Federal spending priorities, although always an important consideration, have increasingly become a salient political variable since the financial collapse of 2008. Federal policies to stabilize markets following the U.S. economic meltdown, implemented by both the Bush and Obama administrations, were extremely costly and not without controversy. Projected costs and savings contained in the Patient Protection and Affordable Care Act, which became law in March of 2010, followed by a Tea Party infused midterm election, only served to heighten the budget issue as a potent political consideration for lawmakers.
Following the 2010 elections, voters observed ongoing negotiations between the GOP Congress and the Obama administration over the issue of the federal debt (see “Obama vs. Boehner: Who Killed the Debt Deal?”) where a “grand bargain” on federal tax and spending issues was never reached. The negotiations culminated last summer in the creation of the “Super Committee,” which itself failed in November. In the meantime, the U.S. had it its credit rating downgraded.
Last month, the House of Representatives passed a FY 2013 budget outline which has now become an issue in the 2012 presidential campaign- last week President Barack Obama sharply criticized it, while the presumptive GOP nominee Mitt Romney embraced it.
Carol E. Lee reported in today’s Wall Street Journal that, “President Barack Obama delivered a blistering critique of the House Republican budget Tuesday, calling it a ‘radical’ proposal, ‘a Trojan horse’ and ‘a prescription for decline’ and tying it directly to Mitt Romney, the GOP candidate the White House believes Mr. Obama will face in November.”
The Journal article noted that, “House Speaker John Boehner (R., Ohio) dismissed Mr. Obama as ‘unserious’ about tackling the country’s economic challenges because he is focused on campaigning over governing.”
Reuters writer Tom Polansek reported yesterday that, “North Dakota farmer Justin Zahradka will plant wheat this spring on 40 acres that has been off-limits for two decades, protected by a government conservation program that is shrinking as high crop prices make farmland more valuable.
“The 18-year-old high school senior leased the land a year ago from a neighbor who opted not to re-enroll it in the federal Conservation Reserve Program, a scheme that pays farmers and landowners nearly $2 billion annually to leave land idle in order to protect wildlife and the environment.
“After loosening up the soil with vegetables last year, he has high hopes for a good harvest. His acres are part of a total 1.7 percent rise in the number of acres of U.S. field crops that farmers are projected to plant this spring, according to Friday’s annual U.S. Agriculture Department plantings survey.”
Four GOP members of the House Agriculture Committee (Chairman, Frank Lucas (Okla.), Randy Neugebauer (Tex.), Marlin Stutzman (Ind.), and Rick Crawford (Ark.)) held a Farm Bill field hearing on Friday at Arkansas State University in Jonesboro, Ark.
At the opening of the hearing, Chairman Lucas pointed out that, “Today, we’ll hear from a wide variety of producers from across the Southeast. I expect we’ll hear a different perspective than we got in the Northeast and Midwest.
“That’s why it’s so important that we offer a choice of policy options. The broad range of agricultural production makes our country strong, but it also creates challenges when we’re trying to write a single Farm Bill to support so many different regions and commodities.”
Naftali Bendavid and Damian Paletta reported in today’s Wall Street Journal that, “The House approved a Republican budget Thursday after a heated two-day debate that underlined the nation’s political divide and forecast a battle at year’s end over an array of scheduled spending cuts and tax increases.”
The article noted that, “The plan almost certainly won’t become law, given opposition by President Barack Obama and Senate Democrats, but both parties say it will help frame the campaign for the White House and control of Congress. Each side is counting on the November election to give them an upper hand in the debate.
“The vote was 228-191, with all Democrats and 10 Republicans opposing the GOP budget.”
Jonathan Weisman reported in today’s New York Times that, “Under the Ryan plan, spending would be cut $5.3 trillion below President Obama’s budget through 2022. Medicare would be reduced by $205 billion. Medicaid and other health programs would be cut $770 billion. Other entitlement programs, including welfare, food stamps, agriculture subsidies and transportation, would be cut by nearly $2 trillion.”
David Rogers reported yesterday at Politico that, “Republicans pushed toward House passage on Thursday of their new budget plan after crushing a bipartisan alternative Wednesday night and smoothing out internal GOP differences over the handling for future funding for disasters.
“Prodded by party leaders, the Budget Committee backtracked from its earlier demands that all such emergency assistance be fully offset within the strict spending caps set in the resolution.”
Pete Kasperowicz reported yesterday at The Hill’s Floor Action Blog that, “The House meets Thursday at 9 a.m., and after taking up a few last alternatives, members will approve the budget resolution offered by House Budget Committee Chairman Paul Ryan (R-Wis.).
