Budget plans call for deep cuts from ag

Budget plans call for deep cuts from ag

- House budget calls for $31b in ag savings. - Peterson urges balanced cuts across farm bill programs. - Senate proposal notes importa

THE House and Senate both released budget proposals last week that call on their respective agriculture committees to make deep cuts in farm programs but stop short of telling the committees how much to trim from each program.

House Budget Committee chair Paul Ryan's (R., Wis.) proposal for fiscal year 2014 calls on the House Agriculture Committee to institute reforms that save taxpayers $31 billion. Ryan suggested that ending direct payments and reforming crop insurance could help meet the savings target.

In his plan, Ryan notes that American agriculture has remained a strong economic success story, and its prosperity should be celebrated, but "taxpayers should not finance payments for a business sector that is more capable of thriving on its own."

The budget plan points to what Ryan said is the "flawed structure" of the Supplemental Nutrition Assistance Program (SNAP) that allows states to receive more money if they enroll more people in the program.

For the program to remain viable and deliver on its important mission, Ryan said the increased abuse of SNAP must end today. "It must encourage states to reduce fraud. In so doing, it can help feed the hungry -- without lining the pockets of those who abuse the system," the plan says.

Ryan's budget urges the House Agriculture Committee to revisit current farm support programs.

"With farm profitability -- and deficits -- continuing at high levels, it is time to adjust support to this industry to reflect economic realities," his plan says. "Recognizing that the agriculture committee is responsible for implementing these reductions, and to maintain flexibility for the committee, this proposal does not dictate the specific changes to the programs under the committee's jurisdiction. These reforms will save taxpayers $31 billion over the next decade."

House Agriculture Committee chair Frank Lucas (R., Okla.) welcomed Ryan's budget outline, which would balance the budget in 10 years.

"Last year, we developed a reform-minded, fiscally responsible farm bill that contributed to deficit reduction, and we will continue on that same course this year," Lucas said. "We will consider the suggestions contained in chairman Ryan's budget, as is customary for the agriculture committee to consider a variety of viewpoints when crafting comprehensive legislation."

Ranking committee member Rep. Collin Peterson (D., Minn.) was less receptive to Ryan's proposal. He criticized Ryan for not putting forth an actual budget but, rather, a "political messaging document" that falls short of forcing the tough choices that need to be made to get the nation back on solid financial footing.

Peterson said the committee's farm bill proposal last year showed that it's possible to find budget savings in a bipartisan fashion by making balanced cuts across farm bill programs.

"If the House Republicans do take (Ryan's) budget numbers seriously, I don't see how they can be serious about passing long-term farm policy this year. If these are the budget priorities for the House majority, agriculture might best be served by again extending the current farm bill," Peterson said.

Last year, the committee identified more than $35 billion in net savings from programs under its jurisdiction, including $14 billion from commodity and crop insurance programs, more than $6 billion from conservation programs and $16 billion from nutrition programs.

In the House Agriculture Committee's Feb. 26 budget letter to Ryan, the leaders noted that agriculture wants to be a part of the solution to the nation's debt crisis.

The committee said it "firmly believes in a true safety net, not payments regardless of market conditions. These and many other substantial reforms produced over $14 billion in savings from the farm safety net. In addition, we reaffirmed that crop insurance, which is distinct from traditional farm policy, has become the cornerstone of risk management in agriculture for a great many producers."


Senate proposal

For the first time in four years, the Senate took an official stab at its budget, but it, too, stopped short of telling the Senate Agriculture Committee where to make cuts.

Senate Budget Committee chair Patty Murray (D., Wash.) said if her budget proposal passes, the total deficit reduction since issuance of the December 2010 report from the National Commission on Fiscal Responsibility & Reform will consist of: 64% spending cuts, 14% tax rate increases on the rich and 22% new revenue by closing loopholes and cutting wasteful spending in the tax code for the wealthiest Americans and largest corporations.

Specifically, her budget "supports responsible spending reductions in farm programs" and "provides flexibility to the Senate Agriculture Committee to write a strong, five-year farm bill that will maintain an effective safety net for farmers and will continue to invest in communities through key conservation, research, nutrition, energy and rural development programs."

The Senate plan also says it supports agricultural research and notes that "across-the-board cuts from sequestration would weaken our country's research capabilities, which would hurt the competitiveness of our agriculture sector by making it harder for our farmers to keep up in the race for new crop varieties."

Sen. Chuck Grassley (R., Iowa) raised questions about Murray's budget plan, which calls for $23 billion in savings from Function 350, which is one of only three functions in the budget resolution for agricultural spending. It includes commodity programs, crop insurance, agricultural research and certain farm loans but does not include conservation programs or nutrition programs.

According to the Congressional Budget Office, nutrition programs account for about 76% of farm bill spending, while commodity programs and crop insurance account for about 15%.

"It's only logical that all elements of farm bill spending will need to be reduced, not just commodity programs and crop insurance, which account for less than one-fifth of all farm bill spending," Grassley said.

Volume:85 Issue:11

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