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Ag Subsidies Targeted as Fiscal Cliff Looms

December 6, 2012
By: Boyce Thompson, AgWeb.com Editorial Director
Lucas 008
Rep. Frank Lucas (R-Ok.) speaks at Farm Journal Forum 2012  

Savings in competing farm bills tempt lawmakers as deadline looms for fiscal cliff action

As much as $35 billion in federal farm support is under scrutiny as lawmakers on both sides of the aisle look for ways to selectively chop spending and raise tax revenue before automatic actions take place on New Year's Eve.

Rep. Frank Lucas (R-Okla.), chairman of the House Agriculture Committee, made it clear at today's newsmaker session at the Farm Journal Forum conference in Washington, D.C., that federal agricultural programs are on the table as Congress and the White House look for ways to sidestep the fiscal cliff.

Lucas highlighted the difficulty of changing so many federal programs in so little time--three weeks. "It's a daunting process," he said, "but it can be done." At the same time, Lucas cautioned against moving too fast, given the complicated nature of federal agricultural programs.

He suggested that Congress may need a transition plan for ag programs while new regulations are created by the USDA. It doesn't make sense to eliminate one safety net, he said, without having another in place.

Speaking later in the program, Sen. Debbie Stabenow (D-Mich.) said she would oppose an extension of current agriculture programs, though she would be open to a transition plan to new programs.The chairwoman of the Senate Agriculture Committee emphasized the need for Congress to act on a farm bill before the end of the year. "What we need to do is get this done," she said.

If Congress and the White House fail to reach agreement on a deficit reduction package before the end of the year, $600 billion in automatic spending cuts and tax hikes will take place. The Congressional Budget Office has predicted that the automatic cuts may be draconian enough to send the economy into recession.

"If the powers that be--the White House and the Republican leadership in the House--can come to an agreement, we need to be ready, and there's no reason we can't be ready," Lucas said. The congressman envisions a budget reconciliation process, with congressional committees receiving targets for budget savings, with deadlines and perhaps even program requirements.

Lucas met with a bipartisan group of Senate and House leaders in the farm bill debate earlier in the week. The meeting included Stabenow (D-Mich.) and her ranking minority member, Sen. Pat Roberts (R-Kan.). Rep. Collin Peterson (D-Minn.), the ranking minority member of the House Agriculture Committee, was also part of the discussion.

The Obama deficit-reduction proposal announced last week specifically targets farm supports as part of a package of $250 billion in budget cuts. The GOP proposal, announced earlier this week by Speaker of the House John Boehner (R-Ohio), includes $300 billion in unspecified cuts in federal spending programs. Both sides seem eager to capitalize on the savings captured in the House and Senate farm bills.

The White House proposal reportedly contains $30 billion in cuts to direct payments, $7.5 billion in cuts to crop insurance over 10 years, and an additional $2 billion in cuts to conservation programs. Some of the savings would be used to pay for disaster relief. The proposal doesn't include cuts in food stamps.

The deficit-reduction package promoted by Boehner and signed by Republican leaders is modeled after the proposals of a 2011 commission on budget deficit reduction. The commission recommended $15 billion in agriculture cuts over 10 years. The cuts were to be made to direct payments and other farm subsidies, conservation programs and export promotion programs.

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