FarmPolicy

August 1, 2014

Executive Branch, Budget Issues; and the Farm Bill

Categories: Audio /Budget /Farm Bill

Executive Branch Issues (Organizational Structure), and Budget News

Mark Landler reported in Saturday’s New York Times that, “President Obama on Friday announced an aggressive campaign to shrink the size of the federal government, a proposal less notable for its goal — the fight against bloat has been embraced by every modern-day president — than for the political challenge it poses to a hostile Congress.

“Mr. Obama called on lawmakers to grant him broad new powers to propose mergers of agencies, which Congress would then have to approve or reject in an up-or-down vote.  If granted the authority, he said, he would begin pruning by folding the Small Business Administration and five other trade and business agencies into a single agency that would replace the Commerce Department.

“The White House estimated that the consolidation would save $3 billion over 10 years and result in reductions of 1,000 to 2,000 jobs. The savings is a mere rounding error in the $3.7 trillion annual budget, but the numbers may be less important than the message that Mr. Obama wants to cut wasteful spending.”

The Times article explained that, “By putting the onus on Congress to provide the authority for streamlining the government, Mr. Obama is seizing a core Republican issue— the inexorable growth of the public sector in recent decades — and trying to turn it to his advantage. Even his language was reminiscent of Mitt Romney, the Republican presidential front-runner, who says he would use his experience in business to make government more efficient.

“It is not clear whether Congress, where much of Mr. Obama’s legislative agenda has languished, will go along with this initiative. Republicans were immediately skeptical, suggesting that the White House was more interested in honing its re-election message than in reducing the size of government.

“Even Democratic leaders expressed misgivings about folding the Office of the United States Trade Representative, a stand-alone agency with just 227 employees, into a large bureaucracy, saying it could harm American trade policy.”

From a technical standpoint, the Times article stated that, “Under the terms of the reorganization, five agencies — the Small Business Administration, the United States Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency, plus the business and trade functions of the Commerce Department — would be consolidated into a single agency focused on helping the private sector.

“Mr. Obama said he would elevate the director of the Small Business Administration, now Karen Mills, to his cabinet. The United States trade representative would retain cabinet rank, the White House said.”

Howard Schneider reported in Saturday’s Washington Post that, “Agencies such as the Office of the U.S. Trade Representative were established with a fairly distinct role, and former government officials and others said that agency, in particular, needs to maintain its stature.”

Iowa GOP Senator Charles Grassley indicated on Friday that, “The enactment of trade agreements has been a hard slog with the President.  Any reorganization that disrupts trade negotiations and expanded markets for U.S. businesses and farmers would cause me serious concern.  Consolidation that doesn’t hurt export opportunities might make sense.  Congress will need to look at this proposal carefully.  It’s not surprising that the President is focusing on this area for consolidation.  Trade is already a lower priority than it should be for this White House.”

Similarly, a statement from the American Soybean Association (ASA) on Friday noted in part that, “While the [ASA] supports initiatives to improve government efficiency and eliminate redundancy, we have strong concerns about at least one aspect of the President’s proposal, and that is with the plan to merge the Office of the U.S. Trade Representative (USTR) with other trade agencies. We believe that USTR should remain an independent agency within the Executive Office of the President (EOP), focusing on trade negotiations, trade agreements and trade enforcement. By being an independent office within the Executive Office of the President, USTR serves a critical function in supporting and balancing the divergent trade interests of each sector of the U.S. economy, while consistently advocating the reduction of trade barriers. USTR’s efforts have been vital to the growth of American agricultural exports. We are concerned that folding USTR into a massive Department of Commerce or Industry structure would significantly weaken the coordination role played by USTR on trade interests across sectors, and the work on agricultural trade opportunities and barriers would be diminished. We therefore support continuing the current structure and functions of the Office of the U.S Trade Representative.”

And David Nakamura reported in Saturday’s Washington Post that, “Obama noted before an audience of small-business owners at the White House that the federal bureaucracy includes five different entities involved in housing and more than a dozen that regulate food safety.”

Meanwhile, Jennifer Steinhauer reported in yesterday’s New York Times that, “For Speaker John A. Boehner and House Republicans, returning to the Capitol this week could have the awkward feeling of a couple waking up after a night of fighting.

