Re-authorization of the upcoming 2012 Farm Bill is an important piece of legislation that impacts multiple constituencies. We have dedicated a multi-part series of articles to keep you informed and to provide some professional insights. The articles will entail some background on the Farm Bill, considerations unique to the Farm Bill and the impact of it.
Will the Farm Bill be re-authorized?
The Farm Bill will be reauthorized by its expiration date in September 2012, because…
- Budget reconciliation will force it to happen (perhaps even before its expiration),
- Budget reconciliation should be completed in tandem with farm policy provisions as those involved in the multi-faceted systems of food and agriculture should be leading to make necessary changes to reach budget targets, and
- We do not want to revert back to permanent law, the agricultural Act of 1949, that installed marketing quotas, acreage allotments and based commodity prices on parity.
Given the current budget environment, the 2012 Farm Bill will be written under budget reconciliation. Foreshadowing the difficult times ahead, discussions on the next Farm Bill have been underway for at least six months as out-going House Agriculture Committee Chairman Collin Peterson (D-MN) smartly decided to get an early jump on the conversations even with some programs of the 2008 bill not fully implemented. The multiple and difficult decisions ahead will likely take some time especially among a corps of leaders with diverse opinions on farm policy (more on this later) and new Members who will have a steep and quick learning curve to overcome.
When the 2012 Farm Bill is reauthorized Senator Kent Conrad, who just made his selection on Friday to remain as chairman of the U.S. Senate Budget Committee, and incoming House Budget Committee Chairman Paul Ryan (R-WI) are going to be two main driving forces of the process. For years the Congressional Budget Office (CBO) has been using tax and spending policies currently in statute to forecast their 10-year budget estimates that Congress uses when crafting legislation. The Office of Management and Budget (OMB) forecast’s on the basis that all the President’s policies are adopted. Now that the American public has awakened to the budget crisis facing the U.S. this methodology may come under intense scrutiny and call for better, more realistic, tax and spending forecasts.
The March 2010 Congressional Budget Office baseline projects both mandatory and discretionary spending for the federal government over next ten years at $43 trillion. Programs under the jurisdiction of the House Agriculture Committee total $924 billion, or 2.15 percent of total government spending.
Of the total $924 billion, 75 percent or $693 billion is directed toward nutrition programs. The Senate Agriculture Committee’s jurisdiction (unlike the House) includes child nutrition programs. This adds $204 billion to their budget.
According to more recent information from CBO their estimates for FY2010-FY2012 and actual expenditures for FY2008-FY2009 indicate that five-year spending on most major farm bill programs will likely be below their estimates developed in 2007. The opposite is true for spending under domestic food assistance programs that will be much greater than previously estimated. For instance CBO estimated spending for the Supplemental Nutrition Assistance Program or SNAP (food stamps) over the five-year period is significantly higher than originally projected ($188.9 billion estimated in 2008, compared to the more current estimate of $314.9 billion). CBO noted this reflects additional spending because of provisions in the American Recovery and Reinvestment Act (ARRA), higher food costs, and increasing program participation rates due to the recession.
Many pundits are already throwing around possible reduction numbers for the agriculture authorizing committees. One thing you can bet on is that the number will most likely be above the $6.9 billion achieved in 2006 budget reconciliation. The annual average for agriculture under previous budget reconciliations is $1.9 billion (occurring in 2006, 1995, 1993, 1990, 1989 and 1987).
Next article: Considerations Unique to the Farm Bill…
Tim Cansler is the Founder and Chief Strategist for Cansler Consulting, a lobbying a firm in Washington D.C. To subscribe to this blog via a news reader or email, please click here or for more information on the Farm Bill and other government items that may impact your organization, please take a look at http://www.CanslerConsulting.com.)