June 1, 2018
Last budget cycle, advocacy groups like the National Sustainable Agriculture Coalition (NSAC) helped to push a strong budget package through Congress, one which the President ultimately – if reluctantly – signed. Immediately after that budget deal was done and a fiscal year (FY) 2018 appropriations omnibus was delivered (with an extra $2 billion for agriculture appropriations), the Administration seemed to regret its decision. On May 8, 2018, just months after signing an FY 2018 budget deal that included an additional $300 billion for discretionary and non-defense programs, President Trump sent Congress a package of proposed rescissions of federal spending. Rescission proposals from a President are a rarely used budget tool (we have not seen one since the Clinton Administration) that are designed to claw back federal funding that has already been allocated, but not yet spent.
In total, the President has asked Congress to cut $15.4 billion from discretionary programs under the rescissions package. For farm and food programs, nearly $1 billion in cuts are on the table, with conservation and rural development programs as the prime targets.
Rescissions proposals from Congress are fairly common and are typically a routine part the appropriations process. Rescissions initiated by the President, however, are quite rare in recent history and must go through a somewhat complex process dictated by the Impoundment Control Act of 1974.
A Presidential rescission begins with the transition of a special message from the President to Congress that includes the President’s proposed budget cuts. This action triggers a powerful special procedure rule, which makes it easier for the package to come to a vote in Congress. There is a 45 day expedited process for consideration of the rescission package. Once rescission proceedings are triggered, funding for the programs and accounts included in the rescissions package is essentially frozen for the 45-day consideration period, regardless of where in the implementation process the administering agency is. For example, funding for a program on the list would be frozen even if the administering agency has already published a Request for Applications, received and ranked qualified applications, and is preparing to obligate funding.
Within the impoundment period, the House and Senate Appropriations Committees have 25 days to act to approve, disapprove, or amend the request. If they do not act, a member of Congress can seek to bring the package directly to the floor of the House or Senate for a vote. If no action is taken after the 45 days the President must release the funds.
The special rules triggered by a Presidential rescission request exempts them from needing to secure the 60-vote threshold for overcoming a filibuster in the Senate; only a 51 vote majority is needed to pass the measure.
Congress has until June 22 to consider the rescissions package under the expedited rules. So far, a version of the package has been introduced in both the House and Senate, but neither appropriations committee has taken action to amend, or vote on the package.
While exact timing is not yet clear, indications from Congress suggest that the rescission package could come before the House as soon as next week.
The rescissions package proposes to cut a total of $657 million in funding from conservation programs administered by USDA’s Natural Resources Conservation Service (NRCS). Farmers, ranchers, and landowners across the country depend on NRCS voluntary conservation programs to protect and enhance natural resources on their land. The rescissions package is particularly dangerous for voluntary conservation programs, as there are already threats in Congress to cut conservation program funding through the 2018 Farm Bill and the FY 2019 appropriations process. The House’s failed draft farm bill, for example, proposed to cut conservation funding by $800 million over 10 years.
The rescissions proposal would take back funding from three different conservation assistance areas: the Environmental Quality Incentives Program (EQIP), programs that were consolidated into what is now the Agricultural Conservation Easement Program (ACEP), and emergency watershed and flood protection programs. The impact of these proposed rescissions, if they were to be passed into law, would be devastating for American farmers and ranchers. For advocates of sustainable agricultural production, the proposed rescissions to EQIP and easement funds are of particular concern. Below we detail how these proposed cuts would hinder NRCS’s ability to deliver conservation assistance and what the outcomes would be for the producers who depend on these programs.
Environmental Quality Incentives Program
EQIP, which provides financial and technical assistance for farmers and ranchers to implement conservation activities on their land in production, is a major target in the President’s rescissions package. The EQIP cut in the proposal has two distinct parts – $144 million from un-obligated balances from FY 2014 through FY 2017, and another $12.9 from the Wildlife Habitat Incentives Program (WHIP), which was folded into EQIP in the 2014 Farm Bill.
Combined, these EQIP cuts amount to $156.9 million in funding that would have otherwise have been utilized for conservation support. In the case of the FY 2014-FY 2017 funding, rescissions would come from funds that were intended for future contracts, but have not yet been allocated to states. The WHIP funding is currently available for remaining contracts that were 15 years in length with several years still remaining. If these funds were rescinded, NRCS would need to pay out the existing WHIP contracts from current year EQIP funding, further reducing the amount available for new contracts.
