decline.”

And the editorial board at the Minneapolis Star Tribune indicated on Friday that, “The impact of the farm bill isn’t limited to farmers. The nation’s food supply is at stake, which is why Americans should demand more transparency in the process.”

A daily radio news item from USDA on Friday pointed to the importance of federal crop insurance in the construction of the Farm Bill safety net.  To listen to this one-minute audio interview, which includes perspective from former USDA Chief Economist Keith Collins, just click here.

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Summary as of very early Monday:  If the supercommittee announces that it has failed to reach its goal, it appears to follow that the vehicle for new Farm Bill language would subsequently not exist.  Nonetheless, the work product of the Agriculture Committees over the past few weeks, which was still only circulating in draft form as of early Monday, will likely be used as a starting point for the Farm Bill process sometime next year.

Keith Good