NSAC's Blog

Clock Ticking on Farm Bill and Budget Deals

December 6, 2013

Next week is the last week the House and Senate will both be in session at the same time for the rest of the year.  That means it’s now or never on announcing a farm bill deal and a fiscal year 2014 government budget deal.  We currently expect both announcements early next week, assuming the basic frameworks have been agreed to by then.  We also currently expect that there will be no conclusive action on such frameworks next week, but rather that final details will be put together in time for votes by mid-January.

Farm Bill

Despite the Senate being on recess this week, the Senate Agriculture Committee Chair and Ranking Member came back to DC for meetings with their House counterparts.  According to press accounts, they have made substantial progress on several fronts, including commodity programs, food stamps, and conservation compliance.  Since the meetings of the so-called Gang of Four (the chairs and ranking members of the House and Senate Agriculture Committees) are private and only certain information trickles out, it is hard to know for certain where things stand.  But based on press stories, some of the highlights of the emerging framework include:

  • Total SNAP or food stamp cuts of $10 billion, perhaps slightly more, and with perhaps a small portion of savings re-invested in job training.
  • The commodity program for grains and oilseeds based on a one-time producer choice between shallow loss revenue payments and target price deficiency payments, with both options based on historic base acres (not current planted acres) and both subject to further tweaking of the percentages of payment acres or payment thresholds still to come if necessary to meet budget targets.
  • Some agreed-upon final framework on a new dairy program, though details have not been made known.
  • Some form of soil erosion and wetland protection conservation compliance requirements re-attached to crop insurance premium subsidies, though specific details are so far hard to come by.

By most accounts, some high profile issues are still up for grabs, including the historic and identical payment limitation reform measures in both bills (see NSAC press statement), sodsaver protections for grasslands, preservation of livestock competition and contract reform under the Packers and Stockyards Act, and the King amendment that would restrict the rights of state to regulate and promote their own food and agriculture sector.

The staff of the committees and the conferees have made substantial progress working through the lower profile issues in most all of the other many titles of the farm bill, but to our knowledge none of those titles is finished yet, and many have some major funding decisions and some important policy decisions still outstanding.  Those sessions and those decisions may accelerate if and when the Gang of Four officially announces an overall framework agreement.  For a look at some of what is at stake in these parts of the farm bill for beginning and minority farmers, rural job creation, conservation, organic farming, renewable energy, and local and regional food systems, see our What’s At Stake series.

While noises are still being made by some Members of Congress about finalizing the farm bill next week, in all likelihood the final details will not be settled until early January, at which point the full conference committee would actually meet.  It is possible that when the conferees meet they will simply be voting on a final product, though if there are still issues on which agreement has not been reached behind the scenes, it is also possible they will be voting on a few hot button issues at that time.

Assuming a majority of the conferees vote in favor of the final bill and sign the conference report, it would then proceed to the House and Senate floors for a final up or down vote.  This might happen as a vote on the farm bill by itself, or it might happen as a vote on other legislation that the farm bill is attached to.  That other legislation may most likely be the possible budget bill (see below) that will be required by January 15 in order to avoid a second government shutdown starting at midnight that day.

There is some debate over whether or not a short-term extension of the old farm bill will be needed next week to carry things over until mid-January.  From the perspective of programs that have been shut down since the last farm bill extension expired on October 1, a short-term extension is long overdue.  But from the perspective of the triggering of “permanent law” — the 1938 and 1949 farm bills – for the commodity programs, it is unclear whether an extension is actually needed.  While permanent law for the dairy program does trigger on January 1, it would take USDA months to put in place any actual implementation, so it’s not clear anything significant would happen during the first two weeks of January.  But expect more back and forth over that issue next week.

Budget Deal?

Just as the farm bill conference has many members, but only the Gang of Four has been meeting, the budget conference also has many members, but the meetings have been just a Gang of Two – House Chair Paul Ryan (R-WI) and Senate Chair Patty Murray (D-WA).   Though originally set-up to develop a final budget resolution for the current fiscal year (FY 2014), it now appears the negotiation is headed toward an actual piece of legislation.

The basic contours include an $80 billion reduction in the automatic budget cuts known as sequestration in FY 2014 and FY 2015, out of a total sequester of $220 billion.  The reduction in automatic cuts would be split 50-50 between the Pentagon and the rest of the government.

Offsetting savings would be designated, such that the overall level of deficit reduction would be left unchanged.  Those offsets could potentially include even bigger discretionary spending cuts to domestic programs that are not in the lucky category of those being saved from sequestration.  Since only a few issues in the annual agriculture and rural development spending bill are political hot buttons, this could potentially be bad news for agriculture, but as always the devil will be in the details.

Other offsets might include user fee increases and possible cutbacks to federal worker pensions, both hot button issues.  House Democrats meanwhile are insisting on an extension of unemployment benefits for 1.3 million unemployed workers whose benefits otherwise end December 28.  If successful in that push, that issue could be wrapped into the budget deal, or be deliberated separately.

Chairman Ryan indicated yesterday that an announcement on a package would be made on Tuesday next week.

Budget-Farm Bill Interaction?

As we have been saying for some time, if there is a farm bill agreement that can pass both the House and Senate easily, it may be handled as a separate item.  But it may also prove necessary, either to secure sufficient votes for the farm bill or to secure sufficient offsets for the budget deal, for the two to be married into a single bill and a single vote.  Observers this week seem to be leaning more toward the separate votes scenario, but time will tell.  It may still become a political necessity to marry the two as the mid-January deadline approaches.  Perhaps initial political reaction to any farm bill or budget deal frameworks announced next week will set the tone for the January showdowns.  Stay tuned!



Categories: Budget and Appropriations, Farm Bill

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