Farm bill fight could sow division in GOP
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.”
Congress passed the last omnibus farm bill in 2008 — the 10th in a series of roughly five-year plans dating to 1965. The last “Republican revolution” in Congress in the mid-1990s sparked a drive to fundamentally rewrite the federal system, with a “Freedom to Farm” law designed to wean farmers off government subsidies and price supports.
But much of the reform was rolled back in the 2002 and 2008 farm bills. The $288 billion bill in 2008 increased farm-subsidy payments even in a time of record profits for U.S. growers.
The upcoming farm debate could very well prove a flash point within the expanded GOP caucus. An Associated Press survey late last year found that the families of a number of prominent GOP members, including outspoken conservative Rep. Michele Bachmann of Minnesota and such high-profile freshman as South Dakota Rep. Kristi Noem and Tennessee’s Rep. Stephen Fincher, have received federal crop-subsidy payments in the past.
A survey by the Center for Responsive Politics found that agriculture and agribusiness lobbies have historically favored Republicans in political donations, giving 62 percent of their contributions to GOP candidates in the 2007-2008 cycle.
But the list of House Republicans who voted against the 2008 farm bill includes new Speaker John A. Boehner, new Majority Leader Eric Cantor of Virginia, new House Majority Whip Kevin McCarthy of California and new Ways and Means Committee Chairman Paul D. Ryan of Wisconsin. Sen. John McCain of Arizona, the GOP’s presidential standard-bearer that year, also opposed the bill.
Mr. Boehner criticized the measure at the time as a prime example of misguided Washington spending.
“The farm bill has often been abused by politicians as a slush fund for bizarre earmarks and wasteful spending projects, and the latest version … is no different,” Mr. Boehner, then the GOP minority leader, said at the time.
The authorization of the new farm bill will also be led by a new team of lawmakers in both houses of Congress. Senate Agriculture Committee Chairman Blanche Lincoln of Arkansas, the No. 1 recipient of agriculture lobby contributions in the 2009-2010 cycle according to the Center for Responsive Politics, lost in November and her gavel now goes to fellow Democratic Sen. Debbie Stabenow of Michigan.
Mr. Lucas takes over from Democratic Rep. Collin C. Peterson of Minnesota, but the turnover is even more extensive. Some 13 Democratic congressmen who sat on the panel either lost in November or did not seek re-election. Fewer than a quarter of the House Agriculture Committee’s members this year have worked on more than one farm bill reauthorization battle.
Another issue on the farm agenda is whether Washington will continue support for the production of ethanol fuel. President Obama extended tax credits for ethanol and biodiesel on Dec. 17 when he signed into law the $858 billion compromise tax legislation Congress passed during the lame-duck session.
However, the future of cellulosic ethanol — made from corn cobs and other crop waste — largely depends on tax credits and grants up for reauthorization in the next farm bill.
One of the biggest supporter of ethanol among Republicans is Iowa Sen. Charles E. Grassley, who argues it is key to ending U.S. dependency on foreign oil.
Mr. Grassley, ranking Republican on the Senate Finance Committee, succeeded in keeping the tax credits and a tariff on ethanol in the recent tax bill. However, he has sounded less optimistic about such support for the fledgling industry beyond 2011.
“For next year, we’re all kind of committed to taking a new approach and the phasing out of the tax credits,” he told Agriculture News, a trade publication. He said he would expect the credits for the “maturing industry” to be phased out over the next five to 10 years.
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