FarmPolicy

December 18, 2018

Wednesday Morning Update: Policy- Budget Issues, Ag Economy; and, Regulations

Budget- Policy Issues

Jonathan Weisman reported in today’s New York Times that, “House Republicans called it streamlining, empowering states or ‘achieving sustainability.’ They couched deep spending reductions in any number of gauzy euphemisms.

“What they would not do on Tuesday was call their budget plan, which slashes spending by $5.5 trillion over 10 years, a ‘cut.’

The 10-year blueprint for taxes and spending they formally unveiled would balance the federal budget, even promising a surplus by 2024, but only with the sort of sleights of hand that Republicans have so often derided.”

The Times article added that, “The House Budget Committee will formally draft the budget on Wednesday, as Senate Republicans unveil their counteroffer. Like the House version, the Senate’s will balance in 10 years, aides to Republicans senators said. Like the House, the Senate will include language to help lawmakers repeal or reshape the Affordable Care Act this year. How the two chambers resolve their differences could be a central drama in Washington throughout the spring.”

Arthur Delaney reported yesterday at The Huffington Post that, “In his budget blueprint, Rep. Tom Price (R-Ga.), who took over for [Rep. Paul Ryan] as chairman of the House Budget Committee this year, seeks to balance federal spending over 10 years by cutting assistance to the poor while boosting the defense budget.”

The article stated that, “Price’s budget would cut food stamps and Medicaid in two ways. As Ryan unsuccessfully proposed in previous years’ budgets, the proposal released Tuesday would turn funding for Medicaid and the Supplemental Nutrition Assistance Program, informally known as food stamps, into ‘block grants.’ Both Price and Ryan modeled their proposals on the welfare reform of the 1990s, which used block-grant funding to prevent federal spending on the Temporary Assistance for Needy Families program — the program most closely associated with the term ‘welfare’ — from rising beyond a fixed amount.”

Mr. Delaney added that, “The second way in which the Price proposal cuts SNAP and Medicaid is through numerical reductions in both programs’ budgets. Though the budget summary doesn’t specify exactly how much to cut food stamps, it calls for $165 billion less in mandatory spending outside of health and retirement programs — a category in which SNAP is the largest program — over the next 10 years. Ryan’s budget last year called for SNAP cuts of $137 billion, or 18 percent.

Price’s new proposal goes much farther than the food stamp cuts contained in a farm bill Congress approved last year.”

The article pointed out that, “The food stamp cuts in Tuesday’s budget proposal are separate from an ongoing ‘review’ of the program by Rep. Mike Conaway (R-Texas), chairman of the House Agriculture Committee.”

Philip Brasher reported yesterday at Agri-Pulse that, “A long-term budget plan unveiled by House Republicans would leave farm bill programs virtually untouched.

“A budget resolution that GOP leaders hope to push through the House next week would direct the House Agriculture Committee to propose $1 billion in cuts over 10 years, but that would represent just a small fraction of total farm bill spending, and the reduction may never be enacted anyway.”

Mr. Brasher explained that, “House Agriculture Chairman Mike Conaway said the $1 billion, 10-year cut is smaller than the Budget Committee had originally been considering. Conaway declined to say what reductions his panel might propose to come up with the $100 million a year, though he ruled out considering the cuts to crop insurance that President Obama proposed in his fiscal 2016 budget. The total 10-year cost of programs covered by the farm bill, including nutrition assistance, approaches $1 trillion.

“Conaway and his Senate counterpart, Pat Roberts, R-Kan., have argued against making any cuts to farm bill programs because of spending reductions made in the new law enacted last year.

The authors of the budget resolution ‘gave some sensitivity to what we have already been through with a farm bill. The ink is just barely dry,’ Conaway said.”

The Agri-Pulse article added that, “The House resolution also includes a longstanding GOP proposal to turn the Supplemental Nutrition Assistance Program over to the states to the run, but has no chance of being enacted this year. Missing this year are any attacks on crop insurance and other farm programs.

Conaway reiterated that the committee would finish a ‘soup-to-nuts’ review of SNAP, formerly known as food stamps, before proposing any changes to the program.”

Meanwhile, at a House Appropriations Agriculture Subcommittee hearing yesterday, USDA Under Secretary Kevin Concannon indicated that the Department would grant a short-term 30 day comment period extension for the report of the Dietary Guidelines Advisory Committee.

More details on yesterday’s hearing, where the Dietary Guidelines issue was discussed in some detail, is available in this FarmPolicy.com update.

A news release yesterday from the House Ag Committee highlighted the comment period extension and noted that, “‘The 571 page report of the Dietary Guidelines Advisory Committee not only went way out of scope in dealing with non-nutritional science issues, the advisory committee potentially excluded influential scientific studies when crafting their recommendations,’ said [House Ag Committee Chairman Mike Conaway (R., Tex.)]  ‘Our constituents will use this additional time to ensure that all pertinent studies are submitted for review by the Secretaries.’

