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Farm Bill Developments and Budget Issues

Farm Bill Developments

David Rogers reported yesterday morning at Politico (“3 bills take aim at milk prices”) that, “With just days left, House Republicans continued to struggle Saturday night over how to untangle themselves from a New Year’s imbroglio over dairy policy and their refusal to allow floor debate on a more comprehensive five-year alternative in this session of Congress.

“Absent some action, an outdated 1949 farm law kicks back in on Tuesday, Jan. 1, requiring the Agriculture Department to begin buying up dairy products at a rate of $38.54 per hundredweight, or more than double the prevailing price today.

“No one truly knows the full impact at the grocery story, but the threat of $6 per gallon of milk brought President Barack Obama off the sidelines Friday and accelerated efforts to find a fix to be voted on as early as Monday.”

(Note that recent news items on the dairy issue can be found here (NBC “Today” show on Saturday), here (front page of Saturday’s Des Moines Register), and here (Op-Ed in today’s Wall Street Journal)).

In his article yesterday, Mr. Rogers explained that, “Toward this end, not one but three different bills were posted Saturday night on the House clerk’s website, each a candidate for action but also adding to the confusion as to the direction the House will take.

“The first draft bill fills 78 pages and reflects an agreement between the leadership of the House and Senate agriculture committees on what amounts to full extension of current programs through the end of this fiscal year, Sept. 30. New disaster assistance is included with a major revamp of the milk program to help producers better manage production levels and insure their margins at a time of high feed costs.

“The second bill, an 11-page measure, is far narrower and more short-term. The third fills just two pages and appears confined to defusing the threatened spike in milk prices next month.”

Yesterday’s Politico article also noted that, “The dairy issue was just one of several reasons for this stall but stood out because of Boehner’s [House Speaker John Boehner (R., Ohio)] personal opposition to the changes, together with his allies in the food processing industry.

“That resistance evidently remains a factor given the second and third stripped-down farm bill extensions filed Saturday night. This testified to the continued tensions between the committees and top GOP brass, and with the House returning Sunday, a decision will have to be made that has the best chance of passing.

“Yet another, fourth possibility hinges on whether the Senate can, in fact, reach a deal Sunday on extending some of the Bush-era tax cuts expiring this week.

“In this case, a 33-page draft extension has been prepared to be included in that deal. It also runs through Sept. 30, but in deference to Republican leaders, it does not include at this stage the new dairy policy language.”

Erik Wasson reported yesterday morning at The Hill’s On the Money Blog that, “Late Saturday night, House Republicans posted the three bills on the House Rules Committee website, setting up possible Monday votes under layover procedures put in place in this Congress.

One bill would extend the expired 2008 farm bill, which expired Sept. 30, for one year. The second would provide for a farm-bill extension through January and a third would just extend dairy programs through January.”

The Hill update added that, “‘Clearly, it is no longer possible to enact a five-year farm bill in this Congress.  Given this reality, the responsible thing to do – and the course of action I have long encouraged if a five-year bill was not possible – is to extend the 2008 legislation for one year. This provides certainty to our producers and critical disaster assistance to those affected by record drought conditions,’ said House Agriculture Committee Chairman Frank Lucas (R-Okla.) in a Sunday statement.

“‘The legislation posted is the result of discussions with Ranking Member [Collin] Peterson [D-Minn.] and my colleagues in the Senate.  It is not perfect – no compromise ever is – but it is my sincere hope that it will pass the House and Senate and be signed by the President by January 1,’ he added.”

Yesterday’s article also noted that, “The first bill abolishes existing dairy price supports in favor of a reformed system included in House and Senate draft farm bills that failed to pass both houses this year. The new dairy system is aimed at guaranteeing profit margins rather than supporting prices and is favored by milk producers who argue that the rising cost of inputs like feed makes the existing system too weak for dairy farmers.

The dairy changes may face significant opposition in the House. This summer Speaker John Boehner (R-Ohio), long a farm bill skeptic, described existing dairy programs as ‘Soviet-style.’ The changes may be key to getting House Agriculture Ranking Member Collin Peterson (D-Minn.) and other rural Democrats to support a one-year extension, however…‘These reforms are the primary reason that I am even willing to consider any extension.’ Peterson said Sunday, regarding the dairy program changes.”

Meanwhile, in a separate article posted yesterday afternoon at Politico (“GOP, industry rifts bring milk imbroglio to head”), David Rogers indicated that, “The first draft fills 78 pages and reflects a weekend agreement between the House and Senate agriculture leaders on what amounts to a full extension of farm programs through the end of this fiscal year on Sept. 30.

