UPDATE - Farm Payment Limits

- from the desk of Ferd Hoefner, Sustainable Agriculture Coalition, fhoefner@msawg.org

Ag Budget Reconciliation Mark Up Rescheduled

Senate Ag Committee Chairman Saxby Chambliss (R-GA) has scheduled mark up of his $4 billion farm bill budget-cutting legislation for Wednesday, October 19. After canceling the markup prior to this past week’s congressional recess, it appears as though the Chairman is planning to bring back the identical package, with the hope of winning bipartisan majority for retaining the 2-year, scaled back extension of the MILC dairy payment program followed by agreement from all Republicans to stand by the Chairman’s proposed cuts to commodity, conservation, and food stamps programs.

Whether that feat can be pulled off, after falling apart earlier, remains to be seen. We should have a better sense of the dynamics once Senators are back in town on Monday. During next week’s mark up, Senators Roberts (R-KS) and Crapo (R-ID) are expected to offer an amendment dropping the MILC extension and reducing the cuts to commodity programs.

The vote on that amendment would be perhaps the key vote in determining whether a package gets reported out or not. Senator Lugar (R-IN) is not expected to attend the markup, but his amendment to apply full planting flexibility to the direct payment commodity program, a move which would settle part of the successful Brazilian WTO case, might be offered by someone else or otherwise saved for floor consideration.

Senator Harkin (D-IA) is expected to offer an amendment to restore the proposed $821 million in cuts to the Conservation Security Program by capping EQIP funding at between $1 billion and $1.1 billion a year. Senator Dayton (D-MN) may offer his amendment to pay for full restoration of the MILC payments by enacting payment limit reform, but if so, it is expected to be defeated on a near partisan basis.

The full blown comprehensive payment limit reform measure, to be offered by Senators Grassley (R-IA), Dorgan and Conrad (D-ND) and others will not be offered in committee but rather be held for floor consideration and a floor vote (more on this below). The deadline for sending budget-cutting legislation to the Senate Budget Committee is October 26. If the Senate Agriculture Committee fails to pass a 5-year bill outlining cuts to USDA programs, jurisdiction over funding cuts will go the Budget Committee. The threat of the Budget Committee -- where we have prevailed three years in a row by large majorities in support of strict payment limitations -- writing the bill is Chambliss’ strongest card and may well prove to be sufficient to ensure would-be GOP defectors will decide to hold their fire.

What About the House? Next week the House of Representatives will vote on an amendment to the Budget Resolution increasing the size of the mandatory program reconciliation cuts from $35 billion to $50 billion over the next five years. This move is being made by GOP House leadership to quell the threatened defection of its right wing over burgeoning federal spending following Katrina and Rita.

Once passed, the additional $15 billion in cuts will have to be allocated to the various committees, with the likelihood that agriculture will be asked to do more than the current $3 billion in cuts. This action delays House Ag Committee consideration of its piece of budget reconciliation by at least a week. Our crystal ball says that if the Senate manages to approve its $35 billion cuts – a very big if, that is anything but a certainty – there is virtually no chance that it would be able to pass a final bill with much bigger cuts, making the House effort, at least in our crystal ball, seem like a lot of huffing and puffing.

for more information post a comment or question here or contact
John Crabtree, johnc@cfra.org

Center for Rural Affairs
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