Debt Deal Enacted, But Final Ag Cuts Won’t Be Known for Months
Leaders in Congress and the Obama Administration struck a deal this week to avert a government debt default, but how exactly the agreement’s spending cuts will affect agricultural programs won’t be known for a number of months.
The $2.4 trillion deal was passed by the House of Representatives on Monday and the Senate on Tuesday, the deadline by which the Treasury Department said the U.S. debt ceiling had to be raised so the country could continue to pay its bills. President Barack Obama immediately signed it.
The plan will initially cut approximately $900 billion, only from federal discretionary spending, which is appropriated on a year-by-year basis. In the area of agriculture spending, this includes most notably agriculture research programs, though what will be included in the $900 billion is not yet clear.
Then, the balance of the cuts needed to complete the deal – an additional $1.5 trillion – will be identified by a bipartisan and bicameral “super committee”, set to be named by mid-August.
That group will look at both discretionary and mandatory spending, which means all farm safety net, conservation, market development and research programs could be up for funding reductions, including through a process known as CHIMPs, which stands for changes in mandatory programs.
Importantly, the deal finalized this week includes the opportunity for authorizing committees, including the Congressional agriculture committees, to weigh in on cuts within their areas of jurisdiction. This has been a key priority for agricultural groups, including NAWG.
The deal calls for committee reports on possible cuts to be due Oct. 14, with the super committee to report by Nov. 23 and an up-or-down vote in Congress on the package by Dec. 23, immediately before recessing for the holidays.
Should the process break down at any point, the deal includes a fail-safe measure that would call for across-the-board cuts through a budgetary process called sequestration.
House Agriculture Committee Ranking Member Collin Peterson (D-Minn.) said this week that the sequestration process would not include the food stamp program, SNAP, or the Conservation Reserve Program (CRP), though it is yet unclear what other programs may or may not be included. Peterson told news outlets his staff has calculated possible cuts from sequestration as low as 5 percent of spending for programs affected, but cautioned that was a rough estimate.
It is clear that the super committee process, should it be successful, will require agriculture cuts, though it is unclear at what level and in which fiscal years.
Potential cuts to farm programs identified by other bipartisan panels and leaders in Congress have been estimated to be between $11 billon and upwards of $40 billion – which would decimate any sense of a farm safety net.
The implications of this process to the timing of the next farm bill are also unclear; the 2008 Farm Bill expires Sept. 30 of next year, but cuts called for by the super committee could accelerate the timeline on which the authorizing committees could act to rewrite programs. Multiple Members are said to be working on farm policy proposals already.
NAWG is working to gain as much information as possible about the coming super committee process and will continue to strongly discourage disproportionate cuts to the farm safety net and other vital agricultural investments, including market development programs and research spending.
NAWG also urges all farmers to meet with their Members of Congress during the August recess to emphasize the importance of key federal programs to their operations.
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