“That could mean another round of direct cash payments to already-profitable growers enjoying high commodity prices — a costly, antiquated subsidy that both committees have sought to end. But both House Agriculture Chairman Frank Lucas (R-Okla.) and Senate Agriculture Chairwoman Debbie Stabenow (D-Mich.) are committed to February markups, and if leadership cooperates, a five-year bill could be enacted before the payments go out in October.”

Mr. Rogers added that, “That committee extension includes new disaster assistance, a priority for Stabenow. But the bigger issue is a major rewrite of the dairy program to help producers better manage milk production levels and insure their margins at a time of high-feed costs.”

Writing last night at Politico (“30-day farm bill called ‘poor joke’”), David Rogers reported that, “House Republican leaders faced bipartisan criticism Sunday for proposing just 30 day patches to forestall the threatened spike in milk prices next month — with senior lawmakers mocking the approach as a ‘poor joke on farmers’ and asking who plants a crop for just 30 days.

“At a lively GOP whip meeting, House Agriculture Committee Chairman Frank Lucas pressed hard for his longer-term extension to provide more certainty and the time needed to write a new farm bill next year. But the Oklahoma Republican met stiff — and colorful — resistance from Speaker John Boehner (R-Ohio) who went so far as to liken new dairy provisions in the Lucas bill to ‘communism.’

The exchanges between the two men continued in a meeting of the full GOP conference Sunday night, where Boehner again laced into the dairy program. But Lucas — the traditional ‘good soldier’ for his party — held his ground. And the back-and forth illustrates the problems still facing Boehner as he tries to untangle himself from the milk crisis brought on in large part because of his refusal to allow floor debate in this Congress on a full-scale, five-year farm bill.”

Mr. Rogers noted that, “Going into Sunday night, leadership aides denied press reports that agreement had been reached on a long term extension,” and added that: “Lucas left no doubt that the two short-term bills were not his idea. In the whip’s meeting he was joined by Rep. Michael Conaway (R-Texas), a fellow member of the Ag committee who also made light of the proposals. And Minnesota Rep. Collin Peterson, the ranking Democrat on the House Ag panel, weighed in with his own public statement later.

“‘The 30-day extension approach is a poor joke on farmers that offers no certainty, just more empty promises from the Republican leadership,’ Peterson said, and he warned also that he would oppose any substitute bill ‘that would fail to reform the dairy safety net.’

“Indeed, the Democrat is the lead architect of the dairy provisions so opposed by Boehner and he fears now all the pressure will come from the speaker to strip out that language before the measure comes to the floor.”

Mr. Rogers also pointed out that, “Part of the waiting game is owed to ongoing talks in the Senate over which Bush-era tax cuts should be allowed to expire a year’s end.

“If a Senate deal were reached, a farm bill extension through the remainder of this fiscal year ending Sept. 30 could be included. And a 33-page draft has been prepared to accomplish this without the dairy language that Boehner opposes.

“For this reason, the speaker may find it better to wait until he knows the outcome of the Senate talks before committing himself to one of the three options filed Saturday.”

Russell Berman reported last night at The Hill Online that, “A proposal for a one-year extension of the farm bill to prevent a spike in milk prices is gaining support among House Republicans in the waning days of the 112th Congress.

“Lawmakers discussed the issue at a House Republican conference meeting Sunday night, and members said the leadership was likely to bring up an extension Monday or Tuesday, possibly attached to legislation dealing with the ‘fiscal cliff.’ If no deal is reached to prevent the fiscal cliff, a farm bill could be brought up as a separate measure, members said after the meeting.

“‘I think we’ll want to do something if it’s not in the Senate bill,’ Rep. Tom Cole (R-Okla.) said. He said lawmakers applauded when the chairman of the House Agriculture Committee, Rep. Frank Lucas (R-Okla.), briefed them on the status of the bill during the meeting.”

Chris Frates noted last night at National Journal Online that, “Cole said Republicans cheered the idea of including a nine-month farm bill extension in a final deal.”

Siobhan Hughes and Bill Tomson reported in today’s Wall Street Journal that, “Even though Republican and Democratic committee leaders back a one-year extension, House Republican leaders haven’t committed to bringing up a farm bill, a top Republican farm negotiator said late Sunday, leaving the future of farm policy up in the air.

“‘Leadership has not committed themselves to anything,’ House Agriculture Committee Chairman Frank Lucas (R., Okla.) told reporters.

