Washington Insider -- Thursday

Now, For the Budget

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

House Agriculture Panel: Farm Bill Savings Should Spare It From Cuts

A recent Congressional Budget Office (CBO) estimate of greater than expected savings under the 2014 Farm Bill as one reason the House Budget Committee should not ask for additional spending cuts to farm, nutrition and other programs for Fiscal 2018, which begins October 1, according to the House Agriculture Committee. The remarks were contained in the panel’s views and estimates letter to the House Budget Committee.

USDA’s forecast of a fourth year of decline in net farm income in 2017 was also cited as evidence that it may need every dollar under its jurisdiction in writing a 2018 farm bill this Congress.

The budget views and estimates letter, approved by the committee by voice vote, reflected members’ sentiments that the panel has done its part for deficit reduction. Chairman Mike Conaway, R-Texas, and ranking member Collin Peterson, D-Minn., said the CBO’s January update on the current farm bill estimating $104 billion in budget savings over 10 years bolstered their argument.

CBO estimated in 2014 that the farm bill would produce $16.6 billion in savings over 10 years, and $23 billion over 10 years if sequester cuts were included. The agency’s recent revision of savings is largely based on a decline in the number of people receiving food benefits. CBO estimates the federal government will spend $92 billion less on SNAP over 10 years. Lower crop insurance spending than originally expected accounted for additional savings.

“An exclusive or even over reliance on savings from the Committee on Agriculture will ultimately fail to seriously move the needle in meeting the fiscal objectives that our Committees share while also seriously undermining the mission areas within the jurisdiction of the Committee on Agriculture,” the panel’s letter said.


Groups Urge Changes to Conservation Programs in Next Farm Bill

More funding, with fewer strings attached for agricultural conservation programs in the next farm bill was urged by conservation-focused farm groups testifying February 28 before the House Agriculture Subcommittee on Conservation and Forestry.

The groups cited what they said is a successful model of locally driven, voluntary programs financed through USDA. To that end, they urged Congress to boost federal funding for conservation initiatives including the Environmental Quality Improvement Program (EQIP), Conservation Reserve Program (CRP) and the Conservation Stewardship Program (CSP).

"Without this valuable funding, we would see less uptake of conservation practices, and in turn, we would see fewer conservation benefits," Jeremy Peters, chief executive officer for the National Association of Conservation Districts, said. He testified on behalf of Lee McDaniel, the association's former president.

Congress should increase funding for the conservation programs in the upcoming farm bill, Peters and others argued. They noted that the 2014 Farm Bill consolidated conservation programs from 23 to 13 and reduced conservation spending by almost $6 billion over 10 years, including sequestration.

Bipartisan support in Congress exists for voluntary conservation programs, but not for mandates, Ferd Hoefner, former federal policy director for the National Sustainable Agriculture Coalition, told Bloomberg BNA before the hearing. Hoefner's observation was echoed by Timothy Gertson, a member of the USA Rice Federation, who said “voluntary conservation works.”

Witnesses also highlighted their concerns about federal agriculture officials “inundated in paperwork” who as a result are unable to provide the technical advice farmers and ranchers need to improve soil and water quality on their lands. The Natural Resources Conservation Service (NRCS), part of USDA, provides technical and financial assistance to farmers in all 50 states through its voluntary conservation programs. Rep. Frank Lucas, R-Okla., who chairs the subcommittee, agreed that conservation programs can only have value if people are available to provide technical assistance on how to implement them.

Washington Insider: Now, For the Budget

Well, the President is receiving high marks for his Tuesday speech, which was not actually labeled a State of the Union presentation, but was given to a joint session of Congress and much of the rest of Washington Officialdom. Still, it is not surprising that a single speech failed to end policy uncertainty. And, it didn’t.

The President didn’t support the “border adjustment tax,” for example, or give many specifics of other proposals.

He did say he plans to submit a budget this spring that boosts federal spending on defense sharply, while deeply cutting funding for domestic programs. This prospect is raising substantial concerns among Democrats and Republicans alike, Bloomberg says, especially among appropriators who have to define and impose the reductions across the board.

