House Budget Republicans Nix Democratic Plan to Eliminate Direct Payments, One-Year Farm Bill Extension

June 27, 2012 09:43 AM

Via a special arrangement with Informa Economics, Inc.

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

Democratic move seen as part of election-year package designed to avoid sequester.

The House Budget Committee today defeated, 10-18, a plan pushed by Rep. Chris Van Hollen (D-Md.) that would have avoided $109 billion, Jan. 2, 2013, automatic spending cuts by eliminating direct payments to farmers, among other reductions. The Democratic pushed package also proposed a one-year extension of farm programs.

The Budget panel then backed, 30-0 a bill (HR 5872) that would require the Obama administration's Office of Management and Budget (OMB) to report to Congress on the impact of across-the-board cuts relative to defense and non-defense programs.

As amended, the House measure would require the report within 30 days, rather than by July 9, which was the date called for in the original version of the legislation. The Senate last week added similar language to its farm bill (S 3240) requiring the Defense secretary, the Office of Management and Budget (OMB) and the president to report on the effects of sequester on defense and domestic programs, with short deadlines so lawmakers would have time to consider the implications. Under the Senate's plan, the Pentagon's report would be due on Aug. 15, the OMB report would be due within 30 days of enactment, and the president would be required to issue his report within 60 days.

As clear evidence the Democratic alternative was purely election-year politics, the package, besides cutting farm subsidies, would have eliminated subsidies for major oil and gas companies, included a minimum tax on millionaires and an overhaul of the federal flood insurance program.

Republicans said the development will bolster the case for a House-passed bill that would replace the across-the-board automatic cuts with $242 billion in more tailored trims over ten years.

"Under the Budget Control Act, the Office of Management and Budget will make arbitrary across-the-board spending cuts, resulting in a 10 percent cut to defense spending and an 8 percent cut to non-defense discretionary spending," Chairman Paul Ryan (R-Wis.) said. "That's why House Republicans passed legislation last month that would replace these crippling cuts with common-sense reforms and spending reductions."

Democrats said the information will help them make the case for a "balanced" deficit solution that includes tax increases on the wealthy and the elimination of special interest tax breaks. They argue that the GOP replacement unfairly targets anti-poverty programs.

Ryan said that the Van Hollen replacement would have been be an $85 billion tax increase on top of trillions in tax increases slated to take effect at the end of this year. "I guess the economy is doing well and we can start raising taxes. Is that the presumption?" Ryan asked, jumping on an admission by Rep. Tim Ryan (D-Ohio) that he had voted to extend the Bush era tax rates in 2010 because the economy was weak.

Ryan also said Van Hollen's amendment would violate House rules requiring that tax legislation originate from the Ways and Means Committee and that all measures offset new spending.

Perspective: The development comes as a growing number of sources are now wondering whether House GOP leaders will allow any House farm bill coming out of the Agriculture Committee following a July 11 markup actual floor time before Nov. 6 elections. Some conservative members and groups have labeled the nearly $1 trillion Senate-passed farm bill a "food welfare bill."


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


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