“Members rejected three budget alternatives on Wednesday night — that included the 0-414 drubbing of a plan based on the Obama administration’s budget plan.”
Daniel Newhauser reported today at Roll Call Online that, “The House floor today will become the Baskin-Robbins of budgets: Every political persuasion has its own flavor.
“Members have already said they will double-dip and vote for multiple spending plans, but with seven budgets to consider during floor debate, it is becoming increasingly clear that Budget Chairman Paul Ryan’s blueprint is the only one that can pass the chamber.
“Even if the Wisconsin Republican’s $1.028 trillion plan wins out, however, it would be a symbolic victory at best. Democratic leadership has pointed out that last summer’s Budget Control Act is the law of the land and they and the Senate will stick to its $1.047 trillion level.”
Katie Micik reported yesterday at DTN that, “Farmers are coming off one of their most profitable years in history and few expect a repeat, according to the latest DTN/The Progressive Farmer Agriculture Confidence Index.
“They remain cautiously optimistic, with an overall survey value of 108.5, but show great divides when asked about their present situation and their expectations for the future. Farmers assess their present situation at a strongly positive value of 140.2, while expectations for the next 12 months notch a pessimistic low at 87.4.
“A value of 100 is considered neutral with higher values indicating optimism and lower values indicating pessimism. DTN surveyed 500 farmers and ranchers across the country between Feb. 27 and March 9. DTN conducts the survey before planting, before harvest and after harvest.”
Farm Bill: House Agriculture Committee Field Hearing- Illinois
Producers Seek Certainty- While Advising, “Do No Harm.”
After a mild winter and unseasonably warm spring, in which a few Midwestern producers have already started to plant corn, five members of the House Agriculture Committee (Chairman, Frank Lucas (R., Okla.), Leonard Boswell (D., Iowa), Mike Conaway (R., Tex.), Randy Hultgren (R., Il.) and Bobby Schilling (R., Il.)) came to the 17th Congressional District on Friday to hear farm policy testimony from grain and livestock producers as the 2008 Farm Bill’s expiration draws closer.
Producers sought to assist lawmakers in an effort to bring policy clarity and direction in the midst of an increasingly volatile agricultural environment. Illinois farmer David Erickson stated that, “I encourage your continued work to complete the farm bill legislation this year and to make it a five-year program that doesn’t rely on temporary extensions,” while Bill Gerard indicated that, “I’d like to see us pass a five year farm bill this year. We farmers are businessmen, and we depend on the stability and certainty of long term farm policy.” Minnesota farmer John Mages added that, “We need a five year farm bill for the same reason we need long term tax policy. We need to be able to go to the banker and be able to make plans for the future.”
David Rogers reported yesterday at Politico that, “Did no one learn anything from last summer? Did 2011 not happen?
“It can seem that way in Congress these days as Republicans bring their new budget resolution to the House floor next week, hoping to push the reset button on Medicare reform and score a trifecta by rewriting the debt deal struck with President Barack Obama last August.”
Mr. Rogers stated that, “Leading the charge is House Budget Committee Chairman Paul Ryan, who is most passionate about getting Washington refocused on long-range entitlement changes. But to protect himself on the right, the Wisconsin Republican risks taking the House in the opposite direction, back to the same divisive fights over appropriations that consumed much of last year.
“In a single stroke, Ryan would unilaterally lower the spending caps set for 2013, shift billions more to defense than prescribed under the 2011 Budget Control Act and roll back across-the-board spending cuts due in January by substituting a new formula — also designed to shield the Pentagon.”
Naftali Bendavid reported yesterday at The Wall Street Journal Online that, “Rep. Paul Ryan’s budget [complete outline here, summary tables here] instantly became the centerpiece of an election-year debate over the size of government on Tuesday, thrusting back into the spotlight a topic—the deficit—that has been largely overlooked by the presidential candidates.
“Democrats said his plan promises drastic savings without specifying what would be cut and without raising taxes on the wealthy, as President Barack Obama has proposed.
“Mr. Ryan (R., Wis.), who heads the House Budget Committee, said his plan would put the U.S. on a sound economic path by spending $5.3 trillion less than Mr. Obama recommends over 10 years, resulting in a budget deficit that would be $3.3 trillion narrower.”
DTN Markets Editor Katie Micik reported yesterday that, “The commodity title remains the most contentious piece of the farm bill and is making it difficult for the Senate Agriculture Committee to reach an agreement by Memorial Day, Chairwoman Debbie Stabenow said Monday.
“Stabenow, a Michigan Democrat, gave the keynote address Monday at the National Grain and Feed Association annual conference.
