November 10, 2011
As we head into the federal holiday for Veterans Day, not much solid information is known about the big three legislative processes with major import for food and agriculture. This much we know for sure — next week will be critical moment for all three. Here is a quick rundown.
Agricultural Appropriations — As we reported last week, the agricultural appropriations bill for FY 2012 is in “conference” between the House and Senate. With the House off this week for another one of their frequent recesses, the conferencing to settle differences between the two bills has been left to congressional staff, who are attempting to finish the draft bill by this evening so that the House and Senate member conferees can sign off on it early next week.
The “minibus” package of three appropriations bill that agriculture is part of will also very likely be carrying a critical provision to extend the current “continuing resolution” (CR) that is keeping the government funded while Congress tries to finish up the appropriations bills for the fiscal year that already started on October 1. The current CR expires Friday, November 18, so passing the minibus with the extension of the CR and having it signed by President by Friday night is a must. Hence, one way or the other, the agricultural funding bill should be law by the end of next week.
We have huge issues at stake in the appropriations bill. Key among them are whether the House position will prevail to stop USDA from doing its job of issuing rules to improve marketplace fairness for livestock producers, to cut nearly all funding for the 2012 Conservation Stewardship Program enrollment, and to slash funding for Sustainable Agriculture Research and Education, Value-Added Producer Grants, and Rural Micro-entrepreneur Assistance, or whether the reverse Senate position on each of these issues will carry the day.
Farm Bill — Nearly another week has gone by since our last farm bill update, and while there has been much debate in the interim, mostly around the size and scope of commodity production subsidies, nothing in the overall architecture of the spending cuts has changed to the best of our knowledge. The bill, which the leaders of the House and Senate Agriculture Committees had promised to deliver to the Joint Select Committee on Deficit Reduction (better know as the Super Committee) on November 1, is now nine days late and counting.
This week’s major drama centered around spokesperson for a Democratic Senator from a wheat state calling the commodity title package currently on the table as a result of negotiations between Senate Chair Debbie Stabenow (D-MI) and House Chair Frank Lucas (R-OK) a “boondoggle for corn growers” and “dead on arrival” while at the same time arguing for more funding for subsidies and better regional balance. There have also been criticisms of a special deal for cotton that removes cotton growers from payment limits, income eligibility tests, and conservation requirements. Payment limit issues related to the proposed new dairy program are also a bone of contention. The lack of unanimity on the commodity title has led in turn to further negotiations, but as of this writing, no new breakthroughs, at least none that have been made public.
Super Committee –– The super quick farm bill process we have experienced for the past two months is premised on aiming for its inclusion in the deficit reduction bill that the Joint Select Committee on Deficit Reduction (or Super Committee for short) is to report to the full House and Senate by Thanksgiving. This week there has been another exchange of proposals from the Democrats and from the Republicans on the Super Committee, with both plans rejected almost instantaneously by the other side.
The Democrats reduced the overall size of the proposed package from $3 trillion to $2.3 trillion in part to scale back the tax reform and tax revenue increase portion of their plan to $1 trillion in an attempt to make it more palatable to the other side.
Earlier in the week, the Republicans on the Committee offered a $1.2 trillion package, with $600 billion in tax reform, tax revenue increases, increased government fees, and proceeds from the sale of public property.
Both sides contemplate cuts to mandatory programs like Medicaid, Medicare and the farm bill as well as additional cuts to discretionary spending, but they are far apart on the details. The single biggest difference, however, remains in the tax and revenue area.
Next week would appear to be a make or break week for the success or failure of the Super Committee process, unless the statutory deadline of November 23 to report a deficit reduction bill should get changed in the interim.
We attempted to explain the various scenarios in our Super Committee report last week. In a nutshell, should the farm bill deal fall apart, but the Super Committee succeed in producing a bill, the cuts to the farm bill will presumably be determined either by the Super Committee or more likely by the top House and Senate leaders. Should the farm bill deal come together and be reported to the Super Committee, but a Super Committee deal then fall apart, the farm bill will presumably then be punted back into 2012, the year in which it was intended to be written in the first place, though it is unclear under what budget rules it would be operating under at that point.
So, there it is, the quick summary of the three legislative processes. In sum, all in all another fun week in Washington!