House Agriculture Chairman Collin Peterson started telling farm organization leaders months ago that writing the 2012 Farm Bill won't be easy. Don't expect any additional money for farm programs, warned the Minnesota Democrat. Look for innovative ways to provide a strong safety net.
In meetings across the country, it's clear that farm leaders have been heeding his clarion call. They know that attacks on farm programs could come at any time, from almost any direction: Tea Partiers and other fiscal conservatives, liberals, environmentalistsÉ.just to name a few. And event though most farm organization leaders want to do their share to reduce the federal deficit, they are facing some extremely tough choices. How much should they sacrifice for the sake of deficit reduction? Haven't they already taken cuts?
Some of the strongest challenges to current farm programs are coming from both Democrats and Republicans focused on reducing the federal deficit. Earlier this year, President Barack Obama appointed a bipartisan commission co-chaired by former Clinton White House Chief of Staff Erskine Bowles and former Republican Senator Alan Simpson.
The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission will propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015
In their first report on what they believe will be necessary to reduce the U.S. debt of almost $14 trillion dollars, the co-chairman proposed $4 trillion in savings over the next decade by capping domestic and military spending, rewriting tax laws, and reining in Social Security benefits.
Without going into great detail, the report's sweeping recommendations include these points related to agriculture: Achieve mandatory savings from farm subsidies . . . Reduce farm subsidies by $3 billion per year by reducing direct payments and other subsidies, Conservation Security Program funding, and funding for the Market Access Program.
Later this week, the co-chairmen are expected to unveil their final set of recommendations. With recommendations designed to upset almost every interest group in America, it's not clear whether or not they can win support for their own plan. They will need at least 14 of their 18 commission members to approve any final proposals, which will then be sent to the president.
After the co-chairs presented their first draft to their 18-member commission, lawmakers emerged emphasizing that the draft is simply a first attempt which will be subject to extensive rethinking. Senate Budget Committee Chair Kent Conrad (D-ND) called the draft a good beginning but said the next step is for commission members to offer alternatives.
More deficit-cutting plans
The commission report is likely to be the first of several calling for farm programs to be trimmed or eliminated. Just one week after the commission's report, the Bipartisan Policy Center offered a more detailed plan.
Former South Dakota Senator and Majority Leader Tom Daschle is one of the four founders of Washington's Bipartisan Policy Center (BPC) - the others being Howard Baker, Bob Dole and George Mitchell. Collectively, these four former Senate Majority Leaders assembled the blue-ribbon BPC Debt Reduction Task Force and endorsed its report, which calls for a comprehensive budget plan to cap federal spending, drastically overhaul the federal tax code, and create a 6.5% national sales tax. Their plan, chaired by former White House Budget Director Alice Rivlin and former GOP Senator Pete Domenici, would save $15 billion for the 2012-2020 period by taking a very focused look at all types of farm programs:
·eliminating all payments based on production history to large commercial producers (with combined farm and non-farm adjusted gross incomes (AGI) of greater than $250,000); and,
·lowering the cap on direct payments based on production history from its current $40,000 level to $20,000 (although counter-cyclical payments will remain intact).
The BPC plan proposes saving $9 billion over the 2012-2020 period by reducing USDA's Federal Crop Insurance Program administrative and operating costs subsidies paid to insurance providers to levels consistent with recent studies that estimate a reasonable rate of return and by reducing the premium subsidy for farmers from its current 60 percent level to 50 percent in order to equalize the sharing of costs and risks between the government and the producer.
The plan proposes saving $6 billion over the 2012-2020 period by tackling USDA's array of conservation programs. The report concludes that There is significant overlap between the various conservation programs that USDA funds, which creates inefficiencies that strain the federal budget. This proposal will eliminate that overlap by consolidating 16 of the programs into one capped entitlement that grows with inflation.
These conservation programs include: the Conservation Technical Assistance Program, Soil Surveys, Snow Surveys and Water Supply Forecasts, Plant Material Centers, the Grazing Lands Conservation Initiative, Agricultural Management Assistance, the Chesapeake Bay Watershed Program, the Cooperative Conservation Partnership Initiative, Environmental Quality Incentives (EQIP), the Agricultural Water Enhancement Program, Conservation Innovation Grants, Ground and Surface Water Conservation, the Farmable Wetlands Program, the Conservation Reserve Enhancement Program, Emergency Forestry Conservation Reserve Program, and the Voluntary Public Access and Habitat Incentives Program.
Tough decisions needed
If we can learn anything from the results of the elections, former Senator Daschle says, it is that the American people are anxious and frustrated with the state of the economy and with our mounting public debt. He warns that this urgent problem continues to grow worse thanks to the reluctance of policy