December 5, 2012
Last week we tried to briefly summarize the options remaining for Congress on the farm bill. Since then, there have been some new signs of progress on getting a full five-year bill finished this month, though also signs of continuing confusion and uncertainty. Last week we rated that option as possible, but did not give it great odds, with a modified short term farm bill extension as the option with perhaps the higher odds.
However, the agriculture “gang of four” — Senate Agriculture Chair and Ranking Member Debbie Stabenow (D-MI) and Pat Roberts (R-KS) and House Agriculture Chair and Ranking Member Frank Lucas (R-OK) and Collin Peterson(D-MN) — have been meeting this week and, according to news reports, are said to be making progress and to be focused particularly on finding a compromise between the Senate-passed and House Committee-passed commodity titles.
Meanwhile, the two primary negotiators on the bigger matter of the so-called fiscal cliff issues – the White House and House Speaker John Boehner (R-OH) – have made initial offers on potential funding cut and tax increase targets, but to date there have been no counteroffers and negotiations for the moment at least seem to be at a standstill. A new farm bill or short term farm bill extension would most likely hitch a ride on the bigger package – unless of course there isn’t one.
In explaining the President’s initial offer, Treasury Secretary Tim Geithner said over the weekend that cuts in farm subsidies — similar to the President’s proposal from last February for $30 billion in cuts over 10 years from commodity and crop insurance subsidies — were an example of where they would propose cutting mandatory funding. That $30 billion number for cuts to those two farm subsidy programs almost exactly match the ones proposed in the House-adopted budget, championed by Representative or former Vice Presidential candidate Paul Ryan (R-WI).
Yet, both before and after Geithner’s weekend appearance, Agriculture Secretary Tom Vilsack was speaking up publicly in favor of a deal that would adopt the Senate and House farm bill’s vision of saving only $15 billion (net) from these two sources. It is not completely clear which view is held by the President himself, though we assume that Secretary Vilsack is speaking on behalf of the President in discussions he is having with the gang of four.
Meanwhile, there has been no signal at all from the House Speaker or Majority Leader that a full five-year farm bill deal is on the docket. That is not to say it could not be, but only to say that to date they exhibit no enthusiasm at all for heading in that direction, especially since it would mean bypassing House floor action on the new farm bill, denying the “people’s house” a chance to work its will.
Instead, they strongly hint that an extension of the old farm bill, with direction to the Agriculture Committees to save a given amount of money and report a new bill that achieves that size cut by a date certain in 2013, is the more likely path forward. In that type of extension context, we have previously noted what the key modifications – all of which start with the letter “D” — are that will be necessary for an acceptable outcome.
Without some type of clear signal from the Speaker, or from the President, or better yet both, it may prove difficult for the gang of four to reach a deal that could fly. On the other hand, the current attitude of House GOP leaders could perhaps turn around if a comprehensive agreement is reached among the Agriculture Committee leaders. It’s a bit of a chicken and egg situation at the moment.
If a deal was reached on a new five-year farm bill, as opposed to a farm bill extension, what would a good deal look like? A new farm bill worth supporting as part of a final deal in 2012 must:
We do not believe these Senate-passed reforms go nearly far enough in the reform direction, but any final bill lacking even these provisions would, in our view, be a very bad deal.
While we are grateful the two bills renewed funding for these important farm bill programs, we believe most of the funding levels, even at the higher of the two bills, are too low and should be enhanced in the final package.
With just a dozen legislative days left, the overall situation for the farm bill remains clear as mud. The pendulum so far this week has moved a bit in the direction of actually finalizing a new five-year bill, but major roadblocks remain. As time begins to run out, it is paramount that negotiations proceed on two tracks, one track for a five-year bill and one track for a modified short term extension. Reaching the end of the lame duck session with no action is unacceptable.
Categories: Farm Bill