President Barack Obama’s plan for deficit reduction would cut $33 billion from farm programs, taking a highly disproportionate amount of federal spending reductions from one of its smallest line items and perhaps stymieing Congress’ efforts to write a workable 2012 Farm Bill.
Obama unveiled the plan Monday, a week after releasing the $447 billion jobs bill it is meant to complement.
The agriculture proposals outlined included:
- eliminating the direct payment.
- reducing federal government assistance to crop insurance companies and farmers using crop insurance – reductions that would come on top of $12 billion in cuts to that important program since 2008.
- reducing conservation spending by $2 billion over 10 years.
- extending until 2016 the SURE disaster assistance program, which has no money allocated to it after this fiscal year.
It is unclear how seriously the proposal will be taken on Capitol Hill, particularly since it included tax cuts Republicans almost immediately labeled as “class warfare”.
Still, the proposal fell at the very high end of estimated potential cuts to safety net programs through the debt-reduction process. Previous numbers floated have ranged from $10-11 billion in the President’s debt commission report and the Gang of Six discussions to $30 billion or more in debt talks led by Vice President Joe Biden and the House-passed budget resolution.
In addition to dramatic cuts in spending in farm safety net areas, the proposal would also make serious changes to farm policy most agriculture associations and farmers think should only be made by the Congressional agriculture committees.
Leaders of those Committees have generally supported that view and have made statements supporting agriculture stakeholders’ contentions that any cuts to the farm safety net should be proportionate to cuts in other areas of federal spending.
On that test, the Obama proposal also fails. Longtime agriculture policy reporter Jim Wiesemeyer published analysis Tuesday showing that if assumed savings from tax policy changes and the wars in Afghanistan and Iraq are excluded, total cuts in the Obama proposal hit around $600 billion, of which more than $33 billion are from cuts to direct payments, crop insurance and conservation programs.
Wiesemeyer said that means 5.5 percent of all government domestic savings would actually come from agriculture programs – compared to the less than ½ of 1 percent of federal spending devoted to the programs in the first place.
The President’s full proposal is available at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/jointcommitteereport.pdf.