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Federal budget, tax reform complicate efforts to pass a new farm bill

The future of a new farm bill is tied up in negotiations over a fiscal 2018 budget resolution that Republicans want to pass in order to enact one of their top priorities — tax reform.

Passage of a budget resolution allows Republicans to use the budget reconciliation process to move a tax bill that won't need Democratic votes to pass the Senate.

A group of House conservatives is demanding cuts in food stamps and other welfare programs to help offset the tax cuts. Multiple sources tell Agri-Pulse the deal will include a $10 billion cut in the Supplemental Nutrition Assistance Program over the next decade.

That would amount to $1 billion a year from a program that is projected to cost about $67 billion to $68 billion a year. It's a far smaller cut than many House conservatives have been demanding.

The chairman of the House Freedom Caucus, Mark Meadows, scoffs at the size of the proposed cut. "To suggest that $10 billion is a herculean effort on the behalf of the Ag Committee defies what we all know to be the facts," Meadows said recently.

House GOP leaders hope to move a fiscal 2018 budget agreement that aims to cut $10 billion by tightening work requirements on food stamp recipients, but House Agriculture Chairman Mike Conaway says he intends to "recycle" any such savings back into the program.

Budget Chairman Diane Black, R-Tenn., wants to advance the budget blueprint from the committee this week. But the measure, which has not been released, still faces resistance from some conservatives who want deeper cuts in food stamps and other welfare programs.

It's unlikely that the Senate would agree to a $10 billion cut in SNAP and may oppose any reduction in the program. But Black has been under heavy pressure from conservatives to include cuts in mandatory spending programs, including SNAP, totaling at least $200 billion.

Conaway, meanwhile, has been walking a political tightrope on the issue. He needed to agree to some kind of reduction in SNAP for the budget resolution to show that he was being cooperative. Conaway has strongly denied allegations by conservatives that he has refused to cut SNAP. At the same time, he had to resist a larger cut in the program or else risk alienating the urban lawmakers he will need later to pass a farm bill.

Conaway said he has assured fellow Republicans that his committee will tighten SNAP work requirements. But he also said recently that he intends to plow the savings back into the program to provide transitional incentives to low-income people who would otherwise abruptly lose their food stamps if they were to take a pay raise or get a job.

"I hope that is appealing to those who don't really want any cuts to food stamps," Conaway said.

But, as most farm organization leaders know, any cuts to food and nutrition spending in the farm bill will likely derail Democratic votes for a new farm bill. And without the ability to also bring conservative GOP members to the table, a new farm bill could once again stall in the House of Representatives.

Failure to pass a budget resolution would free up Conaway and Senate Agriculture Chairman Pat Roberts, R-Kan., to move a farm bill the old-fashioned way, through regular order. But it would force Republican leaders to do tax reform the same way, if they do it all. That would require getting enough Democratic support to get the 60 votes necessary to break a filibuster, a tall order given that Republicans want to slash corporate tax rates.

Recommendations already flowing

Work on a new farm bill is already underway with a series of hearings and listening sessions, but lawmakers say they could start writing a new bill later this fall or early in 2018.

The House budget resolution will do nothing to address another huge challenge for Conaway: Finding the money to address demands to expand support for cotton and dairy producers and to shore up the Agriculture Risk Coverage program.

The American Farm Bureau Federation already sent a list of recommendations to the House and Senate Agriculture committees for overhauling farm bill commodity programs.

The proposals include allowing farmers enrolled in the Agriculture Risk Coverage program to choose between having yields calculated on a simple 10-year average or a five-year Olympic average. The five-year Olympic average, which drops the high and low years, is now the only option.

In addition, the groups say Risk Management Agency records should become the primary source for yield data, and the American Farm Bureau Federation wants to raise Agricultural Risk Coverage reference prices by 5 percent for corn, soybeans, wheat, sorghum and minor crops.

The American Farm Bureau Federation's wish list also includes a series of changes to the Margin Protection Program for dairy producers. The recommendations include a 25 percent cut to premium rates for the first 4 million pounds of production history, and a corresponding 25 percent increase in premiums for production above that amount.

The Margin Protection Program recommendations also would alter the minimum and maximum coverage levels and increase the feed ration formula for all producers by 10 percent.

When it comes to cotton, the American Farm Bureau Federation supports making either or both cottonseed and cotton fiber eligible for commodity program support.

The American Farm Bureau Federation also has some proposals to address criticism that Conservation Reserve Program payments have become excessive in states such as Iowa. But the group doesn't support increasing the 24 million acre cap on CRP or creating a new "knock-off" program that would allow for short-term contracts.

The seven page letter outlining the proposals doesn't include cost estimates for the proposals.

Read all the recommendations here.

Editor's note: Philip Brasher contributed to this column

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