Senate Agriculture Committee Passes Farm Bill Cuts
On Wednesday, October 19th, the Senate Agriculture Committee passed a budget reconciliation bill by a high drama, razor thin 11-9 vote, cutting $4 billion in mandatory spending over 5 years from farm bill programs and extending the MILC dairy payment program through 2007 at a cost of $1 billion, for a net $3 billion savings.
The bill proposed by Chairman Saxby Chambliss (R-GA) and adopted by the Committee without any changes was basically identical to the Chairman’s earlier version from two weeks ago, except that cuts to the food stamp program totaling $574 million were dropped from the bill, with the difference offset by a reduction in the percentage of direct commodity payments received during the crop year and a corresponding increase in the percentage received at the end of the crop year.
It is widely rumored the food stamp change was required for the Chairman to secure the vote of Senator Jim Talent (R-MO). The Chairman also made minor changes to the structure of the sugar program cuts and, in response to an issue first raised by SAC, applied the 2.5 percent cut to commodity payments to generic certificates and loan forfeitures rather than just to loan deficiency payments and marketing loan gains.
The vote on final passage was high theater. Former Chairman Patrick Leahy (D-VT) joined the Republicans in support of the bill, the result of a deal he made to always vote with the chairman provided the MILC payments were extended.
Former Chairman Dick Lugar (R-IN), on the other hand, joined all the Democrats but Leahy in opposing the measure, to register his ongoing opposition to commodity programs as we know them. Former House Chairman Pat Roberts (R-KS), who played the leading role in getting markup postponed two weeks ago and who badly wanted to vote against the measure, was forced to vote for the measure when Senator Blanche Lincoln (D-AR), who was prepared to vote yes, first abstained, and then switched to no, forcing Roberts to vote yes or watch the whole bill and GOP effort fail.
After what felt like an endless half-minute pause of silence, he finally voted yes, mumbling that this reluctant choice was better than letting the Budget Committee decide how to allocate the cuts.
Over the next five years, the bill cuts the following:
** Conservation Security Program by $821 million -- or 27 percent of the bill’s net cuts -- while reducing the program’s baseline for years 6-10 by an additional $646 million;
** Conservation Reserve Program by $129 million and the Environmental Quality Incentives Program by $135 million;
** Initiative for Future Agriculture and Food Systems by $336 million -- or 11 percent of the bill’s net cuts -- though it would leave IFAFS still considerably above the level provided in recent years by the Appropriations bill;
** Commodity programs by $2.732 billion, though $1 billion of that amount was the smoke-and-mirrors savings from changing the timing, but not the amount, of payments.
The Step II Cotton program was terminated, as per the Brazilian WTO cotton case, but the cut was made effective August 1, 2006 rather than the July 1, 2005 date in the WTO ruling. The Administration continues to say it wants the program to end this calendar year, but the cotton interests say no.
During mark-up, Senator Crapo (R-ID) and Senator Roberts (R-KS) offered an amendment that aimed to restore cuts to commodity, conservation and research programs by preventing extension of the MILC program, arguing that cuts to farm programs were poorly timed due to rising fuel and fertilizer costs and it that it was unfair to penalize non-dairy farmers for the costs of the extension. The amendment garnered the votes of only the 5 Westerners on the committee - where the dairy program is opposed by large-scale confinement dairy operations -- plus Senator Lugar.
Payment Limitation Reform On-Deck: During the markup, Senator Grassley promised that the Grassley-Dorgan payment limitation reform amendment would be offered to the Budget Reconciliation bill when it comes to the Senate floor in November. He reminded the Ag Committee members that the last time the Senate had an opportunity to vote on payment limits the measure passed with 66 yes votes. Following the mark-up, the entire press gallery made a beeline for Grassley, who spoke to them about payment limitations at some length.
We expect to know the more precise outlines of the payment limitation reform amendment possibly as early as the end of next week. The basic outline of the amendment is clear, however-- comprehensive payment limitation reform, yielding savings that will offset a substantial amount of the cuts to commodity and conservation programs, including the CSP.
The timing of floor consideration is unknown. The first big event of next week will be Finance Committee markup of its health care portion of budget reconciliation – the biggest overall portion and the most politically sensitive – on Monday afternoon. If that passes and the other 6 committees with reconciliation instructions get through their respective markups next week, the Budget Committee will likely report a combined bill to the floor bythe end of next week.
From there, it will depend on Senate GOP leadership decisions as to when it gets scheduled for floor action, but we need to be prepared for possible action the week of October 31.
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John Crabtree, email@example.com
Center for Rural Affairs
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