“Mr. Boehner began 2011 with the heady wave of victory and ended the year in disarray when the Senate forced him and his members to accept a short-term extension of the payroll tax cut. Now, he begins the second session of the 112th Congress on defense, his leadership under scrutiny and his party facing an election-year attack from the White House.

“His challenge is not only to rein in his restive conference but also to preserve his party’s majority even as he fends off President Obama, who is making Congress his central opponent in his re-election bid. And rank-and-file Republicans are itching for accomplishments, like reducing regulations and changing the tax code, to sell in their districts.”

More narrowly, Reuters writers Richard Cowan and Thomas Ferraro reported on Friday that, “House Speaker John Boehner, hoping to spare fellow Republicans a second embarrassing defeat over payroll tax cuts, is prepared to navigate around rebellious Tea Party-aligned lawmakers to get a deal, according to congressional aides.”

And in more specific budget related developments, Friday’s Need-to-Know Daily Email from National Journal reported that, “Armed with a new defense strategy, Pentagon officials are planning to reveal on Jan. 26 the results of months-long internal deliberations over how to downsize military spending, before President Obama releases his own budget on Feb. 6. The coming era of austerity is expected to bring cuts to troop totals, overseas deployments and billion-dollar weapons systems, among other formerly untouchable Pentagon projects. Pentagon officials have been focused on meeting the mandate to trim more than $450 million from future spending before even beginning to address the additional $600 billion cut required by sequestration.”

Also, Pete Kasperowicz reported on Friday at The Hill’s Floor Action Blog that, “House Appropriations Committee ranking member Norm Dicks (D-Wash.) this week predicted that Republicans and Democrats would be able to negotiate a deal that avoids $1.2 trillion in automatic spending cuts under the sequestration process.”

 

Farm Bill Issues

Even as federal farm subsidy payments are forecast to decline for 2011, the budget remains an important, if not defining variable in the development of the 2012 Farm Bill.

Reuters writer Emily Stephenson reported on Friday that, “Farmers think Congress should seek cuts in agricultural spending but protect growers from volatile prices and low yields by retaining a safety net when it writes a new farm law this year, a Reuters survey released on Wednesday found.

“The random survey of 462 farmers and ranchers at the American Farm Bureau Federation’s annual meeting in Honolulu found 39.4 percent want the current program to continue, with some cuts.”

Friday’s article pointed out that, “‘I know there have to be cuts, and I’d like to see strong crop insurance as a safety net,’ said Gale Koelling, president of the Washington County, Illinois, Farm Bureau. ‘It probably costs the government less.’

Almost half of the survey participants supported shifting the emphasis of the farm program to protecting farms from revenue loss rather than setting prices.”

Mikkel Pates reported on Thursday at the Grand Forks Herald Online (N.D.) that, “House Agriculture Committee Chairman Frank Lucas, R-Okla., faces a tough task of justifying and delivering an adequate farm program — anything comparable to the expiring, popular 2008 farm bill — in the midst of a tightening budget.

“Lucas, who has served as chairman since 2010, came to Bismarck and Fargo on Thursday to help colleague Rep. Rick Berg, R-N.D., raise funds for his 2012 U.S. Senate race.

“But in his first visit to the state, Lucas faced a full conference room at the Fargo Holiday Room with representatives from banking, transportation, farming and other industries all asking for ongoing farm bill support for everything from agricultural research funding to preventing overreach by the Environmental Protection Agency.”

The article added that, “Participants urged Lucas to preserve crop insurance and other provisions as he grapples lawmakers who want to cut the budget.”

Last week’s article noted that, “‘If we are able to let a farm bill (pass) that achieves $23 billion in savings… we’ll be lucky people,’ [Lucas] said.

The budget pressure will be ‘horrendous’ when the issue comes up again, Lucas said. He expects the Senate to move first on the farm bill, and then the House Agriculture Committee will follow.”

Lucas is committed to a heavy focus on crop insurance, with some kind of revenue program for most crops.”

Brian Howell reported on Thursday at KFYR-TV Online (Bismarck, N.D.) that, “‘We have to come up with proposals that all commodity groups, or overwhelmingly all commodity groups, can support. Because if we fracture up, we won`t be able to get the critical mass to pass a bill on the floor of the United States House,’ said [Chairman] Lucas.”

