House Ag Panel Urges No Significant Ag Programs Spending Cuts

The House Agriculture Committee is urging House Budget Committee Chairman Ryan (R-WI) not to include significant spending cuts to agriculture programs in the FY12 budget, citing projected crop-insurance savings and past multi-year reductions in other areas.

The agriculture panel met on March 15 and approved a “views and estimates letter” to Chairman Ryan which makes the point that agriculture already has made a significant contribution to deficit reduction. (see Committee news release with link to the letter)  The letter cites as contributions to lower spending the Agriculture Department’s projected $6 billion in savings over 10 years from limits on administrative and operating costs for crop insurance; and $7.5 billion in reductions to mandatory spending on conservation, rural development, trade, research and energy programs from fiscal years ’03-10. The committee said it will spend most of ’11 setting program and funding priorities for new farm legislation to replace the current farm law that expires in ’12. The letter also includes arguments to counter the administration’s proposal to cut nearly $5 billion a year in direct payments.

Chairman Ryan’s response is unknown but during the debate on the current farm law he supported amendments, which ultimately failed, that would have tightened income eligibility limits and reduced direct payments.

Agriculture Committee Chairman Lucas (R-OK) has consistently rebutted calls for significant changes to direct payments or other safety net programs.

“While agriculture and its related industries constitute 4.6 percent of U.S. gross domestic product, the farm safety net now constitutes less than one-quarter of 1 percent of the federal budget and roughly 13 percent of USDA’s budget,” the committee noted in its letter. “In closing, some may argue that the current agriculture economy and farm prices are strong and therefore now would be a good time to cut our agriculture policies even further — but this conclusion ignores lessons from history. The agriculture economy is highly cyclical.”

The committee offered the Supplemental Nutrition Assistance Program (SNAP) as a possible candidate for spending reductions. The panel said it might not continue the boost in monthly benefits for SNAP participants when they expire on Nov. 1, ’13. SNAP, which accounts for nearly three-quarters of the Agriculture Department’s budget, got an across-the-board increase in monthly benefits under the ’09 stimulus bill. The temporary increase was slated to end in FY18, but Congress already has tapped $14.4 billion of that increase to aid states with Medicaid, to help school districts avoid teacher layoffs and to reauthorize and expand federal child-nutrition programs. As a result, the SNAP benefit increases will expire earlier than originally scheduled.