The October 14 deadline for the authorizing committees of Congress to send their deficit reduction recommendations to the Joint Select Committee on Deficit Reduction (often referred to as the Super Committee) has passed without a letter from the House and Senate Agriculture Committees. Word from the House and Senate Committees with jurisdiction over the farm bill is that they are close to having a joint letter ready to share with the Super Committee, but there are still some issues being worked out. It is not clear yet if the letter will be issued later this weekend or sometime early next week. Nor is it clear what issues are holding up the letter, which means that all of the rumored details (see below) could still be in a state of flux.
According to multiple published accounts, the farm bill deal that will be offered to the Super Committee will be a net reduction in farm bill spending of $23 billion over the next decade. The package is expected to include a proposed shift from in commodity programs from direct and counter-cyclical payments to revenue-based payments. That shift in commodity payments would still benefit the same “program” crops, primarily corn, soy, wheat, cotton and rice, but at a somewhat reduced cost to the taxpayer. The savings could be in the range of $1 billion to $2 billion a year relative to current farm programs.
Earlier bills and suggested commodity program changes from congressional sources and from the Administration had higher savings, in the $2 to $3.5 billion a year range. As a result of the smaller proposed commodity program cuts, and in light of the apparent decision to not touch crop insurance — the largest of all taxpayer subsidies to agriculture — the package that is emerging will likely include cuts to both conservation and nutrition programs. Those conservation and food stamp cuts are rumored to be a combined $10 to $12 billion over the next ten years.
Also not yet clear is how big the savings will be above the $23 billion net figure. The Committees would need over $4 billion in additional funding just to restore current mandatory farm bill programs without secure funding past 2012, and more than that if there are to be any program expansions or new funding areas for the new farm bill. (The $4 billion figure does not include the permanent farm disaster payment program, which is now assumed to be absorbed within the new revenue-based farm program.)
Without $4 or more billion at its disposal, the Committees would not be able to renew support for new and beginning farmers, minority farmers, rural micro-enterprise, organic farming, direct marketing, specialty crop research, wetland and grassland preservation, and renewable energy programs, or invest any significant funds into increasing rural job and economic growth.
Observers expect that the letter from the Agriculture Committees to the Super Committee will not include any details about how the proposed cuts would be divvied up, but rather will keep to broader messages. The Agriculture Committees are working under the assumption that they will have approximately two more weeks to develop all of the details to reach$23 billion in net cuts and to send those details to the Super Committee by the beginning of November.
It is not yet clear what type of process will be used to achieve that detailed package. Whether there are any public hearings or business meetings of the Committees or whether the details are hammered out behind closed doors remains to be seen. Of course, whatever the Agriculture Committees deliver to the Super Committee is a recommendation. The Super Committee can accept it, reject it, or revise it. Hence, there is no absolute certainty that the final farm bill 10-year funding cut will be $23 billion.
The Super Committee has until Thanksgiving to come up with a package that saves $1.2 trillion or more across the entire government. If the Super Committee succeeds in reporting a bill, the vote by the House and Senate on the bill will be in December. Under rules established by the Budget Control Act, the vote will be up or down, no amendments allowed, no filibusters allowed vote.
If the Super Committee fails to deliver, or if the package is voted down on the floor, then automatic across-the-board cuts of $1.2 trillion will kick in a year later, with half the cuts coming from defense and half from non-defense.
Under the automatic option (called sequestration), the farm bill would be subject to cuts of approximately $15 billion, less than the amount being proposed to the Super Committee now. The composition of the cuts would also be different. The SNAP program (food stamps) and the Conservation Reserve Program, two programs slated for cuts in the emerging $23 billion package, would be exempt from any cuts. With those exceptions, all other farm bill programs would be cut on a pro rata basis.
We will provide our readers with more information about the Agriculture Committees’ letter once it is published, presumably in the next day or two.
NSAC’s communications on the farm bill budget to the Agriculture Committee and to the Super Committee can be found here.