Ag proposal includes plan to cut direct payments
WASHINGTON -- The battle over a bill to raise the debt ceiling still was fluid in the House and the Senate July 29, but Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., on July 29 claimed an initial victory in the budget proposal by S...
WASHINGTON -- The battle over a bill to raise the debt ceiling still was fluid in the House and the Senate July 29, but Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., on July 29 claimed an initial victory in the budget proposal by Senate Majority Leader Harry Reid., D-Nev., to cut farm spending by $11 billion over 10 years.
Stabenow said she convinced Reid to hold the farm cuts in his proposal to $11 billion when others had argued for a cut as large as $30 billion and the House had proposed $48 billion in cuts.
"I made a strong case to the leader that the farm budget had already taken cuts," Stabenow said. "I was able to keep that at $11 billion. I want it to go down, not up."
She added that she thinks the debate on farm spending should be "between $11 billion and zero," noting that the Simpson-Bowles presidential commission had called for a $10 billion cut in agriculture and that the Gang of Six senators' proposal called for the $11 billion cut. Senate Budget Committee Chairman Kent Conrad, D-N.D., is one of the leaders of the Gang of Six.
Senate Majority Leader's plan
The Reid plan would cut the direct payments that crop farmers get whether prices are high or low from 2012 to 2021.
The direct payments now are made on a base of 85 percent of a farmer's historical acreage, and the Congressional Budget Office has estimated that the cost of those payments would be $49 billion over 10 years.
The Reid plan would accomplish an $11 billion cut over 10 years by reducing the portion of acreage to calculate direct payments to 59 percent. The proposal would cut $2 billion from the crop year 2012 payments, which would show up as budget savings in 2013 and $1 billion in each year, according to a CBO chart.
According to the Oklahoma Farm Report, House Agriculture Committee Chairman Frank Lucas, R-Okla., said July 27 that he thinks farmers would have a better chance of getting a full direct payment under the Boehner plan, but he also acknowledged that there would be cuts to agriculture under the Boehner plan.
In a letter to Reid July 27, CBO estimated that this provision would reduce net spending by $11.1 billion over the next decade, including its effects on other agricultural income support programs.
The Boehner budget calls for massive cuts in government spending, but is silent on how much would be cut from agriculture. Stabenow said she thinks the $48 billion cut in the fiscal year 2012 budget passed by the House would be "devastating" to agriculture, and previously has said she does not support another provision in that bill to turn the food stamp program into a capped block grant to the states with a budget savings of $127 billion over 10 years.
Stabenow said she does not think the Boehner bill can pass the Senate because it would require a second vote to raise the debt ceiling before the 2012 election.
"Our country cannot stay stuck in the ditch," Stabenow said, adding that the need for a second vote is likely to cause U.S. credit ratings to go down and lead to other problems in the financial markets. The Boehner bill "is an irresponsible option," she said.