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Crop Insurers Saved in Last-Minute House Deal

The crop insurance industry narrowly averted a $3 billion cut when House Agriculture Chairman Mike Conaway struck a deal with Republican leaders shortly before a final vote on a two-year budget bill. 

The proposed cut to crop insurers remains in the bill, which the House approved 266-167 late Wednesday afternoon, but the provision will be reversed when Congress considers a fiscal 2016 spending bill in December, Conaway said. 

USDA was supposed to carry out the cut before the end of 2016 by lowering the cap on the insurance companies' rate of return. The $3 billion in savings that the cut was supposed to produce will be found in some other, nonagricultural area of the federal budget.

Conaway, who had argued that the cut was so draconian that it would drive companies out of the crop insurance business, agreed to support the bill and urged other members of his committee to do so. Many GOP committee members still voted against it, including Steve King of Iowa and Randy Neugebauer of Texas, who represent major farm districts.

“The only leverage I had was to say I couldn't vote for a provision that would basically destroy the crop insurance industry,” Conaway said.

It was too late Wednesday to legislatively strip the provision from the budget agreement before the House vote. 

“I have assurances I trust from people I trust that when the omnibus comes around, this will be the first thing fixed,” said Conaway, who emerged from off the House floor after talking to Majority Leader Kevin McCarthy, R-CA, and a number of Agriculture Committee members.

Paul Ryan, who was nominated by Republicans Wednesday to become the next House speaker, signed off on the deal, Conaway said. 

House Agriculture's top Democrat, Collin Peterson of Minnesota, also agreed to support the budget agreement. “I'm pleased that we have an agreement to fix the crop insurance cuts and not open the farm bill... We produced a fiscally responsible and bipartisan farm bill in 2014 that saved $23 billion. We've done our part.”

The crop insurance cut had emerged as one of the biggest obstacles to congressional passage of the budget agreement, which will increase the federal debt limit and increase caps on domestic and defense spending through fiscal 2017.

The insurance provision had come as a shock on Capitol Hill only 48 hours earlier when lawmakers first got word of it.

Conaway, Peterson, and Senate Agriculture Chairman Pat Roberts, R-KS, all said the proposal originated at the White House, and that GOP leaders kept the committees completely in the dark until Monday afternoon. 

The White House was tight-lipped, too. Even top officials at the Agriculture Department were unaware of the provision, sources tell Agri-Pulse

.

One trade industry group, the Crop Insurance Research Bureau, issued a statement after the deal was struck Wednesday, saying the group “was thrilled with this news from the House and appreciates the support for crop insurance demonstrated by both the House and Senate Ag Committees over the last intense 48 hours.”

The budget agreement, which still needs Senate approval, would raise government-wide spending limits by $50 billion in 2016 and $30 billion in 2017 and will effectively push the risk of another government shutdown into 2017, after the next president takes office. The extra money would be divided up by appropriators as they write the fiscal 2016 omnibus. 

Ryan, who will be formally elected speaker on Thursday, initially denounced the back-room negotiations that led to the budget agreement but announced Wednesday that he would support it. “There is no doubt that a better process would have produced a better result. … we simply can't keep doing business this way.”

Written by Philip Brasher for Agri-Pulse Communications, Inc.

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