September 2, 2011
Congress returns to Washington, DC on Tuesday with two major funding activities ahead — the deficit reduction “super committee” process and FY 2012 appropriations. The former has enormous consequences for the farm bill and the latter for the farm bill and for food, rural and agricultural spending for the coming year.
Deficit Reduction Committee
One month after Congress passed the Budget Control Act of 2011, members of the special congressional committee set up to identify at least $1.2 trillion in spending cuts are gearing up for their fist meeting, which must be held by September 16.
As you may recall, Congress and the President agreed to a draft deficit reduction bill at the end of July. The bill was passed and signed into law on August 2. The agreement cuts the deficit and raises the debt ceiling in two phases. In the first phase, Congress raised the debt ceiling by $400 billion and will raise it by an additional $500 billion after September in return for a $917 billion ten-year cut to discretionary (appropriated) spending.
In the second phase, a special congressional committee made up of six Democrats and six Republicans is charged with recommending at least $1.2 trillion in spending cuts before Thanksgiving 2011, with an up or down vote by the full House and Senate by December 23. The 12-member special committee will decide whether farm bill programs are cut and if so by how much.
The members of the special committee are:
|House||Jim Clyburn (D-SC)
Chris Van Hollen (D-MD)
Xavier Becerra (D-CA)
|Fred Upton (R-MI)
Dave Camp (R-MI)
Jev Hensarling (R-TX), Co-Chair
|Senate||Max Baucus (D-MT)
John Kerry (D-MA)
Patty Murry (D-WA), Co-Chair
|Jon Kyl (R-AZ)
Rob Portman (R-OH)
Pat Toomey (R-PA)
A failure by the special committee to reach an agreement on at least $1.2 trillion in cuts would trigger automatic cuts, equally divided between security and non-security spending and including both discretionary and mandatory spending. Low-income programs such as food stamps and Medicaid would be exempt from such automatic reductions, and Medicare cuts would be limited to two percent of program outlays. On the agricultural side, the major program exempted from cuts is the Conservation Reserve Program (CRP).
Under the terms of the deal, the House and Senate Agriculture Committees have the option of recommending cuts to programs under their jurisdiction to the special committee by October 14. According to sources on the Hill, the Agriculture Committees are considering all levels of interaction with the special committee – everything from not submitting recommendations at all to submitting an entire farm bill proposal.
The Super Committee is expected to entertain proposals to consolidate, streamline and cut funding for farm bill commodity, crop insurance, and conservation programs. While the White House intends not to reveal the farm bill sequestration (automatic reduction) amount until after the end of the Super Committee process, it is widely anticipated to be in the neighborhood of $10 billion. Hence, Super Committee proposals and debates will be assessed in light of that amount that would kick in if the Super Committee process fails.
Fiscal Year 2012 Appropriations
All congressional action over the next three months will take place with the budget deal and deficit reduction committee as the backdrop. This is especially true for the Senate Appropriations Committee, which returns from August recess on Tuesday, September 6 to address federal appropriations for fiscal year 2012 (FY 2012). The Appropriations Committee intends to debate and pass all 11 remaining appropriations bills in the first part of September.
The agriculture appropriations bill will be considered on Wednesday, September 7 at 3pm EST.
For FY 2012, the Budget Control Act caps discretionary spending at $1.043 trillion. This is $6 billion less than FY 2011 but $24 billion more than the cap in the House budget resolution, which passed earlier this year. That resolution formed the basis for the funding levels contained in the FY 2012 House agriculture appropriations bill, which passed in June. In order to make up for the very low discretionary spending allowance, the House agriculture appropriations bill would cut over $1 billion from mandatory farm bill programs, primarily from the conservation title.
Fortunately, this same allowance (discretionary cap) is $24 billion higher on the Senate side. In early August, the Senate Appropriations Committee used the numbers contained in the Budget Control Act of 2011 to set its FY 2012 appropriations allocations for each Senate Appropriations Subcommittee, including the Agriculture Appropriations Subcommittee. While we do not know the exact amount allocated for Agriculture Appropriations, the higher spending cap in the new budget deal should have greatly reduced the need to rob the farm bill to pay for appropriations.
Nonetheless, advance word on the funding levels in the draft bill indicate cuts of at least $650 million, less than the House, but still huge. This proposal comes despite the huge unmet need for conservation support, large farmer backlog trying to get into the programs, and mounting environmental pressures from hyper agricultural land and production markets.
The fact that both the House and Senate would cut farm bill spending in the otherwise non-germane annual appropriations bill ups the ante on the Super Committee process. Further cuts at that level would mean conservation and environmental spending would be taking a double hit. NSAC is prepared to argue strongly against such an outcome.
Once the Senate Appropriations Committee approves each subcommittee’s appropriations bill, the bills will go to the full Senate to be passed before the end of the fiscal year on September 30. The bills will not become law until the House and Senate negotiate a final FY 2012 appropriations package in conference.
Congress is unlikely to go to conference before the end of the fiscal year, and will therefore need to pass a continuing resolution, temporarily carrying FY 2011 funding levels into FY 2012.
NSAC will be attending the Senate Agriculture Appropriations mark up on Wednesday, and will soon after report on the outcome. We will also share our recommendations to the Super Committee with our readers in the near future.