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‘Austere’ budgets likely to dominate congressional agenda

NEW ORLEANS – National Cotton Council leaders are bracing for a new round of attacks on farm program spending, specifically on cotton, as Congress prepares to deal with the president’s legislative priorities at the beginning of his second term.

President Bush’s proposals for reforming Social Security are expected to dominate the congressional agenda for the next several months. But the need to pay for those and other administration priorities could dominate that of the cotton industry and other farm groups.

“Reform of Social Security, funding the war on terrorism and making expiring tax cuts permanent will be expensive,” said John Maguire, the council’s senior vice president for Washington Operations. “And the recent, tragic national disasters in Asia will require additional funding for U.S. international disaster assistance programs.

“If the president wants to fund his priorities and cut the budget deficit in half by 2009, the next few budget proposals will be austere,” said Maguire, speaking at the opening session of the Beltwide Cotton Conferences in New Orleans today.

While Maguire and other observers do not expect Congress to “rubber stamp” the president’s budget proposal, but they do believe the debate could generate pressure to change current farm law and will set the tone for the next farm bill debate, which is expected to begin later this year.

He said the cotton industry should be preparing for an administration budget – due to Congress on Feb. 7 – that prices a priority on funding for defense and tax reform and calls for strict controls on discretionary spending.

“The perception on the Hill – right or wrong – is that farmers are doing relatively well,” said Maguire. “Many in Congress believe that the 2002 farm bill was overly generous and is no longer necessary or sustainable.”

Unfortunately, the budget debate will occur at a time when program costs are increasing due to low prices and a bumper harvest.

“If the budget ultimately adopted by Congress requires reductions in future agricultural spending, some members of Congress will resurrect proposals to cut spending by lowering payment limitations, eliminating the three-entity rule and eliminating marketing loan redemptions with certificates,” according to Maguire.

“We should also be prepared for the spotlight to shine on cotton. The popular press will focus on the initial adverse ruling in the Brazil WTO case. The decision on the appeal is scheduled to be issued in March, about the same time Congress is seriously debating the budget.”

He said all groups with an interest in “farm programs, conservation, nutrition, risk management and trade will have to work together to ensure that agriculture is treated fairly in the new budget. Council leaders have already initiated efforts to reactivate coalitions which have been successful in the past.”

Those coalitions will be working to remind Congress that:

  • The cost of the current farm bill has been considerably less than projected and that agriculture is a miniscule part of the federal budget.
  • Consistent farm policy without major amendments has allowed farmers to make sound investments and marketing decisions. Consequently, farm income and the rural economy have improved.
  • U.S. negotiators at the WTO must “deal from a position of strength” to achieve a comprehensive agreement that works for U.S. agriculture.
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