“‘I think the biggest challenge is getting the commodity title right because we have so many different regions and so many different commodities that when we move from direct payments to a risk-based model not every commodity has the same access to crop insurance, the same coverage in crop insurance. So we really have to work that through,’ Stabenow told DTN on the sidelines of the meeting.”
Joanie Stiers reported yesterday at The Register-Mail Online (Galesburg, Il.) that, “The No. 1 farm bill issue for David Serven’s family farm is crop insurance.
“‘The risk level that is there today that our grandfathers never saw before is immense,’ said Serven, a fourth-generation corn and soybean farmer in southern Knox County. ‘Crop insurance to me is the safety net we need to keep there.’
“The current farm bill expires at the end of this year, and the ongoing discussion about future U.S. farm policy comes at an interesting time. The agriculture economy is strong and the government faces a growing deficit that will prompt significant cuts. Meanwhile farmers contend with an unseen level of financial risk to produce Illinois’ major commodities: Record land values, historically high costs for everything from fertilizer to seed, and increased pressure to ‘pre-pay’ for those inputs one or two years ahead of a crop’s harvest. The crop market proves highly volatile, with large market swings in a shorter period of time.”
Farm Bill: Background for Today’s Senate Ag Committee Hearing
DTN Political Correspondent Jerry Hagstrom reported yesterday that, “American Farm Bureau Federation President Bob Stallman will tell the Senate Agriculture Committee Thursday that Farm Bureau will consider supporting farm bill proposals that are alternatives to its catastrophic loss proposal.
“In a telephone call to reporters, Stallman said the Farm Bureau board, which voted last week to consider supporting other proposals, has concerns that its approved policy ‘is revolutionary’ and that the Congressional Budget Office has not scored the measure at a time that the Senate Agriculture Committee is headed toward markup of the bill.
“Stallman also acknowledged that the Arkansas, Louisiana and Mississippi Farm Bureaus have dissented from the national policy. Farm Bureau has ‘no secrets,’ Stallman said, noting there is a formal dissent process within the organization.”
Katy O’Donnell reported yesterday at National Journal Online that, “At $1.2 trillion, the federal deficit will be $93 billion larger than previously expected in fiscal year 2012, due almost entirely to the cost of a payroll tax cut, the Congressional Budget Office projected Tuesday in its March baseline update.
“The 10-year deficit accumulated by 2022 will fall by $186 billion, according to the CBO.
“The deeper fiscal hole could hurt the GOP’s ability to brag about slashing deficits during election season. But Democrats are unlikely to gain advantage either because they fought against Republican efforts to identify new spending cuts that would offset the cost of the payroll tax cut.”
On yesterday’s AgriTalk radio program with Mike Adams, the topic of crop insurance was a featured part of a discussion with David Graves, the Manager and Secretary of the American Association of Crop Insurers.
To listen to a portion of this conversation with Mike Adams and David Graves, just click here (MP3- 7:57).
During yesterday’s discussion, Dr. Graves explained that, “We now have arrived at a point where a lot of people are pleased with the program, but it doesn’t mean that is the end of the road. There are still opportunities to have the program continue to grow and expand.
“We are aware, specialty crops is an example, have a lot of questions about how it can be extended to them in a more effective way. Crops such as peanuts and rice continue to look at it. I think it is one of those situations where at this juncture, we believe the old phrase, ‘Do no harm,’ should be the order of the day.”
Dr. Graves added that, “The job is not finished, we have come a long way; the program has paid out over $10 billion in indemnities this year without Congress having to fight through ad hoc disaster assistance battles. The moneys were made available to farmers in a very, very short period of time- often as little time as two or three weeks.”
AgriTalk host Mike Adams noted that the executive branch budget proposal for the next fiscal year contained reductions to the crop insurance program. Dr. Graves pointed out that, “Everything that is included in this administration’s budget proposal this time around is of great concern. But, as we all know, these proposals are not new; they have been advanced by this administration in previous years, and frankly, Mike, many of these ideas have been advanced by other administrations in years gone by.
“It is almost as if, invoking an old term we used back in my early days of computer programing, as though the administration is stuck in a ‘do loop.’ And for those who tried to write programing they will understand what that means- you get on a path and you just cannot get off. They are stuck with this general idea that there needs to be something done about the federal budget and that agriculture has got to contribute every time around, and they can’t seem to shed themselves of that simplistic idea.”
The AgriTalk conversation also turned to issues regarding crop insurance premiums and participation, (Related audio, (MP3- 3:25)), as well as to a look at changes in the program for this year (Related audio, (MP3- 0:58)).
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Posted by Keith Good • April, 9, 2012 • 3:01 am 