The Hagstrom Report

Agriculture News As It Happens

Conaway: Debt-ceiling agreement doesn't include farm bill cuts before 2013


STOWE, Vt. — The agreement to raise the debt ceiling and cut spending announced by congressional leaders and the White House Sunday night will not include cuts to farm programs before 2013, but may lead to a rewrite of the farm bill later this year rather than in 2012, a key House agriculture leader told the American Sugar Alliance by videoconference here today.

Rep. Michael Conaway, R-Texas, a House deputy whip and chairman of the House Agriculture General Farm Commodities and Risk Management Subcommittee, said he will support the debt ceiling agreement, and that both Republicans and Democrats in Congress and President Barack Obama must make sure that the bill passes and is signed into law.

“Failure is not an option,” Conaway said. The Treasury Department has said that if the debt ceiling law is not passed by Tuesday the government will begin running out of money to pay its bills.

The Senate is expected to act first on the bill.

The bill would have “no effect” on agriculture programs before 2013, Conaway said. But he also said that, while House Agriculture Committee Chairman Frank Lucas, R-Okla., has been proceeding with “regular order,” meaning that the farm bill rewrite would occur next year because the bill expires Sept. 30, 2012, the rewrite may occur this year as a result of the deficit discussions.

The debt-ceiling-budget bill announced last night does not appear to contain the $11 billion cut to the direct payments program beginning with the 2012 crop year that Senate Majority Leader Harry Reid, D-Nev., had included in the bill the Senate rejected on Sunday.

Conaway said the bill to which the congressional leadership and the White House have agreed “mirrors” the bill the House passed last week, with some modifications. Conaway noted that under the House bill, agriculture was not singled out for cuts.

The debt ceiling bill would require $900 billion in immediate spending over 10 years cuts in exchange for raising the debt ceiling. It includes no new taxes. The bill also sets up a procedure for further cuts before the president could raise the debt ceiling again.

It provides for votes on a balanced budget amendment, but that seems unlikely to pass the Senate. The bill sets up a special joint committee of Congress to come up with a plan by December to cut $1.5 trillion in federal spending between 2012 and 2021. If the committee fails to act, there would be automatic cuts in both domestic and defense spending.

Congress and the new joint committee would be on a tight schedule for the rest of this calendar year:
  • 14 days after passage of the debt ceiling bill: Majority and minority leaders of the House and Senate will each appoint three members of the 12-member committee.
  • Oct. 14: Each committee of jurisdiction in the House and Senate will report its recommendations for cuts from the programs under its jurisdiction.
  • Nov. 23: The joint committee will vote on a bill.
  • Dec. 2: The joint committee will release legislative language on the bill.
  • Dec. 9: The committees of jurisdiction will recommend whether or not to pass the committee bill.
  • Dec. 23: The House and Senate must vote on the bill.

The need for the Agriculture committees to recommend cuts by Oct. 14 means that whether the committees formally rewrite all the farm bill this year or not, they have to discuss what cuts they would make and how the cuts would affect each program and the interaction between them.

The biggest battles may not be over the farm programs, but over the nutrition programs that now make up more than 70 percent of the USDA budget. The bill appears to protect the supplemental nutrition assistance program or SNAP, which was previously known as food stamps, and probably protects the special nutrition program for women, infants and children known as WIC from immediate cuts, but neither program is protected from long-term cuts. There is a precedent in a 1985 budget control act to include WIC and food stamps in low-income programs that are exempted in the short term.

While SNAP is an entitlement program with mandatory spending on all who qualify, WIC is a discretionary program that makes up about half the appropriated Agriculture budget. If WIC is protected, other agriculture programs such as food safety, research, energy, rural development and conservation would have to bear the brunt of the cuts. If it is not protected, there is likely to be a big political battle over the question of cutting aid to low-income mothers and children.

In a broader discussion of the Title I farm programs whose rewrite he will oversee, Conaway told the sugar growers that it is vital to maintain the sugar program as a no-cost sugar policy. “Sugar policy has worked really well,” he said.

Conaway also stressed the importance of crop insurance to all crops, saying it is the only thing besides faith in God that is “keeping people afloat” during the drought in Texas this year.

But he said crop insurance is working better for beet sugar growers than for cane growers, and that that crop insurance should be improved for cane.

Finally, Conaway listed his principles for any changes to the basic farm subsidy or Title I programs that come under his subcommittee's jurisdiction:
  • Crop insurance should not be undermined.
  • Policy help necessary for farmers in dealing with their bankers.
  • Addressing farmers’ risk should be part of the program, with U.S. government trade commitments in mind.
  • All crops under Title I should be treated equitably.
  • Policy should be understandable to both farmers and bankers.

“Production agriculture in America is a great story,” Conaway told the sugar growers. Speaking of media accounts he considers distorted, he said “We need to set the record straight.”