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Budget-busting burgers: Beef, chicken supply could be casualties of Congress, Obama sequester fight
Food shortages may be one effect
If the spending sequesters happen, get ready for the great beef shortage of 2013.
The Obama administration said Thursday that the across-the-board cuts would mean furloughs for food safety inspectors, and if those inspectors aren't on the job, meat-processing plants can't open.
That means 2 billion pounds of beef and pork and potentially more than 3 billion pounds of poultry will never make it to the market, causing shortages and price spikes across the economy.
"This is going to adversely affect every consumer in America," said Sen. Mark L. Pryor, Arkansas Democrat.
With the automatic cuts looming March 1, the Obama administration is offering more specifics on what lower spending would mean, pointing to everything from fewer agents on the U.S.-Mexico border to cutting funding for special education in school districts around the country.
The sequesters, totaling $110 billion for the rest of this calendar year and nearly $1 trillion over the next decade, were set in place by the 2011 debt deal. President Obama got the authority to raise the federal borrowing limit by more than $2 trillion in exchange for cuts, spread out over 10 years, designed to hit domestic and defense spending.
Now, both parties are arguing over whether to cancel the cuts and, if so, what to replace them with.
On Thursday, Senate Democrats rolled out their offer: canceling this year's cuts and replacing them with smaller defense cuts, lower agriculture subsidies and a new minimum tax on millionaires, all spread out over 10 years.
"The Democratic proposal to replace sequestration is balanced, it's fair, it's good for middle-class families and the economy," said Senate Budget Committee Chairwoman Patty Murray, Washington Democrat.
Mr. Obama blessed the plan Thursday evening, saying through press secretary Jay Carney that Republicans now face a choice: "Do they protect investments in education, health care and national defense or do they continue to prioritize and protect tax loopholes that benefit the very few."
The tax increase would come in the form of the so-called Buffett rule, named for billionaire investor Warren Buffett, who suggested it. It would impose a minimum 30 percent tax rate on millionaires, who often end up paying lower percentages of their income in taxes than average Americans because much of their income is from investments, which are taxed at lower rates.
But Republicans said the plan can't clear the Senate, much less the GOP-controlled House. After agreeing to raise taxes as part of the "fiscal cliff" deal earlier this year, Republicans said they will not allow any more tax increases.
They pointed to plans House Republicans passed last year to replace the defense cuts with more domestic cuts.
Either way, action will have to wait until the end of this month. Congress is on vacation next week and won't return until Feb. 25 at the earliest — leaving just four days before the sequesters take effect.
The White House this month has been trying to ramp up the pressure on Republicans by pointing to areas where the cuts will hit.
On Thursday, Homeland Security Secretary Janet A. Napolitano said that the amount of work time lost because of furloughs this year would be equivalent to cutting 5,000 Border Patrol agents from a force of 21,370.
She also said airport screeners would be cut, and so would cargo inspectors at ports of entry — meaning longer lines and disrupted supply chains.
Danny Werfel, federal controller at the White House budget office, said the cuts would also mean most air traffic controllers will be furloughed one day per pay period for the rest of the year, which he said would mean flight delays.
The cuts will also affect government contractors, and should force those companies to send official notices to their employees warning of furloughs or potential layoffs under the Worker Adjustment and Retraining Notification Act.
But so far, the government has told companies not to bother sending the notices, arguing it's still too early to know what specific cuts will happen.
"A blanket notice is neither appropriate nor legally sufficient under the Warn Act," Jane Oates, assistant secretary for employment and training at the Labor Department, testified to Congress on Thursday.
The Obama administration has also told companies they will be reimbursed for legal costs they incur for failing to send out the notices.
Republicans blasted the policy.
"That's right: The Obama administration is telling employers to ignore the law and forcing taxpayers to pick up the tab," said Rep. Tim Walberg, Michigan Republican.
Amid the posturing, the cuts still loom.
One New Mexico school district that relies heavily on federal funds would lose about 30 percent of its budget, Education Secretary Arne Duncan testified Thursday.
Another effect would be the cuts to the Food Safety and Inspection Service, which is part of the Agriculture Department.
Under federal law, the service's inspectors must be present at meat processing plants. Because most of the service's budget is salaries for inspectors, furloughs will be required for the agency to meet its new lower budget — which means plants will have to close for 15 days because of the lack of inspectors.
Mr. Pryor said that means a loss of 3 billion pounds of beef and pork production, up to 3.3 billion pounds of poultry, and more than 200 million pounds of eggs.
By way of contrast, American companies produced 26.4 billion pounds of beef, 22.5 billion pounds of pork and 37.2 billion pounds of chicken in 2010, according to the meat industry.
Sen. Roy Blunt, Missouri Republican, asked why inspectors couldn't be spared and the cuts fall elsewhere within the Food Safety and Inspection Service — something the American Meat Institute has said should be possible. The institute argued that inspectors should be deemed essential employees, and therefore exempt from furloughs.
But Mr. Werfel said the law doesn't read that way in this case, and said the furloughs will have to happen.
"It becomes a math issue, ultimately," he said. "There is no way in which to find other sources of funds because 88 percent of the entire budget are those very people that need to be at those meat plants doing that inspection to keep them open."
• Tim Devaney contributed to this report.
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