December 7, 2015
Last week, Congress voted to reverse several basic reforms to the federal crop insurance program – reforms that both the House and Senate agreed to as part of a two-year budget deal signed into law by the President back in late October. That budget deal required the U.S. Department of Agriculture (USDA) to renegotiate its contract with the crop insurance industry by the end of 2016, allowed USDA to capture the savings from such renegotiations on behalf of taxpayers, and lowered the target rate of return for crop insurance companies from 14 percent to 8.9 percent.
Transportation Bill Reverses Crop Insurance Reforms
On December 4, Congress reversed the crop insurance reforms as part of a 1300-page transportation funding bill to fund highway and transit projects over the next five years. The bill also reauthorized the Export-Import Bank for four years. The $305 billion in new transportation spending is offset with the renewal of an 18.4-cents-per-gallon gas tax, in addition to roughly $70 billion in new revenues and spending cuts, some real and some smoke and mirrors.
The crop insurance reforms included in the October budget deal would have generated more than $3 billion in savings. Congress paid for the reversal of these reforms as part of a larger package of spending offsets in the transportation bill, more precisely as part of a $6.9 billion reduction in the amount of interest that the Federal Reserve pays to big banks.
During the Senate floor debate, Senators Jeff Flake (R-AZ) and Jeanne Shaheen (D-NH) raised a point of order in an attempt to block the Senate from reversing the crop insurance reforms. The Senators argued that the inclusion of the provision in the transportation bill violated budget rules. The point of order failed 75-22.
Will Congress Pass a Funding Bill for 2016?
Congress will now turn to passing appropriations legislation for fiscal year (FY) 2016. The current funding extension, which Congress passed in late September, expires on Friday, December 11. Congress is currently negotiating final funding levels and the very full slate of policy riders that may or may not be included in the bill. There are indications that Congress may pass a very short term–no more than one-week–funding extension in order to give itself a bit more time to finalize appropriations legislation before the holidays.
It is not year clear what form funding legislation will take. If House and Senate negotiators are able to agree on all outstanding issues, Congress will likely pass an omnibus package, which combines all 12 spending bills into a single package. If they are able to agree to most, but fail to reach agreement on one or more of the individual spending bills, Congress may pass what is known as a “CRomnibus,” which is a combination of new funding legislation and an extension of last year’s funding levels and riders (aka a “continuing resolution” or “CR”) for bills that Congress is unable to finalize.
If all else fails, Congress may pass a full-year continuing resolution, which would simply extend FY 2015 appropriations legislation through the end of FY 2016. In our view and the view of many in Congress, this would be the worst possible outcome, as it would deep six all of the work that appropriators have done to develop spending bills for each of the appropriations subcommittees this year.
You can read our previous posts, for more information on sustainable agriculture priorities for FY 2016 appropriations legislation.
Child Nutrition Reauthorization
As we reported last fall, Congress allowed the Healthy, Hunger Free Kids Act of 2010 (also know as the Child Nutrition Act) to expire at the end of September. Congress may take up the bill again next year. There is also a chance, however, that it may choose to reauthorize the Child Nutrition Act as part of FY 2016 appropriations legislation. That would be a very long shot, since there have been no committee or floor votes in either the House or the Senate, but it is nonetheless conceivable, even if unlikely. We have very little solid information at this point, but will report more in the coming days if there are any developments.
Regardless of how it happens, it is imperative that Congress reauthorize the Child Nutrition Act as soon as possible, and that the reauthorization include increased support for farm to school programming across the country, as proposed by Senators Pat Leahy (D-VT) and Thad Cochran (R-MS) and Representatives Jeff Fortenberry (R-NE) and Marcia Fudge (D-OH).
We will, of course, keep readers posted on all of these topics as Congress moves toward final action for 2015.