Federal Budget Update: Farm Payments, EPA and Appropriations

Federal Budget Update: Farm Payments, EPA and Appropriations
By Oregon Farm Bureau


Last Friday, the Full-Year Continuing Appropriations Act 2011 was introduced. This continuing resolution (CR) will fund the federal government from March 5 through the end of the fiscal year on Sept. 30. The federal government is currently operating off of a CR good through March 4. The measure is expected to be debated for three days this week beginning Tuesday afternoon under an open rule. This means there is no limit on the number of amendments that can be offered. Proposals to make additional cuts are expected.

The CR would reduce federal spending $60.8 billion below the amount of spending that Congress approved for FY 2010.

In addition to the spending cuts, the measure would limit EPA’s authority to prohibit or restrict emissions of carbon dioxide or methane from any stationary source, prohibit EPA from expanding regulations or guidance pertaining to waters of the United States and prohibit funding for the Department of Interior to administratively designate wilderness areas for the rest of the fiscal year.

The proposed CR includes no earmark funding and eliminates all previous earmarks from FY 2010.
Agriculture would take a 22 percent cut from 2010 spending levels, second only Transportation, Housing and Urban Development at 23 percent. In dollars that means a total of $18.1 billion in funding, which is $5.2 billion below last year’s level.

The agriculture appropriations bill provides funding for a wide array of federal programs, mostly within USDA. These programs include: agricultural research; education and extension activities; natural resources conservation programs; food safety, marketing and inspection activities; rural economic and community development activities; telecommunications and electrification assistance; and various export and international activities of the USDA.


In his fiscal 2012 budget plan released yesterday, President Obama proposed eliminating federal farm payments to U.S. farmers with the highest adjusted gross incomes (AGI).

The Office of Management and Budget (OMB) has estimated that the cut would save $2.6 billion over 10 years, affecting about 30,000 people. Once implemented over a three-year phase-in period, payments would be made only to people with less than $500,000 AGI (from $750 k) from agriculture or less than $250,000 (from $500 k) off-farm AGI. A cut in direct payments from $80,000 per farm to $60,000 also was proposed, in addition to a revision to the crop insurance program that would save $1.8 billion over 10 years by reducing payments to insurers for policies against catastrophic losses.


In the Administration’s budget released yesterday, President Obama proposed a five year extension of Secure Rural Schools and Community Self-Determination Act (SRSCA).

The proposal calls for the 2012 funding level to be funded at $328 million and is approximately the same level as 2011 and then a ramping down over the next four years of 20% in 2013, 10% in 2014, 25% in 2015, and a final 25% in 2016. If going into the third year a state does not receive at least $10 million dollars, counties will no longer be eligible for the program. Estimates show this would leave only a handful of states as part of the program.

Oregon Farm Bureau will pass additional information on as more details unfold.

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