NSAC's Blog
Is There a Mega Budget Deal Coming?
March 22, 2013
At the end of December, Congress extended the current farm bill, but without renewed funding for beginning, minority, organic, specialty crop, and local food farmers; renewable energy; economic development; and disaster assistance. They also punted automatic across-the-board budget cuts until March 1.
Then, at the end of January, Congress punted debate over the debt ceiling until mid-May. That move created what we have called the triple-headed budget monster — a debate over automatic budget cuts by March 1, a debate on funding the government for the rest of 2013 by March 27, and a debate on raising the debt ceiling by May 18.
One Head of the Triple-Headed Budget Monster Left
Two of the heads of the triple-headed monster have now come and gone. The automatic cuts known as sequestration went into effect on March 1, including an over 5 percent cut to almost all USDA discretionary programs and a nearly 6 percent cut to farm bill commodity and conservation programs. The continuing resolution to fund the government for the rest of this year — a bill that includes sequestration as well as an added funding rescission over and above the sequester cut — was approved this week and sent to the President for his signature.
Through these first two stages of the protracted budget debate there has been no real movement toward a “grand bargain” type of budget deal. That grand bargain would include raising the debt ceiling, and would define a path forward for Congress to proceed to spending bills, like the farm bill, and to tax measures. An agreement through a grand bargain on bills like the farm bill and on tax measures would facilitate the passage of those bills.
With the passage this week of the House budget resolution and the likely passage of the Senate budget resolution by late Friday or early Saturday, the stage is now set for one last attempt at reaching the elusive grand bargain. The temporary suspension of the debt ceiling runs out on May 18, though the Treasury Department is likely to be able to use extraordinary measures to keep the country from defaulting for at least a month or more after that date if Congress has not yet acted.
What Could a Grand Bargain Look Like?
The grand bargain, if there is one, could include a provision to fund in 2013 the programs left out of the farm bill extension. NSAC will continue to advocate for this approach. Whatever bill passes in May or June to deal with the debt ceiling is likely to be the last best chance to complete this leftover business from the farm bill extension.
The grand bargain could also include an agreed-upon number for the size of the ten-year budget cut that the new five-year farm bill would have to include.
On that farm bill cut, for instance, the House-passed budget resolution drafted by Paul Ryan (R-WI) would encourage the Agriculture Committee to write a new farm bill that would cut SNAP (food stamps) by $135 billion, commodity and crop insurance subsidies by $31 billion, and conservation programs by $18 billion. The pending Senate budget resolution drafted by Patty Murray (D-WA) on the other hand would encourage the Agriculture Committees to write a new farm bill that cuts commodity and crop insurance subsidies by $23 billion, with no net cuts to SNAP or to conservation.
Clearly, with the two parties and the two houses of Congress that far apart on farm bill basics, there is little hope for a new farm bill. However, if there is a grand bargain, it could include a directive to both the House and Senate Agriculture Committees to achieve the same amount of savings by a certain date. Under such a scenario where the amount to be cut and the deadline are the same, the odds that a new five-year farm bill can happen this year go up considerably.
Whether there is a mega deal coming or not remains to be seen. It remains highly improbable that Congress will allow the country to go into default. However, whether it reaches a deal or simply finds a new way to kick the can down the road is a matter that will be hotly debated for the next two months. The ultimate fate of the funding for the programs left stranded by the farm bill extension, and the ultimate fate of the new farm bill, could hang in the balance.
Categories: Budget and Appropriations, Farm Bill