Farm Bill and the Budget Process –Policy Issues, Political Notes
Erik Wasson reported on Saturday at The Hill’s On the Money Blog that, “House Majority Leader Eric Cantor (R-Va.) caused a stir on Thursday when he seemed to indicate that a standalone farm bill would come to the House floor after the Nov. 6 election.
“But lobbyists said the remarks mean, at best, that a modified farm bill could be wrapped into a lame-duck bill dealing with expiring tax cuts and automatic spending cuts.”
Mr. Wasson explained that, “Republican aides, however, quickly made clear that Cantor was not expressing any new support for moving the farm bill as reported out of the House Agriculture Committee this summer.
“Washington farm lobbyists said that in the wake of Cantor’s comments, the last best hope for the 2012 farm bill to pass will be if it is riding on fiscal cliff legislation.”
The Hill update noted that, ““‘People on both sides of the aisle have made it clear to me that the only way it will be passed is as part of the fiscal cliff bill, if there is one,’ one lobbyist said.
“‘Wrapping it in would be the best possibility, I think,’ said another.”
Saturday’s article cited an additional source who pointed out that, “I think the odds favor it being attached to fiscal cliff legislation, although the latter may just extend the Bush tax cuts and postpone the sequester by 3 to 6 months.”
“Several lobbyists said that a status-quo election — one where President Obama remains in the White House and the balance of power in Congress remains as is — also provides the best hope for the farm bill, since it removes the temptation to go back to the drawing board,” The Hill article said.
In news regarding the “fiscal cliff,” The Washington Post editorial board opined on Saturday that, “The cliff consists of a combined $560 billion of tax increases and spending cuts — the latter skewed heavily toward defense. Economists generally believe that this sudden withdrawal of money from the economy would plunge the country back into a recession, though there is disagreement over just how deep that recession might be. The Congressional Budget Office suggests a 4-percentage-point drop in gross domestic product.
“Washington needs to come up with a plan — and fast. After all, as both the latest investment numbers and a recent warning by dozens of business leaders suggest, the mere threat of going over the cliff is already hurting the economy and killing jobs.
“Nothing will be attempted, much less accomplished, until after we know the election results in November. But it’s not asking too much for Congress to make significant progress in the lame-duck session that will follow, brief though that session may be. Such progress has to combine postponement of the most counterproductive aspects of the cliff with a clear and binding long-term plan, including both revenue increases and cuts in entitlement spending. Only credible action can restore the political and economic confidence upon which our prosperity depends.”
Also, Zachary A. Goldfarb reported on Friday at The Washington Post Online that, “The White House is weighing the idea of a tax cut that it believes would lift Americans’ take-home pay and boost a still-struggling economy, according to people familiar with the administration’s thinking, as the presidential candidates continue battling over whose tax policies would do more for the country.”
The Post article indicated that, “Without any new legislation, the nation would go over the so-called ‘fiscal cliff’ at the end of the year, leading to an automatic series of sharp spending cuts and tax increases. Many economists say that would tip the nation into recession.”
However, Politico reported on Saturday that, “The White House is pushing back against reports that it is considering another round of tax cuts.”
Highlighting an alternative perspective of some lawmakers, Suzy Khimm reported in Saturday’s Washington Post that, “The very notion of a ‘fiscal cliff’ suggests that the country is approaching a calamitous drop-off at the end of the year — and it would be tantamount to suicide to jump off.
“But a contingent of policy wonks and Democrats insist that letting the Dec. 31 deadline come and go — thus triggering automatic tax increases and spending cuts — could produce the best outcome for the country. Once the tax hikes have kicked in, the reasoning goes, Republicans would be hard-pressed to roll them all back and would have to accept a deal on taming the deficit that contains more new tax revenue than GOP lawmakers want.
“So some policy analysts and legislators say they are willing to go over the brink—and some are even gunning for Congress to do it.”
The Post article added that, “The cliff-divers don’t deny that the fiscal cliff would deal a serious blow to the economy, knocking the US back into a recession if the spending cuts and tax hikes remain in effect for all of next year. But these advocates say the immediate risk is overblown.”
However, with respect to the specifics of the $1.2 trillion in “sequestration” cuts from discretionary spending, Meghan McCarthy and Fawn Johnson reported on Thursday at National Journal Online that, “There’s a funny thing happening at federal agencies. When it comes to the details of the looming $1.2 trillion cut to their budgets, agency officials find themselves unable to explain just how those cuts would affect myriad programs on the ground. Instead, they have a unified message: talk to the Office of Management and Budget…From the Agriculture Department to the Pentagon to the Social Security Administration, more than a dozen agencies have given National Journal the same stock response, redirecting reporters to OMB.”