“Chairman Conaway along with Subcommittee Chairs Walorski and Rouzer wrote to Secretaries Vilsack and Burwell on March 3, 2015 requesting that the comment period be extended and that the Secretaries commit to fully reviewing and considering the comments they receive.”

Also yesterday, the Senate Appropriations Agriculture Subcommittee heard testimony from Sec. of Agriculture Tom Vilsack about the Departments FY 16 Budget request. This hearing occurred at the same time as the House Appropriations Ag Subcommittee hearing, but the news regarding the comment extension was not known at the time of this hearing.

During the discussion portion of yesterday’s Senate hearing, Subcommittee Chairman Jerry Moran (R. Kan.), in part, covered three key policy variables: Dietary Guidelines, Crop Insurance, and Bird Flu issues– complete details, including transcripts relating to these issues, has been posted here, at FarmPolicy.com.

After the hearing yesterday, a news release from Sen. Moran on the comment period extension indicated that, “‘I am pleased USDA heeded our call for an extension of the comment period to make certain stakeholders have enough time to review and comment on the lengthy report,’ Sen. Moran said. ‘There are real questions about whether the new set of Dietary Guidelines will be based on sound nutritional science, including the extensive, peer-reviewed literature that shows lean red meat is a part of a healthy diet. USDA and HHS should also reject portions of the advisory report that delve into issues well beyond the purview or expertise of the Dietary Guidelines Advisory Committee, such as the issue of environmental sustainability.’”

In other nutrition related news, Evan Halper reported on the front page of yesterday’s Los Angeles Times that, “Of all the issues the Obama administration is grappling with, a modest redesign of what food labels say about sweeteners might not have seemed among the more controversial. But ever since First Lady Michelle Obama unveiled the plan last year, a lobbying frenzy has ensued.

“The objections have come not only from candy makers and bottlers of soft drinks.”

The article noted that, “The governor of Massachusetts implored the administration to rethink its proposal. The governor of Wisconsin protested too. So did the government of Australia, which warned the move could violate international trade agreements.

The proposal being considered by the Food and Drug Administration would add a new line to labels on packaged products noting how many teaspoons of sugar had been added.”

 

Agricultural Economy

A news release yesterday from the American Bankers Association stated that, “Farm banks significantly increased agricultural lending by 13.6 percent in 2014 and held $94.6 billion in farm loans at the end of the year, according to the American Bankers Association’s annual Farm Bank Performance Report.

“Asset quality continued to improve at the nation’s 2,036 farm banks as non-performing loans declined to pre-recession levels. ABA defines farm banks as banks whose ratio of domestic farm loans to total domestic loans is greater than or equal to the industry average.

“‘The agricultural economy may be faced with headwinds in 2015, but farm banks are well positioned to continue serving the needs of farmers and ranchers across the country,’ said Brittany Dengler, ABA senior research manager, economic policy and research. ‘Banks hold nearly half of all farm loans and will remain an important source of ag credit.’”

 

Regulations

Cristina Marcos reported yesterday at The Hill Online that, “The House passed legislation on Tuesday to modify the selection process for members of the Environmental Protection Agency’s Scientific Advisory Board.

“Passage fell largely along party lines by a vote of 236-181.

“The bill would prohibit the board, which advises the EPA on its regulations, from appointing members who are registered lobbyists. It would also require that at least 10 percent of board members be from state, local or tribal governments.”

And DTN writer Todd Neeley reported yesterday that, “Though the U.S. Environmental Protection Agency is moving full speed ahead to finalize the waters of the United States rule yet this spring, county government and state agriculture department representatives told a House Agriculture Committee subcommittee Tuesday the agency has yet to consult with them on the rule.

“Representatives from the National Association of State Departments of Agriculture and the National Association of Counties called on EPA to withdraw the rule and start over on what they say should have been a collaborative approach from day one.”

The DTN article noted that, “EPA has received, by most estimates, in the neighborhood of 1 million comments on the proposed rule. On Monday, EPA Administrator Gina McCarthy told an audience at the National Farmers Union conference in Wichita, Kansas, that the rule would be sent to the White House Office of Management and Budget soon.

“Members of the House Conservation and Forestry subcommittee were told by a panel Tuesday the rule comes at a time when EPA has experienced a number of years of budget cuts that have led to staff reductions. Either the rule really is proposed to clarify exactly what are waters of the United States to save money and time on enforcement, they said, or the rule represents an expansion of federal jurisdiction that will be left in the hands of state and local governments to enforce.”

Keith Good

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