And, an update posted recently at the Red River Farm Network Online (Grand Forks, N.D.) indicated that, “ House Agriculture Committee Chairman Frank Lucas told leaders of North Dakota farm organizations Thursday that budget pressures, and an inexperienced Congress make writing the next farm bill a huge challenge. After the failure of the super committee, Lucas says the House will start over on the farm bill, going through regular order. That opens it up to a struggle on the House floor. ‘The question you have to ask is what will our money allocation be for the next farm bill?’ Lucas says agriculture will be lucky if it only has to come up with $23 billion in savings. As the presidential campaign lights up, Lucas expects a bigger focus on the debt and deficit, and high commodity prices. He says the Senate Agriculture Committee will start the farm bill process; he hopes to have the bill on the president’s desk in August, but there are many unknowns.”

To listen to remarks from Chairman Lucas, who answered questions from North Dakota agriculture reporters, click on this Red River Farm Network link.  (The audio clip with Chairman Lucas lasts about six minutes).

Meanwhile, John C. Sherwood reported yesterday at the Battle Creek Enquirer Online (Mich.) that, “Upcoming debate in the U.S. Congress over the 2012 Farm Bill is likely to be difficult, U.S. Sen. Debbie Stabenow told a gathering of family-farm advocates Saturday in Battle Creek.”

“The [super] committee’s failure means a return to standard procedures in the Congress, where many House members — including some from Michigan’s own congressional delegation — already stand poised to ‘gut’ conservation, organic and nutrition programs, [Chairwoman Stabenow] said.

“However, [Chairwoman Stabenow] said, ‘We are steadily moving forward even in a climate of deficit reduction,’ with efforts that promote farmers markets, local food access and small growers.”

Kate Hessling reported on Saturday at the Huron Daily Tribune Online (Bad Axe, Mich.) that, “As chairwoman for agriculture, [Sen.] Stabenow is looking at a farm bill that has to be written.

Because there is a need for the federal government to decrease its deficit, budget cuts are inevitable. As a result, Stabenow said she has been listening to what’s important to Michigan and growers.

“‘The thing I’ve heard loudly and clearly is that there needs to be a safety net there when there’s a loss,’ she said. ‘Crop insurance is really important when there’s a loss because of bad weather. That’s when there needs to be support.’”

Justin L. Engel reported on Friday at The Saginaw News Online (Mich.) that, “SVSU [Saginaw Valley State University] was the latest stop for Stabenow — chairwoman of the U.S. Senate Committee on Agriculture, Nutrition and Forestry — in an agriculture-themed tour across Michigan, where she highlighted her committee’s progress on a new Farm Bill during visits in Grand Rapids and Lansing earlier this week.”

“Stabenow said she expects to have the bill ready for legislators to sign within ‘the first half of this year’…She said she hopes the bill makes the industry more stable for its workers when times get rough.”

John Kubal reported on Friday at The Brookings Register Online (S.D.) that, “[Democrat Tim Johnson, South Dakota's senior senator] said, ‘The message I get from the farmers and ranchers around the state is that they’re willing to give up direct payments in exchange for a better crop insurance program.’

“Asked if he thought ‘Congress would deliver,’ he replied, ‘I think so, but you never know. I think that the direct payments are as good as gone.’

“‘But instead, we’ll see about the crop insurance and the conservation programs.’”

In other Farm Bill news, Monica Eng reported on Saturday at the Chicago Tribune Online that, “Responding to a Tribune article on fraud risks in the federal free-lunch program, Sen. Dick Durbin on Friday sent a letter to Agriculture Secretary Tom Vilsack asking what his department will do to ‘bolster eligibility verification measures’ in the program.

Chicago Public Schools Inspector General James Sullivan recently found more than a dozen instances of falsified lunch applications among city and school employees at one West Side high school.

“Such problems could exist districtwide, Sullivan suggested, because of the financial incentives for schools to boost participation in the free- and reduced-price meal program and because of the lack of verification.”

The Tribune article noted that, “Paper applications to the program are based on self-reported income figures, but by federal mandate, CPS is not allowed to check more than a fraction of the qualifying applications.

“‘We have tried to figure out a way, since this program is so big and serves so many needy kids, to keep the book work and the red tape at a minimum,’ Durbin said in an interview. ‘When you do that, you run the risk of abuse.’

“‘I’ve asked the USDA to try to find some way to make sure the school system has the information it needs and still maintain the integrity of this program.’”

Saturday’s article indicated that, “The USDA did not immediately respond to a request for comment.”

Keith Good

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