Recall that back in September, the White House released a report that provided some more detailed information on sequestration cuts; an analysis of that report as it relates to agriculture, was included in this update at the National Sustainable Agriculture Coalition Blog on September 19.
And, Fitch Ratings noted earlier this month (Oct. 17) that, “Looking beyond the immediate impact of the farm bill’s expiration, we expect federal spending relating to the agricultural sector to come under increasing pressure after the elections as attention shifts to the fiscal cliff and budgetary austerity. Fitch believes funding for programs such as crop insurance, long targeted by budget hawks in Congress as a source of potential savings, will inevitably put more pressure on farm incomes under new legislation.
“Regardless of who wins the November congressional and presidential elections, the stage will likely be set for a heated and possibly protracted fight over farm program spending moving into 2013. Any substantial cuts in long-term federal agriculture spending, if incorporated into a new post-election farm bill, could ultimately hit U.S. farmers’ incomes and debt service capacity.”
Meanwhile, Linda Vanderwerf reported on Saturday at the West Central Tribune (Willmar, Minn.) Online that, “Earlier this year, [House Ag. Comm. Ranking Member Collin Peterson (D., Minn.)] was optimistic about the new Farm Bill passing in the summer or early fall. After opposition from some Republican leaders, it never made it to the House floor.
“Peterson still hopes it can be passed in the ‘lame duck’ session after the election. The bill is needed to bring about necessary changes for dairy farmers, he said.
“Feed costs are affecting livestock farmers, Peterson said, and the new bill could help them.”
Note that the AP reported late last week that, “Two straight years without adequate rainfall have pushed some Kansas dairy farmers to the brink of bankruptcy because of high feed costs and skyrocketing fuel prices.”
Andrew Potter reported on Saturday at The Times-Republican (Marshalltown, Iowa) Online that, “U.S. Rep. Bruce Braley, D-Iowa, said he is very frustrated in House speaker John Boehner for the House’s inability to pass the Farm Bill. He said they need to pass the bill to provide stability in agriculture.”
Alternatively, Iowa GOP Rep. Steve King on Friday released a statement to highlight the Democratic Party opposition to the Farm Bill.
The two candidates for New York’s 21st Congressional District, House Ag. Comm. Member Bill Owens (D) and GOP challenger Matthew Doheny, squared off in a debate Thursday evening; and, Brian Dwyer reported at YNN (Syracuse, N.Y.) Online that, “The 2008 Farm Bill officially expired after Congress failed to reach an agreement. It provides incentives and subsidies to farms that they say help keep them in business.
“Congressman Owens says he’s worked to help the farmers, but says the GOP is standing in the way.
“‘We have put up four or five different bills that would have addressed that issue. The Republican leadership has refused to let those bills onto the floor. Even when they have been supported, on a bipartisan basis, by many Republicans in the house,’ Owens said.”
Candidates for the First Congressional District in Arkansas met for a debate last week at Arkansas State University; the AP reported on Friday that “[GOP Incumbent Rick Crawford], a member of the House Agriculture Committee, defended the farm bill approved by the panel that cuts money for the food stamp program by 2 percent. Crawford said the committee wanted to find the right balance between Republicans who wanted more cuts and Democrats who wanted no reductions in the program.”
The article added that, “[Scott] Ellington [the Democratic candidate] said he’s concerned about what will happen with the legislation when Congress returns after the Nov. 6 election.
“‘If folks think this farm bill is bad now … just wait until after the lame duck Congress takes over and see what happens,’ Ellington said. ‘I believe there will be even more cuts, and it’s very concerning.'”
And Nick Smith reported on Thursday at The Bismarck Tribune Online that, “The federal deficit, energy policy and the farm bill were sharply debated in Bismarck Thursday night by Rep. Rick Berg, R-N.D., and former Democratic Attorney General Heidi Heitkamp, [who are running for the U.S. Senate in North Dakota].”
The article noted that, “‘Agriculture has been a non-partisan issue for the last two years,’ Berg said. He noted that approximately 80 percent of the farm bill is food programs such as food stamps. Berg said the degree of food stamp cuts was the biggest sticking point between the House and Senate bills… Heitkamp called Berg’s efforts to try and force a vote on the farm bill by getting members of Congress to sign a discharge petition was too little, too late.”
In other policy news, Jan Ferris Heenan reported yesterday at the Sacramento Bee Online that, “California voters sent a clear message four years ago when they overwhelmingly approved Proposition 2, a ballot measure banning the ‘cruel confinement’ of certain types of farm animals; [however], “Proposition 2 did not provide specific dimensions for hen cages. It simply said that chickens needed to be able to perform certain behaviors, such as standing, turning and spreading their wings without bumping into the side of a cage or another hen.”
