Pro Farmer Extra
- From the Editors of Pro Farmer newsletter
Nov. 30, 2012
Wiesemeyer's Take on Fiscal Cliff and Farm Bill
We don't normally share from "Members-only" content, but Pro Farmer Washington consultant Jim Wiesemeyer's latest take on the fiscal cliff situation and how it might impact the farm bill is a must-read for everybody.
The up to $35 billion in new farm bill savings was included as budget offsets in a fiscal cliff package proposal offered to Republicans by President Barack Obama, but GOP leaders quickly nixed the proposal, labeling it as “unbalanced and unreasonable."
The White House proposal, revealed to GOP leaders by Treasury Secretary Timothy Geithner in meetings held Thursday, includes the nearly $1.6 trillion in additional tax revenue over 10 years that the White House earlier endorsed largely via allowing an increase in upper-bracket income tax rates.
The White House plan would also postpone for a year the automatic cuts in discretionary spending scheduled to begin next year, use the farm bill savings as a partial budget offset, trim $400 billion from federal health care programs, renew extended unemployment compensation and extend a “patch” for the alternative minimum tax as well as tax incentives for businesses.
Importantly, GOP leaders were critical of a White House proposal to put in place a new mechanism that would increase the government’s borrowing limit without congressional approval.
Sen. Jeff Sessions (R-Ala.), ranking member on the Budget Committee, dismissed the proposal as “a distraction that allows the White House to continue to run out the clock so it can have maximal leverage to force through a bad deal in the last minutes before midnight.”
Obama today will be in suburban Philadelphia for a campaign-style rally to sell his plan for extending tax cuts for middle-class Americans.
Democrats continue to push for raising taxes next year on capital gains and dividends, the investment income that forms an important share of the earnings for the wealthiest taxpayers. Increasing the top tax rate on long-term capital gains and dividends from 15 percent to 20 percent would raise $100 billion to $120 billion over 10 years, according to White House estimates.
Meanwhile, some Republicans are reportedly requiring relief spending for Hurricane Sandy be matched by cuts elsewhere in the federal budget. Lawmakers are waiting on a supplemental proposal for the storm damage from the White House that state and local officials say could be about $80 billion.
But Senate Majority Leader Harry Reid (D-Nev.) said he does not expect to have a confrontation with GOP members over aid. “I’ve been told that the Republicans in the House agree that this is something that need not be paid for, and I hope that, in fact, is the case because if there were ever an act of God, an emergency, this is it.”
Comments: Agriculture committee leaders in the House and Senate met Thursday with USDA Sec Tom Vilsack at USDA to discuss various new farm bill issues.
"We're going to do everything we can to work together to get a farm bill done," said Senate Ag Chairwoman Debbie Stabenow (D-Mich.) after the 40-minute meeting. Stabenow said she was open to attaching a new farm bill to any legislation passed to avert fiscal cliff impacts, but to do that the Senate and House would have to come to agreement on thorny issues such as food stamps and farm subsidy levels.
Vilsack said his goal for the meeting was to "get all four folks who are critical to this process in a room at the same time to talk to each other and we accomplished that."
While the participants did not detail what was discussed at the USDA-held meeting, a likely discussion topic was any need to extend some 2008 Farm Bill provisions and if so, which ones and for how long.
Meanwhile, whenever the final verdict on the new farm bill comes, sources say it will come down to three possibilities:
(1) 5-year farm bill as part of a big fiscal cliff package;
(2) 1-year modified extension with no cuts and reconciliation-style process in 2013 to get cuts;
(3) 1-year modified extension with cuts and part of larger deal in 2013.
Follow Pro Farmer Editor Chip Flory on Twitter: @ChipFlory
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