What is in this article?:
- Agriculture and the 2011, 2012 budgets (updated)
- The Ryan plan
- How will 2011 continuing resolution affect agriculture?
- House debate on Republicans' 2012 budget begins in earnest.
(Update: On Friday, April 15, House Republicans passed a budget framework claimed to reduce government spending some $5.8 trillion over the next decade. The legislation passed 235 to 193 – four Republicans voted with every Democrat against.
Among opponents, the loudest objection involves the Republican plan to reform Medicare, moving to a system providing eligible citizens with vouchers to defray the cost of buying health insurance in the private sector.
While the solidarity of House Republicans may shift the budget debate towards those eager to chop the size of government, the House plan won’t find an easy time in the Senate. Close behind the Friday House vote, Nevada Sen. Harry Reid, majority leader, said the legislation would not pass the Senate.)
On Thursday, the House began debate on a Republican-backed budget proposal for 2012. On another budgetary front, the legislative body passed the continuing resolution agreed to last week in order to avoid a government shutdown in fiscal year (FY) 2011.
For more, see Congress wrestles with budget.
With few hard numbers to consider, agriculture economists say the 2012 budget proposal of Wisconsin Rep. Paul Ryan, Chairman of the House Budget Committee, is difficult to pin down. Even so, agriculture groups have largely criticized the plan as unfair.
On Thursday morning, Delta Farm Press spoke with Pat Westhoff, director of the University of Missouri-based Food and Agricultural Policy Research Institute (FAPRI) about the contentious budget process. FAPRI maintains models of U.S. agricultural commodities used by Congress while crafting policy and legislation. Among Westhoff’s comments:
As an economist, what is the first thing you look for in budgets or proposals?
“I’m just trying to understand the set of things that have been proposed. The continuing resolution covers the entire USDA budget – the entire federal budget, for that matter. There is any number of issues at play every time we do this type of a bill.”
In the FY 2011 continuing resolution, “there are cuts made at a variety of USDA agencies. Some of those will have larger direct effects on agricultural producers than others.
“The trick is trying to understand what these things mean in practice. Which of these cuts will have a direct and meaningful effect on programs that farmers normally rely upon? Which cuts will have less of an impact?
For more, see list of cuts in the FY 2011 continuing resolution.
“There are a couple of examples to make the point. One of the things listed from the House Appropriations Committee was a $350 million reduction in the dairy subsidy. That’s really referring to one-time-only funding provided last year for dairy producers. There was no intention of repeating (that funding) this year. But because of the way the comparisons are made, that is shown as a $350 million reduction. But it wasn’t going to happen anyway. That’s an example of something that can be misinterpreted given the way the table is set up.
“On the other hand, other changes are very real and could have a major impact on farmers and others.”
Any of those jump out at you?
“One would affect producers participating in conservation programs. There are reductions in a variety of those – Wetland Reserve Program, Conservation Stewardship, EQIP.
“There have been differences of opinion in how to calculate the changes that have actually occurred. Some cuts shown on the House Appropriations Committee tables don’t appear to be overly large. That’s a function of the point of comparison – when compared to last year, the cuts are small, but compared to what the farm bill said was supposed to happen this year, the cuts are much larger.
“If you’re someone reliant on the FSA loan program, there will be a reduction in amount of loans the FSA can make.
“And there are changes to areas from research, to rural development to WIC (Women Infant and Children).”
Do the cuts in the FY 2011 continuing resolution have to be made between now and October (when the fiscal year ends)?
“The cuts are in terms of what is called ‘budget authority.’ USDA and other agencies have to have budget authority to sign contracts or otherwise commit to spending money. In many cases, though, the actual checks may not be written for some time – perhaps not until 2012 or beyond.”