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Will farm programs escape deep cuts?
No one really knows how the next step in trimming the growth in federal spending will play out, but it’s a hot topic in Washington.
Congressional leaders haven’t even appointed the all-powerful super committee of 12 senators and representatives charged with trimming $1.5 trillion from the federal deficit over ten years.
But already there’s speculation about what might happen, including how their work will affect farm bill spending and the agriculture committees in Congress. The debt ceiling deal signed into law this week gives the super committee until Thanksgiving to come up with cuts. And they’re supposed to listen to the advice of Congress’ committees of jurisdiction—including agriculture.
Representative Collin Peterson (D-MN), the former chairman of the ag committee, pointed out to Agriculture.com that House Speaker John Boehner (R-OH) has assured his committee and others that they’ll have input.
But there’s still a lot of uncertainty and confusion about what’s going to happen.
If the committee can’t reach agreement, which some opponents of the debt deal said on Monday is likely, then the debt ceiling deal (officially called The Budget Control Act) will require automatic across-the-board cuts in spending.
Peterson believes the rate of cuts will be about 4% or 5%, but he’s not certain and he has an economist on his staff poring over the bill. One thing that makes this difficult is that the Budget Control Act also exempts some programs from any mandatory cuts that would come if the super committee is gridlocked, or if Congress doesn’t pass the committee’s recommended cuts.
Agriculture.com reported incorrectly Monday that a 4% across-the-board cut would amount to trimming $32 billion over 10 years for commodity programs. Instead, that’s the approximate amount that would be cut if all farm bill spending were trimmed, not just commodity programs. (The rough calculation was 4% of $800 billion in total farm bill spending over a decade.)
Farm bill spending is a moving target that keeps getting bigger as more and more people have signed up for food stamps during the recession and anemic recovery. Nutrition programs, which are mostly food stamps, make up between three-fourths and 80% of all farm bill mandatory spending.
Last year Congressional Research Service estimated that the farm bill will cost about $80 billion a year over its five-year life through 2012. For the next five years, it projected out to a yearly average of nearly $89 billion annually. And in March of this year the Congressional Budget Office, the ultimate arbiter of what federal programs really cost, increased the projection for the farm bill again, to $932 billion over 10 years.
The recession and the slow recovery of the economy seem to be driving most of this. Last year USDA’s Inspector General reported that Americans were signing up for food stamps at the rate of 20,000 people a day.
Farm bill statistics reflect this. Actual spending on food stamps in 2008 was $37.7 billion. This year, in 2011, it’s expected to pass $75 billion.
On Wednesday, Peterson, the top ranking Democrat on the ag committee, told the website, FarmPolicy.com, that the Budget Control Act exempts food stamps from across-the-board cuts if the super committee deadlocks. Spending on the conservation reserve program is also exempt, he said.
“From what I know, a four or five percent sequestration would be in the range of $5- to $6 billion in our jurisdiction, which is much lower than anything that’s been talked about,” Peterson said.
Other budget cutting ideas have targeted agriculture. In one of many failed efforts to reach an agreement on the debt ceiling, Senate Majority Leader Harry Reid (D-NV) has proposed $11 billion in cuts to farm programs over 10 years. And that was lower than some $30 billion in proposed cuts to direct payments and crop insurance in a budget proposed by Representative Paul Ryan (R-WI) in the House. Vice president Joe Biden’s debt negotiating group, another effort that fell apart, reportedly was looking at $34 billion in cuts to direct payments.
In theory, the super committee would have the power to make that $32-billion haircut to farm bill spending over 10 years and include food stamps.
Some advocacy groups are already warning that could happen. USA Today on Wednesday reported that “cuts in domestic sending could affect services that low-income seniors rely on, such as nutrition, caregiving and senior job placement programs, according to AARP.” (Most of the nutrition title of the farm bill goes to food stamp spending.)
Still, Peterson doesn’t think that food stamp cuts are likely. Disagreement over cutting food stamps is one of many issues that could gridlock the super committee, he believes.
There’s no guarantee the super committee will gridlock, however. And a big question for agriculture is whether or not the committee will have enough urban liberals and conservative budget hawks to team up to make bigger ag cuts, and whether or not Congress will approve whatever the committee produces.