NRCS estimates that about 50 producers would be affected by diverting those EQIP funds. Using that same calculation, approximately 560 producers would be unable to access funds from the FY 2014-FY 2017 funding that could otherwise go out to the states for contracts. In total, if the EQIP rescission proposals are passed into law, NRCS will be prevented from signing more than 600 EQIP contracts with farmers and ranchers around the country. This would be on top of the already significant backlog of eligible applications relative to available funding.
Agricultural Conservation Easement Program
The rescissions package proposes to cut $335.1 million in funding from three easement programs that were folded into the Agricultural Conservation Easement Program (ACEP) in the 2014 Farm Bill: the Farm and Ranch Lands Protection Program (FRPP), $146.6 million; Grassland Reserve Program (GRP), $33.2 million; and the Wetland Reserve Program (WRP), $155.3 million. The un-obligated funds from within these ACEP program areas are absolutely needed for restoration, monitoring, and payments for existing easements and for protecting the ongoing health of our shared natural resources.
Farmers and ranchers are already feeling the affects of the 45-day hold on ACEP funds – the rescissions request has frozen monitoring on 9,000 easements covering 1.7 million acres, which require $10 million from ACEP Technical Assistance (TA).
If these funds are ultimately rescinded, ACEP enrollments for the next fiscal year will be decimated. Rescinded funds that will otherwise be used to service FRPP, GRP, and WRP contracts will have to be replaced by current easement funds. As a result, approximately 490 ACEP easements will not be made if funding is diverted. If funds are not rescinded, NRCS estimates that it will be able to enter into approximately 550 new easements; if funds are rescinded, the agency will only be able to enroll 60.
Since the beginning of the current Administration, rural development programs have been in peril. Last year, USDA demoted its Rural Development Mission Area to an “office,” and programs that bolster rural entrepreneurship and economic activity have routinely been targeted. Despite its popularity and track record of success in bolstering rural businesses and communities, the rescissions package targets the Value-Added Producer Grant Program (VAPG) for nearly $15 million in cuts to previously appropriated funds.
The administration claims that rescinding these funds would have no real world impact since they were appropriated approximately a year ago and have not yet been obligated. In reality, however, USDA made a strategic decision in the spring of 2017 to delay opening the application period for VAPG until the late summer 2017 through early winter 2018 so that farmers and ranchers would not have to develop their business plans and proposals during peak growing season. The intention was to give applicants time to research and develop highly qualified proposals.
Once the January 2018 deadline for applying to VAPG had passed, USDA Rural Development began reviewing applications and scoring applications. When the recession package was introduced and froze funding, USDA was in the final stages of making decisions about which producers and projects would receive awards.
USDA received 379 eligible applications, which would have represented roughly $54 million in funding. Before the proposed rescission, they had planned to obligate $36 million in funds. If the rescission moves forward, they will only be able to obligate $21 million, meaning many qualified farmers and ranchers will be turned away.
The foolishness of the proposed VAPG rescission stands in stark contrast to the recently released (on the same day as the rescission proposal) Economic Research Service (ERS) report showing that VAPG has played a vital role in the creation, survival, and growth of rural businesses. The report analyzed VAPG project data to estimate the impacts of the program on employment growth and business survivability, and found that businesses that received VAPG support performed better overall on these measures. According to ERS, businesses that received VAPG funds were less likely to fail than similar businesses that did not: VAPG recipients were 89 percent less likely to fail two years after the grant and 71 percent less likely to fail four years after the grant when compared to similar non-recipients. Moreover, on average, VAPG recipients provide more jobs (five to six more employees) for their communities than similar non-recipient businesses.
When Congress returns from recess next week and resumes debate on rescissions, it is critical that members take into account the extreme impact these cuts would have on conservation support and rural development assistance. NSAC is committed to making sure that the voices of family farmers and ranchers who use these programs, or who could be helped by these programs in the future, are heard on Capitol Hill. This Administration has pledged to rebuild and revitalize rural America, and yet time and again its proposals show that real family farmers and ranchers are at the bottom of its priority list. We urge Congress to reject these shortsighted rescission proposals, and to commit to actions that will actually revitalize and rebuild rural America – protecting these vital programs is one great way to start.