White House Threatens to Veto House Farm Bill

June 17, 2013 01:44 PM

via a special arrangement with Informa Economics, Inc.

The stakes rise, as White House suggests tapping billions more in crop insurance cuts instead of food stamp slashing

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

The White House today threatened a veto of the House farm bill (HR 1947), citing the measure's $20.5 billion cut to the Supplemental Nutrition Assistance Program/food stamps and what the Obama administration sees as a lack of reforms to commodity subsidies and crop insurance – a major blow to some commodity groups that have been fighting among themselves over who gets what funding and at what levels.

The White House offered cutting crop insurance instead of food stamps. "The bill would reduce access to food assistance for struggling families and their children, does not contain sufficient commodity and crop insurance reforms, and does not provide funding for renewable energy, which is an important source of jobs and economic growth in rural communities across the country," the White House said in its Statement of Administration Policy. Link

"If the president were presented with HR 1947, his senior advisers would recommend that he veto the bill," it added.

"The bill makes unacceptable deep cuts in SNAP, which could increase hunger among millions of Americans who are struggling to make ends meet, including families with children and senior citizens," the White House added,


The statement notes that the bill would increase crop insurance spending by nearly $9 billion over 10 years rather than cutting the program by $11.7 billion as President Obama proposed – a direct shot at both Democratic and Republican farm-state lawmakers who repeatedly said the one thing they heard from farmers was to "don't touch crop insurance. But what the SAP does not stay is that over half of the crop insurance increased funding is for cotton’s new program (STAX) to fix the WTO issue relative to Brazil and the Senate’s plus-ups to crop insurance were masked by the interaction with the ARC program. 


The White House also took a swipe at the House bill's Price Loss/target price Coverage (PLC) program, saying the bill would increase reference prices by 45 percent. That is no doubt pleasing to corn and soybean lobbyists who always preferred the more Midwest-oriented Senate bill with the favored shallow loss/Revenue Loss Coverage (RLC/ARC) scheme and have taken a direct shot at the House target price levels.


"The administration looks forward to working with the Congress to achieve crop insurance and commodity program savings," the statement said, "While at the same time strengthening the farm safety net in times of need and supporting the next generation of farmers."


Corn and soybean growers/lobbyist may not like what a farm bill conference has to do. With the White House looking around for more cuts to lessen the reduction in food stamp funding, the focus in a coming conference session, assuming the House can clear a farm bill version, may well include looking at the Senate's ARC/shallow loss program that opponents say is a thinly veiled attempt to get back some of the eliminated direct payments, rather than constructing a farmer safety net for multiple years of very low prices.



The SAP made it clear the White House endorses making conservation compliance a requirement for crop insurance. The Senate bill (S 954) contains that provision, and an amendment has been filed in the House to provide that linkage as well, but the votes may not be in the House for that proposal.


The SAP also faults the bill for failing to reform international food aid programs. Obama has proposed changing food aid so that it is no longer focused on purchasing US farm goods. But opponents of the proposal say it is costly, reduces the amount of aid made available and actually has the perverse effect of driving poor Third World farmers out of business.


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






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