November 5, 2011
Farm and food advocates have obviously been keenly focused on the soon-to-be-revealed farm bill being stitched together by the Chairs and Ranking Members of the House and Senate Agriculture Committees. The theory has been that they will develop and send to the Joint Select Committee on Deficit Reduction (more popularly known as the Super Committee) a farm bill — that would otherwise have been written through more normal legislative processes next year — in hopes the Super Committee will roll it into the government-wide deficit reduction package for an up or down vote, with no amendments allowed, in the House and Senate in December.
The farm bill proposal is likely to be sent to the Super Committee early next week, and is likely to include a net savings of $23 billion over the next ten years. If the Super Committee were to adopt the farm bill given to it, and if they succeed in their mission of reporting a bill to reduce the deficit by at least $1.2 trillion over ten years, and if that reported bill were to pass the House and Senate in December, then the new farm bill would have gone from start to finish without a single mark-up, committee amendment process, floor amendment process, or House-Senate conference negotiating session.
We have reported on that farm bill process in some detail, but what about the Super Committee itself? How much progress have those twelve members of Congress – six from each party, six from each house of Congress – made in developing a package with $1.2 trillion or more in budget cuts and revenue increases? Like the Agriculture Committee leadership farm bill development process, the Super Committee process has also been relatively secretive and behind closed doors, so the most basic answer to that question is we simply do not know.
Two Initial Plans Rejected
There are many hints, however. A plan from the Democrats on the Super Committee, the general nature of which was revealed on October 18, was the first real public information. That plan, immediately rejected by the Republicans on the special committee, would cut the deficit by $3 trillion, with half from spending cuts and half from revenue increases. The next day, the Republicans responded with a smaller proposal, weighing in at $1.5 trillion, all from spending cuts, and a $2.2 trillion plan that also included increased fees of various kinds and sales of government assets as well as presumed additional deficit reduction as a result of economic growth from “tax reform.”
Hearing on Automatic Cuts
The same day, October 19, the Super Committee held a hearing to explore the impact on discretionary (appropriated) spending with respect to deficit reduction efforts. Discretionary spending has already been cut by $1 trillion over the next decade as a result of this summer’s Budget Control Act. With non-defense discretionary spending taking up just about 20 percent of the total federal budget, this is the one area of spending that has already taken a very substantial hit.
At the hearing, the Congressional Budget Office explained what would happen if the Super Committee fails to come up with a plan that can pass both House and Senate and be signed into law. Automatic cuts would then kick in, starting in October 2012. If the automatic cuts go into effect, CBO estimates that over the next ten years $794 million would be cut from non-defense spending (discretionary and mandatory) and $882 million would be cut from defense spending (all discretionary), relative to current levels adjusted for inflation.
With both party’s initial offerings rejected by the other side, and with the looming prospect of automatic cuts across the board, there are increasing signs that the four congressional leaders – Senators Harry Reid and Mitch McConnell and Representatives John Boehner and Nancy Pelosi — are getting more involved in forging a deal. Despite various meetings among some of the leaders and between the leaders and the Super Committee chairs (Sen. Patty Murray, D-WA and Rep. Jeb Hensarling, R-TX) there is, by all accounts, still very little agreement.
Smaller Deficit Reduction Package Could Equal Bigger Farm Bill Cuts
With a statutory deadline to report a bill by November 23, time is short for a breakthrough to occur. As time passes, there is increasing talk of the possibility of the Super Committee coming up with a package that is less than the $1.2 trillion cut they would need to make to avoid automatic cuts next year. That prospect could be a great disadvantage to farm bill spending. If, for instance, the Super Committee proposed $600 billion in deficit reduction, including $23 billion or more from farm bill spending, then the automatic cuts for an additional $600 billion would be triggered, which would include nearly $8 billion more in farm bill cuts, for a combined total roughly equal to what the Obama Administration suggested for farm bill cuts at the outset of this process.
