July 31, 2015
Members of Congress are heading out of town this week and next for their month-long August recess, and have left many loose ends, with more to follow when they return after Labor Day. The House began their recess mid-week, while the Senate may continue their work into early next week before leaving for recess.
There are several significant issues that have lacked decisive action in the past few months. For instance, as they prepare to leave town, a long-overdue long-term bill to fund infrastructure repairs and updates on bridges, highways, and transit is about to be delayed further with the passage of a 3-month extension measure to prevent its expiration later this month. Congress will ultimately have to decide on a long-term transportation bill or face a never-ending series of short-term patches.
Only time will tell if the House and Senate will be able to make a set of critical decisions and deals in time to pop champagne on New Year’s Eve rather than leading the country into another patchwork of extensions and delays. And while the 114th Congress is not leaving the country in as sticky of a situation as the 113th Congress did in August 2013 preceding the government shutdown, uncertainties abound.
While there are numerous food and agriculture issues on Congress’ plate, including biofuel tax credits, mandatory livestock price reporting, country of origin labeling for livestock and poultry, among others, we are focused primarily on the annual appropriations bill and the every five year child nutrition bill, as summarized below.
Let’s start with appropriations, that annual and most basic of congressional functions. The twelve House and Senate appropriations subcommittees developed their individual appropriations legislation for each issue area (agriculture, education, defense, environment, etc.) over the past few months before bringing that legislation before the full Appropriations Committees. On July 23, the Senate Committee on Appropriations cleared its final appropriations measure, marking full committee approval of all 12 appropriations bills in both the House and Senate for the first time since 2009. Under normal order, the next step would be consideration of each of the 12 bills on the floor of the House and Senate in time to then conference the bills to work out differences and pass final bills by the end of the fiscal year on September 30.
As has become customary of late, however, this will not happen. Instead, Congress will pass a short-term Continuing Resolution (CR) by September 30 keeping the government open but running with an extension of current year funding levels. The short-term CR is likely to be for approximately three months, signaling that any final action on new spending bills will not occur until around the time of the holidays in December.
Why the delay? The political and vote count situation demands on a ‘grand bargain’ on final spending levels between both houses of Congress and the White House. While negotiations over a grand bargain have been talked about for months and months now, there is no sign of any real discussions having started. Once the short-term CR is in place, however, the assumption is that things will finally get serious. One can only hope.
If there is a grand bargain, there will likely be a year-end “omnibus” appropriations bill that stitches all 12 appropriations bills together in a big package. If there is not, a full year CR, putting government programs on auto-pilot for all of fiscal year 2016 is the most likely alternative.
The to-be-hoped-for grand bargain will get very, very complicated, potentially including a new highway bill, extensions of special tax breaks, extensions of other laws that expire this year, and last but certainly not least, raising the national debt ceiling. But for appropriations purposes, the basic contour of the bargain is clear – finding an agreement to increase both defense and domestic social spending by $30-40 billion above the spending caps established in 2011, bringing spending levels in real dollars back closer to where they were a decade ago.
To date, the GOP controlled congressional budget process has agreed on a $38 billion increase for defense and a $0 increase for domestic social spending (including food and agriculture). The appropriations bills cleared by committee therefore abide by those top line numbers, even though Democrats and the White House have vowed to block bills that do not increase domestic spending alongside defense spending.
While the nitty gritty details of allocating funding will take effort, the top line bargain to be struck is pretty simple and straightforward. The task, however, is made far more complicated by the trend, especially in the House, to add more and more policy “riders” to spending bills. Legislating policy changes on spending bills is technically a no-no, but is increasingly common. In 2014, the number of policy riders passed by the House reached an all-time high. This year, the House bill for food and agriculture includes controversial riders relating to e-cigarettes, dietary guidelines, commodity subsidy payment limit loopholes, soil and wetland conservation, and research that involves human embryos, among others. Both the House and Senate bills include riders to restrict new nutrition standards for school meals as well as new menu labeling requirements. And relative to riders in other bills, especially those related to environmental regulation, the agriculture bill is relatively “clean”, which is saying a lot.
If there is to be a final appropriations bill by the end of the fiscal year, it will require significant negotiation not only within Congress but also between Congress and the White House, over which Obama Administration initiatives may or may not be blocked through this backdoor, policy rider method. Questions remain about the funding levels that will be decided upon.
Child Nutrition Act Reauthorization
Congress revisits child nutrition program legislation approximately every five years in a single omnibus bill known as the Child Nutrition and WIC Reauthorization Act, or Child Nutrition Act Reauthorization (CNR) for short. The current CNR is set to expire on September 30, and both the Senate and the House have yet to markup their respective pieces of legislation. The Senate Agriculture Committee now has markup date of September 17, though there is no word as yet from the House Education and Workforce Committee on its markup date yet. It is highly likely that CNR will require a short term extension as well, which will most likely also last until mid- to late-December.
The 2010 CNR, titled “The Healthy, Hunger Free Kids Act“, included the most extensive changes to child nutrition programs since the 1970s, including enhanced nutrition standards that have come under fierce attack over the last couple of years. The Food and Agriculture program at the Union of Concerned Scientists recently published a five-part blog series debunking some of the arguments against the new standards.
The 2010 bill also included first-time mandatory funding of $5 million annually for the Farm to School Grant program, a victory won by a coalition led by the National Sustainable Agriculture Coalition with the Community Food Security Coalition, National Farm to School Network, School Food FOCUS, and the Wallace Center at Winrock International.
As part of the upcoming CNR, Congress needs to build on the success of farm to school by strengthening and expanding the program’s scope and by providing additional mandatory funding. NSAC and the National Farm to School Network (NFSN) have diligently been working to advance farm to school priorities in the 2015 reauthorization of the Child Nutrition Act, with the shared goal of supporting stronger communities, healthier children and resilient farms.
While it is a bit concerning to have witnessed so little legislative action on CNR to date, necessitating a short term extension, putting child nutrition and school meals into the mix of a year-end mega-negotiations could actually improve its chances for passage in this calendar year. What would be unacceptable would be a full year extension rather than a short-term one, as that would signal little chance of having a new reauthorization until 2017 at the earliest, given the difficulty of passing major legislation in a presidential election year.
Back to the Debt Ceiling
The 2013 debt ceiling and government shutdown standoff ultimately led to a budget deal. While this year the Treasury Department hit the debt ceiling back in March, it has since used “extraordinary measures” to postpone the day of reckoning. Reckoning day has been further pushed off by higher than expected tax revenues coming in. Current projects, however, now place the deadline toward the end of the calendar year. Whether the prospect of putting the country in default on its debts once again drives a budget deal remains to be seen, but the betting is it will. That said, if the negotiating does not commence soon, it could well be a nerve-wracking December.