CBO Today Releases Annual Budget and Economic Outlook

January 31, 2012 12:28 AM
 

via a special arrangement with Informa Economics, Inc.

Obama bumps his FY 2013 budget requests to Feb. 13


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


The Congressional Budget Office (CBO) today will release its annual budget and economic outlook and the projections will be reviewed closely by lawmakers, including farm-state legislators because of the role they will play in an updated farm bill spending baseline.

President Obama has deferred his Fiscal Year 2013 budget request by a week, until Feb. 13.

The CBO document will also be reviewed relative to automatic spending cuts (sequestration) that unless changed would take effect in Jan. 2013 as lawmakers must come up with $1.2 trillion in reduced spending, half from defense and half from non-defense spending. Those cuts were required when the special joint committee created by August’s debt limit law did not produce at least $1.2 trillion in savings over a decade. The cuts are expected to reduce appropriations for the fiscal year that begins Oct. 1 by around 9 percent across the board.

President Obama is expected to include an alternative to the automatic cuts in his budget request, which will "include a number of familiar policies" that the president has long supported to constrain the federal debt, an Obama administration official said. "As the administration has said for months, we still expect Congress to do its job and prevent the need for the sequester," the official said.

Meanwhile, House Republicans are likely to unveil their ideas in their FY 2013 budget resolution in a few months. The GOP budget is widely expected to show significant savings without allowing the sequester to take effect, especially in defense programs.

Regarding farm bill timing and developments, besides the CBO document, a coming House budget resolution, likely finalized in April but perhaps in May, could include specific farm bill spending cut language. That means House farm-state lawmakers will not know until after the budget resolution how much spending they will need to cut over the next decade and whether or not that level will be at or higher than the $23 billion cuts that embodied the farm bill draft that Ag panel leaders wanted as part of the Super Committee process that failed late last year.

The timing of the farm bill is still murky. While most observers think the omnibus farm bill will not be completed until 2013, others still predict a 2012 timeline, perhaps in a post-election lame-duck session of Congress.

The House wants the Senate Agriculture Committee to go first relative to a farm bill markup and that will very likely be the case. If the Senate Ag panel can markup a bill by the Memorial Day recess, the House should then know the details of the new budget resolution and likely how much spending must be reduced via the farm bill process. If so, for the farm bill to be finalized in 2012, the House Ag Committee would have to finalize its markup vehicle by the July 4 recess. If that occurs, floor action and a resulting conference would have to occur and that is where and when the process could become bogged down – and why some observers think the end zone may not be reached until after the Nov. 6 elections in a lame-duck session of Congress.

Another argument some observers cite as favoring a 2012 farm bill completion date is that key farm bill provisions expire at the end of September and thus a farm bill extension of some sort would have to be voted on. That process may not be as simple as some think because farm bill reformers are itching to offer their amendments, especially in the House. But if a full-fledged farm bill debate would come at that time, some say, why not try hard to complete the farm bill yet this calendar year.

If the Senate cannot finalize its Ag Committee markup and bogs down, then the farm bill timeline moves to 2013, with new players in Congress, and perhaps Republican control of that chamber. If so, the Senate Ag Committee would have a new leader and this could add months to the farm bill timeline.

Congress will very likely engage in a post-election lame-duck session to deal with the sequester — which by law will kick in Jan. 2 — and with a host of expiring tax cuts.


 

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close