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New House GOP Debt Ceiling Plan Could Affect Farm Bill

January 22, 2013

The House of Representatives will vote on Wednesday on a new plan, cobbled together last week, to raise the debt ceiling for several months without demanding any matching spending cuts.  The sudden about face on the debt ceiling issue was reached during a House GOP caucus retreat in Williamsburg, VA last week.

Instead of dealing with increasing the debt ceiling for at least several years in February — at the same time Congress will be deciding whether or not to forestall the automatic budget cuts known as “sequestration” — the new GOP plan would suspend the debt ceiling until mid-May.  The new plan would also insist that both the House and Senate pass budget resolutions for Fiscal Year 2014 by the statutory deadline of April 15 or, should they fail, then the members of the body that fails would not get their paychecks until the end of the session.  The “no pay” stipulation was added as a blunt attempt to get the Senate to produce a budget resolution this year.

If the proposed House debt ceiling measure is successful it will almost certainly have to pass with primarily or only Republican votes.  If it does pass, it is uncertain how the Senate would deal with it or whether the President would ever agree to it.  Mere short term extensions of the debt ceiling have had little or no Democratic support in the past.  However, a White House spokesperson said on Tuesday the President would not oppose the move.

What is the Goal?

The House GOP strategy appears to be an attempt to provide more time for a national budget debate.  Rather than reaching some type of grand bargain before the end of February, the new plan would provide a three and a half month window for the debate.  During that extended period of time the proponents presume there would be a greater chance to line up public support behind a House GOP budget resolution to be drafted under the leadership of Budget Chair Paul Ryan (R-WI).

The new strategy is also an attempt to disaggregate several budget-related decision triggers.  Before the Williamsburg retreat, it was assumed that a deal to de-trigger the automatic sequestration budget cuts and to raise the debt limit would be part of a package that might also include an agreement to fund the government for the rest of the current year.

Of course, that end of February mega-package could still happen if the new House GOP plan stalls out.  If the new plan succeeds, however, there would be a February debate and decision over sequestration, a March debate and decision over the second half of Fiscal Year 2013 funding, an April and May debate and decision over the Fiscal Year 2014 budget resolution, tied to another need to raise the debt limit.

Whether House GOP leadership would then move to quickly dispense with de-triggering sequestration and with a new continuing resolution to keep the government open and current programs running without much ado, or whether each step in the process would become a knockdown, drag out fight over spending cuts has as yet not been directly addressed by the leaders.  The going assumption, however, is each separate action would be turned into a mini-cliff standoff of its own, continuing the process of governing by manufactured crisis after manufactured crisis.

Budget Reconciliation?  Path to a Farm Bill?

One hope for the proposed budget-debt ceiling showdown in May openly spoken about by House GOP leaders is for the adoption of a budget resolution that would include a fast-track spending cut process.  That fast track process is known in Hill-speak as “budget reconciliation.”  Under reconciliation, authorizing committees with jurisdiction over one or more pots of mandatory federal spending are given a deficit reduction target and a date, and are told to approve legislation to cut spending by the requisite amount by date certain.  The rules for budget reconciliation generally prevent policy measures from being attached to the bill that do not increase or decrease spending and generally are subject to fewer amendments when they reach the floor.

If the House and Senate were able to agree on a budget resolution, a very big if, and if the resolution called for budget reconciliation, that set of circumstances might be among the very best for getting a five-year farm bill authorization completed in 2013 after failing to do so in 2012.  Under that scenario, both the House and Senate Agriculture Committees would be working on the same level of savings, as opposed to the two different targets ($35 billion and $23 billion, respectively) in 2012.  They would also have the same target date to submit their product to the Budget Committees, and their bills would come to the floor with a much greater degree of protection, and would likely face far fewer floor amendments and votes.  In order to protect the non-spending parts of the farm bill from points of order, the legislation might be compartmentalized into its spending sections and non-spending sections, a process that has occasionally been used in the past.

With the parties at such odds over the basic direction needed to achieve a level of deficit reduction while not jeopardizing the still slow economic recovery, however, the adoption of a joint budget resolution seems difficult to imagine.  So while budget reconciliation might be the easiest path to a new farm bill, it does not appear, at this early date at least, to be the most likely.  In any event, if the new timetable for dealing with the budget and the debt ceiling in May is adopted in the coming weeks, it would appear to put Committee markup of a new farm bill off until late May or June at the earliest.

Sequestration, Including Major Farm Bill Cuts, Still Looms

While action on raising the debt ceiling gets worked out in the coming weeks, remember that the automatic budget cuts still loom on March 1.  If Congress cannot agree on de-triggering the cuts, either by getting rid of sequestration altogether or by kicking the can down the road again, then $85 billion in budget cuts will kick in March 1, with Pentagon programs taking about $43 billion of the total in the form of an over seven percent cut to Fiscal Year 2013 appropriations (and unspent prior year appropriations).  Domestic discretionary appropriations would get hit for about $26 billion in cuts (just over a five percent cut), while mandatory programs would take about $16 billion in cuts, including about $7 billion from farm bill commodity and conservation programs.  The farm bill cuts, if they were to happen, would then form the basis of a new, lower baseline for the Agriculture Committees to work with when they get around to working on a 2013 version of a new five-year farm bill.

Recognizing that either sequestration could possibly still happen or that more likely that a deal could be struck to make a down payment on spending reductions in place of sequestration, a deal that could include a big cut to farm bill commodity direct payments, House Agriculture Chair Frank Lucas (R-OK) has been pressuring USDA to lock in direct payments for the 2013 crop year (Fiscal Year 2014 expenditures) right away, to at least get that initial year off the table for the next round of budget cutting.  Secretary Vilsack today obliged with the announcement of a sign-up for farmers starting February 19, just about a week prior to the likely legislation to prevent sequestration.  Once contracts are signed, they are generally considered safe from budget cutting, even though the payments do not get made until the following fiscal year.  Whether this last minute move will forestall Congress’ options or not remains to be seen, though that clearly appears to be the intent of Chairman Lucas and Secretary Vilsack.

Senate Begins Repeat Performance

Finishing out the farm bill news from today, we conclude this post by noting that Senate Majority Leader Harry Reid (D-NV) today introduced the Senate version of the ill-fated 2012 Farm Bill as one of the handful a key message bills he placed into the hopper, saying it is his intent that the Senate will again adopt a long-term farm bill this year, as it did last year.  The “message” bill has a prestigious number – Senate Bill 10 or S. 10 for short.

Senate Agriculture Committee Chair Debbie Stabenow (D-MI) commented, saying in part “I applaud Sen. Reid’s leadership and commitment to getting a five-year farm bill done…”  She also noted that she will convene a Committee mark up “as soon as possible” to produce an updated version of a farm bill to substitute for Reid’s “placeholder” bill.

Still unknown, as it is likely to remain for quite some time, is whether a new Senate farm bill or a new House Agriculture Committee farm bill, whenever it may be approved later this year, will get any traction with House GOP leadership, having failed to do so for the last six months of 2012.  We will discuss that issue next week when we begin our new “path to the farm bill” blog series for 2013.





Categories: Budget and Appropriations, Farm Bill

One response to “New House GOP Debt Ceiling Plan Could Affect Farm Bill”

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