Farm Bill and Budget Deal Moving Forward
December 13th, 2013
Behind closed door action on the farm bill this week did not yield the expected announcement of an agreed upon framework, but did seem to push closer toward a final package. There has been a very noticeable uptick in discussions and decision making on numerous issues that had, in earlier negotiations, been left open. And by most accounts, budget estimates for the emerging commodity title of the farm bill have just been completed that suggest they are close to their overall spending and deficit reduction goals for the commodity subsidy portion of the farm bill.
Negotiations are expected to continue next week, even with the House having left for the holidays, with the goal of having everything ready for a formal meeting of the conference committee on January 8 or 9. At that time, the conferees will vote an any issues that have not been settled behind closed doors, and then vote to adopt the final conference report. At this point in time, that is expected to be a one-and-done meeting of the conferees.
To the best of our knowledge, some major issues remain open and under active debate. Those include:
- commodity program payment limit reform (including closing the loopholes that allow farms to collect unlimited subsidies) that is included in both bills, yet still faces backroom opposition by anti-reform forces;
- nationwide sodsaver protection (crop insurance reform to reduce subsidized destruction of grasslands) included in the Senate bill;
- an assault on fair market competition in the livestock sector that would eliminate most of USDA’s authority to maintain a fair and competitive market and to protect the rights of farmers and ranchers, an anti-farmer provision included in the House bill;
- reversing consumer-right-to-know country of origin labeling for meat, also included in the House bill; and
- the King amendment, another House provision, that would curtail the rights of states to regulate food, agriculture, and natural resources.
Some of those, if still unresolved after next week, could possibly go to a public vote when the conferees meet in January. We expect some of these to be worked out next week, eliminating the need for specific votes. Other unresolved issues might also be added to the list of issues requiring votes.
It appears that the big issues that have taken up much of the time in the so-called gang of four negotiations between the chairs and ranking members of the House and Senate Agriculture Committees are close to finished. That includes the widely reported, though still not officially confirmed, cut to the SNAP or food stamp program of $8-9 billion over the next 10 years. All or nearly all of the reduction is reportedly coming from forcing states to give low-income families receiving heating assistance more money before they can use that heating benefit as a deduction to qualify for a higher SNAP benefit. The food stamp title of the bill is also expected to include some job training pilot projects in lieu of the House-passed work requirement.
It also includes the new commodity program that would give grain and oilseed producers a choice between revenue protection payments or counter-cyclical payments. Both will be based on an updated version of historic “base” acres and will not be based on actual planted acres in the future.
Assuming a final bill gets mostly wrapped up next week and is then presented to the conferees on January 8 or 9, and assuming that after voting on the remaining open issues, a majority of the conferees support the final bill, it will then presumably be scheduled for floor action in the House and Senate later in January, about the same time, perhaps, as the final omnibus appropriations bill is also headed for floor action.
The latter must be passed by January 15 in order to avert a second government shutdown. The farm bill, on the other hand, does not have such a hard deadline, but will have the threat of antiquated permanent commodity program law kicking in and causing market mayhem. The House in fact this week passed a one-month extension of the old farm bill in order to defend themselves against charges of allowing those old farm programs to kick in. The Senate, wisely, is not taking up the extension, choosing instead to focus on getting the new farm bill finished and passed. A farm bill extension back on October 1, when the old farm bill expired, would have been a positive thing. But at this point in time, it is too late to be helpful, and could seriously harm the momentum that is building to get the new farm bill finished.
The vote on a final farm bill could turn out to be a close vote, and for sure will require substantial Democratic votes to pass. Aware of that reality, and upset that the budget deal did not include an extension of unemployment compensation benefits, some Democratic leaders are pushing to use a portion of the savings to be generated by the farm bill to offset additional unemployment benefits. Benefits otherwise expire at the end of this year for many of the long-term unemployed. Whether that play moves forward or not will depend in part on how many Republican votes can be rallied to support passage of the final farm bill.
It will be a busy week next week, with a Senate vote on the budget deal, with appropriators getting to work on the final spending bills for this year as soon as the Senate passes the budget, and with intense work on the details of all the titles of the farm bill. Then everyone will depart from the Hill, go home and drink lots of eggnog, and come back for what is shaping up to be a momentous January.