by Rich Pottorff, Doane chief economist & Washington analyst
Congress finally passed a bill that reopened the government, at least temporarily, and raised the debt ceiling enough to allow the government to pay its bills for a few months. The continuing resolution will fund the government until January 15th and the debt ceiling will allow the government to borrow money through February 7th. A committee made up of members of the House and Senate will be charged with developing a bipartisan budget by December 13th. If that doesn’t work, we could face another government shutdown in less than 3 months.
House leadership has finally appointed members to the farm bill conference committee but there is no set date for talks with Senate counterparts to begin. The appointed committee members are comprised mostly of members of the House Ag Committee and its Chairman, Frank Lucas (R-OK), will head up the conference committee. House Speaker Boehner named Representative Steve Southerland (R-FL) to the conference committee. This is significant because it was Representative
Southerland who led the fight to cut food stamp spending by close to $40 billion. His appointment suggests that House leadership will continue to insist on much bigger food stamp cuts than those likely to be readily accepted by the Senate. The Democrats’ committee members include Representative Marsh Fudge (D-OH), who staunchly opposes food stamp cuts.
The full House voted on some resolutions to help guide the members appointed to the conference committee this week. The House rejected a proposal that would have recommended changes to the sugar policy. The sugar policy was left basically unchanged in both the House and the Senate versions of the farm bill. The House did approve a resolution instructing conferees to support the Senate farm bill provision that would reduce crop insurance premium subsidies for farmers with incomes of $750,000 or more. The proposal would reduce the subsidy from a high of 62 percent to 42 percent. Conference committee members do not have to go along with this resolution – but probably will. A proposal to instruct conferees to set the term of the nutrition title of the farm bill at 5 years (the same as in the Senate) and to retain the current permanent farm legislation (the 1938 and 1949 laws) was voted down.
Getting a compromise bill through the conference committee will be difficult agrees House Agriculture Committee Ranking Member Collin Peterson (D-MN). He notes the obvious challenge will be those big differences between the House and Senate proposals for food stamps. But beyond that Peterson says there are other big, contentious issues. One is the dairy proposal. The Senate bill has a supply control provision that kicks in when prices get low. Peterson tried to get a similar provision in the House bill, but the plan was defeated on the House floor. There are also important differences on the target price-type programs with higher targets in the House version and tying payments to planted acres instead of base acres.
The American Farm Bureau Federation has also weighed in early. AFBF president Bob Stallman has sent a letter to farm bill conference committee members outlining the group’s position on key issues. Retaining permanent legislation and keeping farm-related provisions and nutrition linked were at the top of the list. The Farm Bureau opposes means-testing as part of eligibility determination for program benefits. It also opposes caps for farm program payments and has recently dropped out of a coalition that favored linking crop insurance and conservation compliance.
The Environmental Protection Agency now says the leaked documents indicating significant cuts to ethanol mandates for 2014 were only “draft proposals” and that decisions about the mandates for next year have not been finalized. EPA Administrator Gina McCarthy says that no decisions will be made on 2014 standards until stakeholders have a chance to comment on any proposals. Reductions in ethanol mandates for 2014 have been expected, but the 15.21 billion gallons indicated in the leaked documents were lower than most people had expected and put pressure on corn prices.