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Published January 26, 2010, 10:53 AM

Peterson: Obama budget will have little effect on local farm programs

A three-year freeze in spending on many domestic programs, which President Barack Obama is expected to call for when he delivers his first State of the Union message to Congress on Wednesday, likely would have little effect on commodity subsidies and other major farm programs, Rep. Collin Peterson, D-Minn., said.

By: Chuck Haga, Grand Forks Herald

A three-year freeze in spending on many domestic programs, which President Barack Obama is expected to call for when he delivers his first State of the Union message to Congress tonight, likely would have little effect on commodity subsidies and other major farm programs, Rep. Collin Peterson, D-Minn., said Tuesday.

“We expected this,” said Peterson, who as chairman of the House Agriculture Committee plays a key role in writing the nation’s five-year farm bill.

“At one time, they were talking about taking a 5 percent cut” at the U.S. Department of Agriculture, he said.

“A freeze is better than that.”

The president’s proposed freeze is expected to be a major feature of the budget he’ll send to Congress early next week and is meant to demonstrate his commitment to cutting deficits, the New York Times reported.

“It only affects discretionary spending,” Peterson said, explaining why news of the possible freeze didn’t overly alarm him. “The farm bill is mandatory spending, driven by a formula, not by appropriation. What’s put in the law drives what the spending is, and direct payments, for example, are pretty much fixed.

“He (Obama) can’t directly affect the mandatory spending in the farm bill, and the appropriators (in the administration) can’t change the underlying formulas I put into the law.”

Conservation, nutrition affected?

Both the Obama and George W. Bush administrations tried in the past four years to make changes in some mandatory USDA programs, such as EQIP and other conservation programs, Peterson said.

“What they do is go in and cap a program,” he said. “They haven’t tried that with commodity programs. But they’ve tried in EQIP, a conservation program where a farm can, for example, (get money) for putting in water control structures to reduce erosion.

“We say from the committee that this isn’t fair; they’re legislating. They have put these caps out, but they’ve never been able to make them stick.

“If there’s any exposure here with the freeze, it’s probably in conservation programs” and possibly nutrition, rural development and others, “but not commodities.”

At nutrition center, watch and wait

At USDA’s Grand Forks Human Nutrition Research Center, Director Gerald Combs Jr. said it was too early to know how a freeze on discretionary spending might affect the center.

“I appreciate the economic situation the country is in,” he said, but “I’m always hopeful” about the lab’s future. “We’re doing worthwhile stuff here. We’ve had relatively flat budgets in the eight years I’ve been here, but we’ve been able to do well with that.”

Peterson said that he favors action to rein in federal spending and get deficits under control.

However, noting that “the big entitlement programs, such as Social Security and Medicare, are driven by formulas,” and the proposed freeze would exempt the Homeland Security and Defense departments “where a lot of the spending is,” he isn’t optimistic a freeze would accomplish much.

“I don’t think anyone should be persuaded that this is going to solve the problem,” he said.

Getting on track

Rep. Earl Pomeroy, D-N.D., said he believes the freeze makes sense.

“I think it’s good,” he said. “We have got to bring ourselves quickly toward a path of fiscal discipline that reins in these budget deficits.”

He said such an action “will place a lot of pressure on non-defense discretionary spending, Programs depending on funding from the portion of the budget where a freeze has been imposed will have to justify themselves under more scrutiny than before.”

A freeze along the lines of that the president is contemplating “is estimated to save $250 billion over the next 10 years,” he said, “and that would be a meaningful contribution toward getting us on track toward a responsible budget.”

Pomeroy said it was fortunate that the Grand Forks Human Nutrition Research Center was restored to the president’s budget last year “because the competition for federal dollars among programs funded by this part of the budget will be intense.”

Reach Haga at (701) 780-1102; (800) 477-6572, ext. 102; or send e-mail to chaga@gfherald.com.

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