May 15 (Bloomberg) -- Democrats on the House Agriculture Committee failed in a bid to restore cuts in federal food-stamp spending as the panel debates a $940 billion bill reauthorizing U.S. Department of Agriculture programs.
The measure would cut $40 billion in the next decade by eliminating $20.5 billion for nutrition programs over that period including food stamps, or five times as much as proposed in a Senate Agriculture Committee plan approved yesterday. Food stamp spending was $78.4 billion in 2012. Farm subsidies and environmental programs would be cut in both versions, and crop insurance would increase $8.9 billion in the House version and $5 billion in the Senate plan.
"Farmers, ranchers and American taxpayers are counting on us to pass a farm bill," said House Agriculture Committee Chairman Frank Lucas, an Oklahoma Republican. "This committee will mark up a reform-minded bill that was developed with true bipartisanship."
The House farm-policy bill, like the Senate’s, includes $6.4 billion in mandatory budget cuts known as sequestration that took effect March 1. Crop subsidies benefiting buyers such as Archer-Daniels-Midland Co. and food stamps subsidizing purchases at Supervalu Inc. are targets for lawmakers seeking to trim the deficit.
The panel is scheduled to act later today after an afternoon break for a series of votes in the full House, Lucas said. Senate action on its bill may come next week, said Senator Debbie Stabenow, chairwoman of the chamber’s farm panel, and the House may vote as soon as next month, giving the parties time to negotiate a final package before current law expires on Sept. 30, said Representative Collin Peterson of Minnesota, the House committee’s top Democrat.
Lawmakers are seeking to pass a bill after failing to renew farm policy last year. The Senate passed legislation that included the first major reductions in farm aid since 1996. The measure died in the House, where Republican leaders wanted deeper cuts to food stamps. The current law, passed in 2008, was extended until September.
Funding for the Supplemental Nutrition Assistance Program, also known as food stamps, has again become the most divisive and emotional issue in debate. The committee defeated a bid by Representative Jim McGovern, a Massachusetts Democrat, to restore money cut from food stamps. The vote was 17-27.
The reductions "will make hunger worse in America, not any better," McGovern said during a debate in which members of both parties quoted Bible verses in arguing over the role of government in assisting the needy with food. "We shouldn’t be going down this path."
Food-stamp enrollments are outstripping the U.S. poverty rate and unemployment, said Representative Reid Ribble, a Wisconsin Republican. "This issue doesn’t divide by dollars, it divides by ideas of how best to fight poverty," he said. "SNAP dollars have gone up while unemployment has gone down."
A record 47.8 million people got food stamps in December, and enrollment in February, the most recent month available, slid to 47.6 million. The program paid $6.3 billion.
Unemployment, which soared to 10 percent in October 2009 during the financial crisis, was 7.5 percent in April, a four- year low, according to government statistics. About 2 million people would be dropped from food-stamps rolls under the House plan, according to a congressional estimate.
The House committee today also rejected an attempt to limit the revamp of dairy policies that would re-introduce supply management into the boom-and-bust milk market.
The Dairy Security Act, part of the committee’s draft, would subsidize insurance policies for producers to ease tight profit margins created by low milk prices and high feed costs. In return, farmers would agree to cut milk production once prices fall below a set limit.
A producer in the program who ignored the agreement would receive less in government payments. Money saved would then be used to buy dairy products for distribution to the poor -- another way to lower inventories.
Small dairy producers say subsidies are needed to stabilize their boom-and-bust business. Groups representing companies including Dean Foods Co. say the market distortions would harm trade and consumers. Representative Robert Goodlatte, a Virginia Republican and former chairman of the committee, offered an amendment stripping the supply-management provisions from the bill. The proposed dairy language would "penalize both consumers and dairy producers who want to expand their operations," Goodlatte said.
Representative Collin Peterson of Minnesota, the committee’s top Democrat who crafted the program, said his proposal would deal with price swings.
"We’ve got to understand that we have to deal with milk, and if we have an oversupply, what do we do?" he asked. "Volatility is in the worst interest of the dairy producer."
The amendment failed 20-26.
Both Senate and House committees plan to end a program that pays growers of corn, rice and other major crops regardless of market prices, and use some of the savings to insure revenues in less-profitable years.
The House and Senate proposals would each also expand crop insurance and introduce some form of "shallow loss" protection for farmers with revenue reductions not covered by indemnities. Spending on government-subsidized crop insurance sold by Wells Fargo & Co., Ace Ltd. and others has soared to records, galvanizing groups fighting for less farm aid.
Indemnities for last year’s Corn Belt drought, the worst since the 1930s, are at $17.1 billion so far, according to the government.
--Editors: Steve Geimann, Jon Morgan
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