“Go Big” Still Out There, but Unlikely
Another Super Committee hearing took place November 1, with the four leaders of two previous deficit reduction commissions urging the panel to “go big” with its cuts and revenue increases, reaching a total of $4 trillion total, maintaining that deficit reduction of that magnitude is necessary to restore financial stability. Despite their pleas, there is little evidence that the Super Committee will be able to agree on more than the minimum $1.2 trillion requirement, if even that.
All of the “go big” options entail substantial revenue increases, something the GOP side of the talks flatly refuses to budge on. Republican members of the panel have been willing to consider revenue-neutral tax reform and then assume that tax reform will promote growth and that growth will reduce the deficit. But to date, they have not put any revenues on the table other than some increased government fees and the sale of government assets.
Another Turn for the Worse
Two days after the “go big” hearing, a letter signed by 33 GOP Senators appeared to put a nail in the coffin of any go big plan and perhaps of any plan at all. The letter, circulated by Sen. Jim DeMint (R-SC), directly criticizes even the tiny revenue increase in the Super Committee GOP $2.2 trillion offering. The letter calls for major cuts in entitlement spending such as Medicare and Medicaid, and no increase at all in revenues. Surprisingly, the letter was signed by the three GOP Senators who earlier in the year formed half of the so-called bipartisan Gang of Six that had proposed $4 trillion in deficit reduction including substantial revenue increases. The shift of those three away from a bipartisan, balanced approach is taken by some observers to mean a political preference for no deal between now and election day next year is taking hold.
Meanwhile, White House and Democratic calls for some jobs stimulus spending, either as part of a budget deal or as separate legislation, appears to be getting nowhere, despite continued gloomy unemployment news.
So What about the Farm Bill?
The farm bill that is expected to be sent from the four agriculture committee leaders to the Super Committee will likely be the only such legislation sent from any authorizing committee to the deficit reduction panel. It is unclear what will happen to it when and if it arrives. At least one member of the panel maintains the Super Committee will not take it up at all. Others hint that they will take it up, but amend it. Still, the primary mode of thinking is that it will be absorbed in it’s entirely, without changes, into the Super Committee package. But it all depends on who you talk to, which answer you get.
The agriculture committee leaders previously told the Super Committee they would send the farm bill on November 1. That date has come and gone, however, and there is still no final deal on the farm bill, though one seems imminent.
The Super Committee itself will be very rushed to finish its work and get a draft bill to the Congressional Budget Office with enough time for them to “score” the bill to determine just how much deficit reduction is included. Not surprisingly, there was talk this week of the special panel possibly requesting and receiving an extension of time beyond the current November 23 deadline. Though the deadline is set by law, it would not be unexpected at this point to see the pre-Thanksgiving date slip until after Thanksgiving or on into December, the month when the House and Senate are to vote, up or down with no amendments, on whatever the Super Committee reports.
On to the Super Committee
Assuming a farm bill is indeed sent to the Super Committee this coming week, attention will obviously turn back to those 12 members as they decide what to do with the farm bill package and whether and how to amend it. The members of the special panel are:
Senators: Patty Murray (D-WA), Max Baucus (D-MT), John Kerry (D-MA), Jon Kyl (R-AZ), Rob Portman (R-OH), and Pat Toomey (R-PA).
Representatives: Jeb Hensarling (R-TX-5), Fred Upton (R-MI-6), Dave Camp (R-MI-4), Xavier Becerra (D-CA-31), Jim Clyburn (D-SC-6), and Chris Van Hollen (D-MD-8).
If the Super Committee includes a farm bill (amended or not) in its package, and in fact succeeds in coming up with a package that can get a majority vote, then the House and Senate will be voting on the farm bill as part of a mega-package of spending cuts and revenue increases, not subject to amendment, later in December.
If they fail, then the deficit reduction efforts shift forward into 2012, as Congress attempts to find other ways, perhaps, of preventing the automatic cuts to kick in next October 1. In that case, it is not known what would become of the farm bill. It could proceed under a more normal legislative process through both the House and Senate committees early next year, or the current farm bill could be extended for a year, with the committees coming back to work on a new farm bill in 2013.