To nobody’s surprise, Democrats said they aren't opposed to Trump's plan to boost money for Pentagon programs by $50 billion next year. But they won't be able to back the increase if the president insists they accept a similar reduction among non-defense programs.

Democrats are balking at the approach that implies cuts equal to the increase in defense that would be applied only to domestic discretionary spending, with large chunks of that excluded, including veterans and security. “This would mean massive and devastating cuts in key programs like education and medical research,” Senate Minority Leader Chuck Schumer, D-N.Y., said.

He thinks “both Democrats and Republicans are going to run away from it.”

new White House budget chief Mick Mulvaney said the plan would lift the threat of sequestration for the Pentagon but not for domestic programs.

One modest pushback came quickly from Senate Majority Leader Mitch McConnell, R-Ky., who opposes plans to cut the State Department budget, which he himself oversaw when he chaired the Senate Appropriations State and Foreign Operations Subcommittee. He cautioned the White House that spending bills can't get through the chamber without Democratic support.

When asked whether the Senate could pass a budget that deeply cut diplomatic programs, McConnell said, “Probably not. When we get to funding the government, obviously, it will be done on a bipartisan basis.”

Word about the expected administration proposals for deep cuts in the programs under their jurisdiction came as House and Senate appropriators are scrambling to try to finish the fiscal year 2017 spending bills and get them to the President’s desk by April 28.

In addition, appropriators are fighting speculation that Republican leaders may drop plans to bring their bills to the floor beginning next month and instead resort to a third stopgap to fund the government for the fiscal year that began Oct. 1.

At the same time, House Appropriations Committee members are beginning days of hearings dealing with requests for more federal money in the FY 2018 bills the panel will write this spring. Rep. John Culberson, R-Texas, chairman of the Commerce, Justice, and Science Subcommittee, said after hearing from more than 15 lawmakers that more federal support is needed for domestic programs they favor. He said that the Trump administration “needs to look at the mandatory side of the budget if it is serious about cutting the federal deficit and debt.” That, he said, means reining in Medicare, Medicaid and Social Security.

“Those mandatory programs are devouring a larger and larger share of revenue,” Culberson said, when asked about the president's budget request. “Thirty cents out of every federal dollar goes to annual appropriated operations of the federal government. The other 70 cents goes right out the door to these mandatory programs.”

“You remember the president's budget is a proposal, a recommendation,” Culberson said.

Culberson's panel was asked by lawmakers to fully fund the legislation passed last year to provide states with more resources to deal with the opioid crisis, combat sex trafficking and carry out the Violence Against Women Act. The subcommittee was urged not to “go backwards” and keep funding stable for the National Science Foundation.

Senate Minority Whip Dick Durbin, D-Ill., who also is the top Democrat on the Senate Appropriations Defense Subcommittee, said Democrats share Republicans’ concerns about the state of the military. “Readiness is really suffering through sequestration and budget cuts,” Durbin told reporters. “But unless there is some kind of parallel investment on the non-defense side, many of us are going to resist it.”

As always, here is intense competition for funding and enormous opposition to increases in the national debt—and, then the deep polarization in the overall political structure of the government. Health care is complicated, President Trump noted recently, but so is every aspect of the U.S. government and the coming budget debate should be watched closely by producers as it proceeds, Washington Insider believes.

Want to keep up with events in Washington and elsewhere throughout the day? See DTN Top Stories, our frequently updated summary of news developments of interest to producers. You can find DTN Top Stories in DTN Ag News, which is on the Main Menu on classic DTN products and on the News and Analysis Menu of DTN’s Professional and Producer products. DTN Top Stories is also on the home page and news home page of online.dtn.com. Subscribers of MyDTN.com should check out the US Ag Policy, US Farm Bill and DTN Ag News sections on their News Homepage.

If you have questions for DTN Washington Insider, please email edit@dtn.com