The Bee article noted that, “Attempts to grapple with the issue are also under way on Capitol Hill. The Humane Society and the United Egg Producers – unlikely bedfellows – teamed up with other supporters to back an amendment to the federal Egg Products Inspection Act. The legislation, co-sponsored by California Sen. Dianne Feinstein and strongly opposed by most cattle and pork producers, spells out national hen-housing standards and puts an end to the state-by-state approach.”
Yesterday’s item pointed out that, “Feinstein faces opposition from lawmakers such as Rep. Peter King, a Republican from Iowa, the nation’s No. 1 egg producer. He also backs an amendment to the federal farm bill that would block states from enacting their own laws like Proposition 2, which could keep Iowa eggs out of California.
“His amendment, the Protect Interstate Commerce Act, says that individual states cannot ban certain food products from outside their borders even if they object to how they were produced.”
Also yesterday, Andrew Martin penned a lengthy article on the front page of the Business Section in yesterday’s New York Times titled, “In Dairy Industry Consolidation, Lush Paydays;” and, the front page of yesterday’s Des Moines Register featured an article by Perry Beeman titled, “Runoff from Iowa farms growing concern in Gulf.”
A related article in yesterday’s Register noted that, “Rick Robinson, who follows the hypoxia issue for the Iowa Farm Bureau Federation, says the focus should be on all sources of nitrogen pollution — sewage treatment plants, suburban yards, golf courses — not just farms.
“‘They feel a little like they get hit over the head with this,’ Robinson said of farmers. At the same time, many feel their achievements have been underappreciated. ‘Farmers don’t feel like they’ve gotten credit for the progress they’ve made,’ he said.”
The AP reported on Friday that, “The worst drought in decades didn’t just shrivel corn and soybeans. It shrank economic growth too.
“That means normal weather would have lifted economic growth to 2.4 percent for the quarter, the Commerce Department said.”
And Mark Peters reported yesterday at The Wall Street Journal Online that, “For decades, farmers here [Hoxie, Kan.] have tapped a vast underground reservoir to irrigate their fields to grow corn, soybeans and wheat. Now they are reluctantly starting to reduce their water use, fearing a dwindling supply could otherwise make them the last generation to grow bumper crops in this arid patch of the High Plains.
“While Sandy is lashing the East Coast with heavy rain, much of Kansas and other parts of the Midwest are still feeling the effects of drought. Now, the years of heavy use have severely depleted this part of the Ogallala Aquifer—one of the world’s largest such subterranean water sources—to the point where some wells are drying up. Government estimates indicate there are two decades or less of adequate supply for irrigated farmland in parts of Kansas and Texas that rely on the Ogallala.”
Kelsey Gee and Curt Thacker reported yesterday at The Wall Street Journal Online that, “Hog prices are cooling down after a six-week rally, pressured by high domestic pork supplies and expectations that demand would decline around Thanksgiving as U.S. consumers switch to turkey and other meats.”
Meanwhile, Stephanie Strom reported in Saturday’s New York Times that, “It was repeated so often it was accepted as true: the typical American consumed 95 to 100 pounds of sugar each year. Health experts said that consumption was surely contributing to a nationwide crisis of obesity.
“But in a move that has largely gone unnoticed, the Agriculture Department, keeper of the statistics on America’s sweet tooth, has employed new methodology that overnight shaved 20 pounds off its estimate and brought the number down to a precise 76.7 pounds. The decision raises questions about the entire notion of per-capita consumption just as the battles over sugar and sweeteners reach a peak.”
Note also that the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS) has delayed the October 29, 2012 releases of Rice Stocks, Peanut Stocks and Processing and Crop Progress due to the hurricane-related closures of Washington, D.C. federal government offices. The rescheduled release times will be announced as soon as offices reopen.
Aaron Lucchetti and Julie Steinberg reported yesterday at The Wall Street Journal Online that, “As regulators and lawmakers plow ahead with investigations that began when MF Global tumbled into bankruptcy a year ago this week, yawning gaps in the New York company’s procedures for moving and keeping track of money are getting new attention.
“A private lawsuit expected to be updated early next month is expected to highlight such issues and how they are tied to the more than $1 billion that went missing from customer accounts as MF Global failed last October, according to people involved in the suit.
“A House financial services committee report, which will be released in the next few weeks, is expected to scrutinize how regulators handled MF Global. It is unclear how much focus will be given to the deficiencies in internal computer systems and procedures at the firm.”