Congress Passes FY 2011 Budget, Cuts Billions from Agriculture
April 15th, 2011
On Thursday, April 14, Congress passed a final 6-month continuing resolution (CR) that will fund the government through the end of the fiscal year. The CR cuts $42 billion relative to FY 2010 levels for non-defense spending, but couples that with a $4 billion increase in defense spending, for a net decrease of approximately $38 billion. Of that $38 billion, $12 billion was already enacted via three preceding short-term continuing resolutions over the past five weeks, including a $2 billion cut enacted as late as April 8 in the form of a one-week CR.
When factoring in “off-budget” spending for the wars in Afghanistan and Iraq as well as counterinsurgency aid to Pakistan shifted to off-budget accounts in the new 6-month CR, the Congressional Budget Office concludes total appropriations for the year actually go up, not down.
The latest CR also includes an across-the-board cut of 0.2 percent to all non-defense discretionary accounts.
Read the House Appropriations Committee’s summary of the Agriculture, Rural Development, and FDA section of the bill and the Senate Appropriations Committee take on the measure, or see our blog post from earlier this week for a detailed description of the cuts.
Take a look at NSAC’s final FY 2011 appropriations chart on key programs of interest to the sustainable agriculture community.
Food and Agriculture Cuts
Overall, the CR cuts discretionary agriculture spending by $3 billion or 14 percent relative to FY 2010 levels. While steep, the cut is lower than the 22 percent cut proposed in the earlier House-passed CR.
The final bill reduces Farm Service Agency credit program funding by $433 million (including a 27 percent cut in direct farm ownership loans targeted to beginning farmers), Natural Resources Conservation Service funding by $118 million, rural low income housing funds by $175 million, Agricultural Research Service funding by $64 million, and National Institute for Food and Agriculture funding by $126 million relative to FY 2010. It also cuts the Women, Infants and Children (WIC) feeding program by $504 million, eliminating WIC reserves that guard against swings in the economy and food prices.
A number of discretionary programs, including the Conservation Loan Program and the National Sustainable Agriculture Information Service, also known as ATTRA, were eliminated completely. NSAC will work to try to resurrect these programs in the FY 2012 bill. The at least temporary demise of the Information Service is particularly disheartening as the budget axe fell on it due to a misinterpretation of the program being a local congressional “earmark” rather than a national, farm bill-authorized and USDA-requested program.
Other programs, such as the Organic Transitions research program, Regional Integrated Pest Management Centers, and Regional Rural Development Centers were trimmed back a bit, but left standing.
Mandatory Conservation Spending Cuts
As with H.R. 1, – an earlier CR passed by the House but rejected by the Senate – Farm Bill mandatory conservation programs would take a massive cut of more than $500 million in the final appropriations bill for the remainder of FY 2011. The bill proposes to cut funding for the Conservation Stewardship Program (CSP) by $39 million, the Wetlands Reserve Program (WRP) by 19 percent (nearly 48,000 acres), and the Environmental Quality Incentives Program (EQIP) by $350 million relative to the level provided in the 2008 Farm Bill. Fortunately, while H.R. 1 would have permanently rescinded 48,000 WRP acres, meaning that we would never get those acres back, the final CR proposes only a single year cut rather than a permanent reduction in the long-term acreage goal for the program.
In his floor statement on the passage of the bill, Senate Appropriations Committee Chairman Dan Inouye (D-HI) stated, “In achieving this rate of savings, this compromise measure sought out as many different ways to reduce spending as possible to allow us to preserve our critically important priorities. We were able to mitigate the damage by looking at areas where we could identify savings from mandatory spending and by rescinding lower priority funds.” Read the Chairman’s full statement.
As we move forward into the FY 2012 appropriations process, it is worth taking a moment to reflect on the Chairman’s deficit reduction strategy. We are still a full year away from taking up the 2012 Farm Bill, yet the House, Senate and Administration has already shown a willingness to take away mandatory farm bill funding for conservation before debate even begins. President Obama’s proposed FY 2012 budget calls for deep, permanent cuts of over $1 billion to mandatory spending for farm bill conservation programs.
This is all the more important next year, and here is why. Any changes in mandatory program spending that occur in the FY 2012 appropriations bill will reduce the farm bill baseline for 1o years, not only 1 year as did the FY 2011 bill. This is because actual spending in the final year of any farm bill cycle (in this case, 2012) is assumed by the Congressional Budget Office (CBO) to establish the new baseline for each program for farm bill purposes. Hence, according to CBO, the President’s proposed cuts to the conservation title in his FY 2012 request will have the result of reducing the farm bill baseline by nearly $5 billion.
Even with no cuts to mandatory spending, the baseline for the 2012 farm bill does not have any funding for Wetlands Reserve Program or Grasslands Reserve Program. To maintain them at status quo levels would involve finding an additional $1.5 billion in new baseline. The farm bill fiscal situation will obviously be very tight. Going billions of dollars in the hole by once again targeting mandatory programs or by accepting the President’s request to cut farm bill spending in order to have offsets for discretionary programs would make the situation far, far worse.
Long-term mandatory Farm Bill conservation funding has no business being part of a one-year appropriations bill. Any changes to mandatory programs should be left to the House and Senate Agriculture Committees and the Farm Bill debate.