“‘We’ll see what evolves over the next 24 hours,’ he added.”

Ellyn Ferguson reported yesterday at Roll Call Online that, “The Congressional Budget Office estimates it would cost $986 million to renew and extend the 2008 farm law for the rest of fiscal 2013, according to a document issued Sunday night.

“House leaders have posted such an extension, along with two one-month bills — all unnumbered — and members could consider any one of them as early as Monday.

The longer-term extension also includes nearly $850 million in disaster aid, and would fund a series of expired programs by trimming projected spending on direct payments by $1.3 billion over 10 years.

The Roll Call article added that, “The CBO said that direct payments scheduled to be issued in October — the start of fiscal 2014 — would be trimmed to 82.5 percent of costs and account for a savings of $146 million in outlays.

The extension through the remainder of fiscal 2013 also would include several ‘orphan’ programs that were in the 2008 farm bill (PL 110-246) but which lost their mandatory funding.”

Yesterday’s update noted that, “The one-year extension would also renew and extend agriculture disaster assistance programs that expired on Sept. 30, 2011, a year before most of the 2008 farm bill did.”

Bloomberg writers Alan Bjerga and Derek Wallbank reported yesterday that, “[Sen. Ag. Comm. Chairwoman Debbie Stabenow], a Michigan Democrat, said in a separate statement: ‘While the Senate passed a bipartisan five-year farm bill in June that cut subsidies and reduced the deficit, the lack of action by the House Republican leadership has put us in a situation where we risk serious damage to our economy unless we pass a temporary extension.’

“The agreed-upon draft bill would extend current law, along with disaster aid for producers affected by this year’s U.S. drought and changes to current milk policy, through Sept. 30. It would reduce mandatory outlays by $30 million through fiscal 2022, according to the Congressional Budget Office. The bulk of the spending would come in the first year, and as such it would actually increase spending by an estimated $555 million through fiscal 2017.”

The Bloomberg article added that, “Agriculture Secretary Tom Vilsack today warned that consumers will pay the price without a new farm bill.

“‘Consumers, when they go in the grocery store, are going to be a bit shocked when instead of seeing $3.60 for milk, they see $7 a gallon for milk,’ he said on CNN’s ‘State of the Union’ program.    ‘That’s going to ripple throughout all of the commodities if this thing goes on for an extended period of time.’”

A replay of  Sec. Vilsack’s appearance on yesterday’s “State of the Union” program is available here; also note that Sec. Vilsack was also interviewed by CNN’s Candy Crowley in a “Getting to Know” segment yesterday, video replay here.

Chairwoman Stabenow was also on yesterday’s CNN “State of the Union” program and noted the budget savings contained in the Farm Bill in a portion of her remarks- audio clip (MP3- 1:36).


Budget Issues

In the broader budget picture, Jonathan Weisman reported in today’s New York Times that, “Senate leaders on Sunday failed to produce a fiscal deal with just hours to go before large tax increases and spending cuts were to begin taking effect on New Year’s Day, despite a round of volatile negotiations over the weekend and an attempt by Vice President Joseph R. Biden Jr. to intervene.

“In seesaw negotiations, the two sides got closer on the central issue of how to define the wealthy taxpayers who would be required to pay more once the Bush-era tax cuts expire.”

Lori Montgomery and Paul Kane reported in today’s Washington Post that, “Vice President Joseph Biden and Sen. Mitch McConnell were locked in urgent talks late Sunday over the ‘fiscal cliff’ after Democrats offered several significant concessions on taxes, including a proposal to raise rates only on earnings over $450,000 a year.

“With a New Year’s Eve deadline hours away, Democrats abandoned their earlier demand to raise tax rates on household income over $250,000 a year, as President Obama vowed during the recent presidential campaign.

They also relented on the politically sensitive issue of the estate tax, promising to stage a vote in the Senate that would guarantee that taxes on inherited estates remain at their current low levels, a key GOP demand.”

And Janet Hook and Siobhan Hughes reported in today’s Wall Street Journal that, “In the absence of a bipartisan deal, Mr. Reid is preparing for a Monday vote on a bill to carry out Mr. Obama’s backup proposal, which tackles only a few items on the legislative agenda, including extending current tax rates for income up to $250,000 for couples filing jointly. Democrats are confident they could pass the bill through the Senate. A key question is whether the House, which returned Sunday evening, would approve it if it doesn’t enjoy broad bipartisan support in the Senate.”

Keith Good