The anti-spending crusade of Capitol Hill’s resurgent Republicans could find itself with a tough row to hoe down on the farm.
Republicans now controlling the House have wasted no time advertising their determination to rein in federal spending, cutting their own legislative budget on the second day of the 112th Congress. But the dozens of new GOP lawmakers — many hailing from rural districts — could face a more difficult choice considering cuts in the successor to the current five-year, $288 billion farm bill that expires just weeks before the 2012 elections.
Economists, farming lobbies and policy analysts predict that cuts to the bill’s nutrition programs, such as food stamps, will be largely spared during this prolonged economic downturn, despite an annual price tag of $89 billion. The more likely target is the remaining 25 percent of the bill’s budget, which includes $5 billion in direct, annual subsidies to farmers who grow favored commodities such as corn, wheat and peanuts.
Producers of nearly two dozen crops are covered when “countercyclical payments” tied to market prices are included, and the nation’s farm-subsidy programs have long been a prime target of budget hawks.
“The main bull’s-eye is on the $5 billion in direct commodity payments,” Joe Outlaw, an economist and co-director of Texas A&M University’s Agricultural and Food Policy Center, said during a conference last month in Texas.
Analysts and lawmakers say the debates on Capitol Hill next year and beyond will focus on moving farmers from those direct payments to revenue-insurance programs, a transition the Obama administration backs.
But Rep. Frank D. Lucas, who will play a key role in the debate as the new chairman of the House Agriculture Committee, strongly supports the current payments, which he considers vital to the livelihoods of farmers and ranchers.
Mr. Lucas, Oklahoma Republican, told the Oklahoma Farm Report in a recent interview that he is open to debates about moving away from the Agriculture Department payments, but maintained that such payments are the best way to aid farmers while not running afoul of World Trade Organization rules on foreign trade.
“Direct payments are the most compliant, the least trade distorting,” he said.
Mr. Lucas also said he plans to write the bill in early summer 2012 and deliver it to Mr. Obama by late July — just months before the presidential election.
“It’s going to be a very tough, tight budget year,” he said. “The focus on the whole will be reducing the deficit [and] living within our means. Agriculture is not exempt from that. … Everything is on the table.”
But pressure to reduce overall spending could mean cuts to the bill’s two other price- and income-support programs — marketing loans and special subsidies for dairy farms and sugar producers.
Another option is for lawmakers to let dozens of individual farm-bill programs simply expire after 2012, a move that would bring in roughly $9.8 billion in savings.
“If we are going to have any of these programs, which include the disaster program in the next bill, there will have to be cuts to other programs to provide the funding,” said Texas A&M’s Mr. Outlaw, whose comments reverberated through the U.S. farming community.
“All signs point to less of a safety net,” he added. “There’s no way I can put a positive spin on what’s coming out of Washington.”