Senate Democratic Budget Plan Includes Fix to Farm Bill Extension Fiasco

February 21, 2013

blog, farm bill, politics, public policy

Guest Blog by Ferd Hoefner, Policy Director at the National Sustainable Agriculture Coalition

Background – The Farm Bill Extension

The farm bill extension approved by Congress on New Year’s Day left many critical programs without any funding for 2013.  Thrown overboard in the final deal struck between Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden were programs for beginning and minority farmers, specialty crop growers, value-added producers, organic farmers, and farmers market and CSA farmers, as well as rural economic development and renewable energy programs.  Disaster assistance for livestock and fruit operations was also left on the cutting room floor.  Moreover, out-dated direct production subsidies were extended, despite both the House and Senate Agriculture Committee deciding in their 2012 bills to terminate direct payments.

The Reid Bill

The bill announced by Senate Majority Leader Harry Reid (D-NV), with the backing of Senate Budget Committee Chair Patty Murray (D-WA), Appropriations Committee Chair Barbara Mikulsi (D-MD), and Agriculture Committee Chair Debbie Stabenow (D-MI), proposes to correct the disastrous farm bill extension measure agreed to by the White House and Senate Minority Leader behind closed doors at the end of last year as part of the New Year fiscal cliff deal.

The farm bill component of the new “American Family Economic Protection Act” proposal is part of a larger package of spending cuts and revenue increases proposed as an alternative to the meat ax approach to deficit reduction known as sequestration.

The Reid proposal would end direct payments and restore the farm bill programs that were left out of the farm bill extension portion of the fiscal cliff deal.  Direct payments would be terminated beginning in 2014, for a total savings of $31 billion.  From that total, $3.5 billion would be re-invested into the programs left stranded by the farm bill extension, including disaster aid.  Thus, 2013 funding would be restored for all the farmers and ranchers left out of the original extension deal on New Year’s Day.

The net savings — $27.5 billion – would be credited in full as the savings required from the 5-year farm bill to be crafted later this year.  Hence, if the Reid bill were to become law, the Agriculture Committee could write the new farm bill without making any further net cuts.  While some particular conservation title or nutrition title policies or programs could be changed, changes which might save money, there would be no net cut.  Agriculture’s contribution to deficit reduction would be fully accounted for by the $27.5 billion net cut from direct payments.

The Reid bill would also postpone the automatic budget cuts known as sequestration until next January.  Without new action by Congress, sequestration goes into effect on March 1, cutting farm bill commodity and conservation programs by some $7 billion and reducing every USDA discretionary program and line item – from low-income rural rental assistance to meat inspection to WIC, and everything else — by five percent.  The hope of the bill writers is that Congress and the White House would have time, between now and January, to come up with the grand budget bargain, which has so far eluded them, and thus the meat ax budget cuts known as sequestration would be permanently shelved.

The non-farm bill part of the Reid bill includes $27.5 billion in cuts to the defense budget (for a total of $55 billion in spending cuts when added to the farm bill cuts) and $55 billion in revenue raisers from closing tax loopholes for the very wealthy.

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