May 21, 2010
With the financial regulation bill approved in the Senate and moving to conference with the House-passed bill, and with the one week Memorial Day recess just a week away, several key legislative items are starting to move quickly. A brief review follows, highlighting what is in the bills for food and agriculture.
Budget Resolution – A full-fledged congressional budget resolution outlining spending and deficits for next year and beyond now seems totally dead in the water. When Congress fails to pass a budget resolution, the alternative is a so-called “deeming resolution” specifying spending levels for the following fiscal year. Unlike the budget resolution, the deeming resolution does not include funding and deficit projections for the 5 and 10 years following, making it a somewhat easier vote in an election year at a time of high deficits.
The latest read on the deeming resolution is that it would likely freeze domestic discretionary spending in 2011. There will very likely be an attempt to attach it to the supplemental appropriations bill (see below). If the deeming resolution cannot hitch a ride on must-pass legislation in the very near future, it is also possible there may be an informal agreement to simply accept its spending outlines as a given. One way or the other, an agreement must be reached so that the appropriations committees can start in on their annual funding bills.
Once the overall spending outline has been agreed to, the appropriations subcommittees will battle over how big a slice of the overall budget pie they will receive to work with. Agriculture did fairly well in that respect last year, but with the likelihood of a freeze, the bidding could prove tougher this year. The subcommittee allocation, which should be set in early June, will be the first key determinant in the ability of the food and ag spending bill to respond to sustainable agriculture priorities. NSAC is encouraging agricultural leadership to fight for a fair allocation.
Supplemental Appropriations Bill – Both houses of Congress will be taking up the $60 billion supplemental appropriations bill (H.R. 4899) next week. In addition to emergency funding for the war in Iraq and Afghanistan and for a variety of US natural disasters, the Senate version of the bill includes an important funding increase for direct and guaranteed farm operating loans and guaranteed farm ownership loans. Without the supplemental funding, USDA’s Farm Service Agency will run out of loan funds next month for the rest of the year.
Also included in the Senate bill is an $18 million appropriation for emergency forest restoration for lands damaged by natural disasters. The bill pays for the $31.6 million cost of increasing lending authority by $950 million and the $18 million forestry item by cutting spending for the Biomass Crop Assistance Program (BCAP) by $50 million, capping BCAP at $552 million for the year. BCAP was originally intended to be a fairly small program, but spending for it has skyrocketed under a very broad interpretation of the law by USDA. NSAC strongly supports the credit provision.
The major debates on the supplemental bill will center on fights over costs and how much of the bill or new additions to the bill — including an upcoming move to add $23 billion for emergency support to keep teachers from being laid off due to local budget cuts — should be offset with spending reductions in other programs.
Tax Extenders Bill — The $200 billion “American Jobs and Closing Tax Loopholes Act” (H.R. 4213) is also moving rapidly toward floor consideration in both houses. It extends a wide variety of targeted tax expenditures as well as unemployment benefits. Visit HKM.com to further understand employment laws. The bill also carries emergency aid to local government, emergency disaster relief, a summer jobs program, a multi-year postponement of the scheduled cut in Medicare physician payments, and a major reform in the size of fees recovered from oil companies in the wake of oil spills.
For agriculture, the bill includes $4.6 billion to pay for settlements in the Pigford (black farmer) and Cobell (American Indian) lawsuits. NSAC supports the inclusion of the long overdue funding for the settlements.
The bill also includes a $1.5 billion agricultural disaster relief package, including the controversial $1 billion in supplemental direct payments to producers with a 5 percent or greater lass in production.
In the tax extenders portion, the biodiesel production tax credit, small agri-biodiesel producer credit, and biomass diesel tax credit are all extended for one year, at a cost of $868 million. The charitable deduction for contributions of food inventories is extended for a year ($78 million cost).
Portions of the bill, including many big ticket items, have exemptions from “pay-go” rules and hence do not have to be offset under current congressional rules. Other parts of the bill do, however, need offsets, and that is where the “tax loophole” closing part of the bill’s title comes from.
The bill would force investment fund managers to pay regular rather than capital gains rates on a portion of income receive as “carried interest,” stop employment tax avoidance by professional service businesses, and close a wide variety of abuses of the foreign tax credit system for multinational corporations. Together, the loophole closers yield close to $60 billion in offsets.
With many politically important provisions expiring in coming weeks, there will be huge pressure to get this bill finished before the Memorial Day recess, so there should be lots of action next week.
Child Nutrition and Food Safety Waiting in the Wings – While the supplemental and tax extender bills, along with House-Senate conference on financial regulation, are front and center right now, waiting in the wings for Senate floor time after the recess are the Child Nutrition Act re-authorization bill and the Food Safety Modernization Act. There are no promises at this point for floor time for either measure, though both regularly appear on lists of bills needing floor consideration this year. Either or both of them could possibly be on the Senate floor between the Memorial Day and July 4 recess weeks, though nothing at this point is certain.
In the meantime, a draft of the House version of the Child Nutrition bill is expected next week, with markup in the House Education and Labor Committee expected sometime during the month of June.
Categories: Commodity, Crop Insurance & Credit Programs, Food Safety, Local & Regional Food Systems