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White House blasts bill eliminating Brazil WTO payments

House Appropriations Committee has passed FY 2012 funding bill that provides $7 billion less than Obama administration requested for agriculture and related agencies. The bill, H.R. 2112, also eliminates funding for the U.S.-Brazil WTO Agreement negotiated by the administration to avoid $800 million in trade countermeasures. The Obama administration has issued a statement of policy opposing those and other cuts in nutrition, research and food safety programs in the new fiscal year beginning Oct. 1.

The Obama White House has issued a statement of administration policy criticizing House Appropriations Committee-approved legislation that would eliminate payments being made as part of a settlement of Brazil’s WTO case against the U.S. cotton program.

The $147 million in payments are part of $2.7 billion in cuts proposed by the Appropriations Committee to the Agriculture, Rural Development, Food and Drug Administration and Related Agencies fiscal year 2012 budget.

The administration is concerned by a provision in section 743 that would eliminate payments that are being made as part of the mutually agreed settlement of a World Trade Organization (WTO) dispute regarding U.S. domestic cotton supports and the export credit guarantee program,” the statement of policy said.

Trade countermeasures

“The framework serves as a basis to avoid trade-related countermeasures by Brazil that are authorized by the WTO until the enactment of successor legislation to the current farm bill. Under the agreement, the United States is committed to fund technical assistance and capacity-building support for Brazil’s cotton sector.”

The statement cites seven areas where the administration says the House Appropriations Committee bill provides “insufficient funding” in a way that undermines government functions and reduces investments that are key to economic growth and job creation.

Among those are funding for research programs, which it says are needed to help solve food production, safety, quality, energy and environmental problems. “By reducing funding for the Agricultural Research Service to its lowest level since 2004 as well as inadequately funding the nation’s competitive grant program, the bill will hinder USDA’s ability to develop solutions to address current as well as impending critical national and international challenges.”

Nutrition, food safety cuts

Other areas of reduced funding which concern the administration include:

  • Nutrition programs that are critical to the health of nutritionally at-risk women, infants, children, and elderly adults.
  • The USDA Food Safety and Inspection Service (FSIS) which will significantly hamper USDA’s ability to inspect food processing plants and prevent food borne illnesses and disease such as E. coli and Salmonella from contaminating America’s food supply.
  • The Healthy Food Financing Initiative, a key initiative to combat childhood obesity.
  • The Food and Drug Administration where theresulting staff reductions will severely limit the FDA’s ability to protect the public’s health, assure the American consumer that food and medical products are safe, and improve Americans’ access to safe and less costly generic drugs and biologics.
  • The Commodity Futures Trading Commission where reduced funding would cut staffing levels and seriously undermine CFTC’s ability to protect investors and consumers by effectively policing the futures and swaps marketplace through its current market oversight and enforcement functions.
  • International Food Aid where funding reductions would severely limit the United States’ ability to provide food assistance in response to emergencies and disasters around the world.


“Moreover, the funding level would significantly curtail the timely, effective implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, including new CFTC responsibilities to regulate the $300 trillion swaps derivatives market,” the SAP said.

GIPSA funding slashed

It said the administration also opposes the inclusion of section 721 of the bill, which effectively prevents USDA’s Grain Inspection, Packers and Stockyards Administration from finalizing a rule on conduct that would violate the Packers and Stockyards Act of 1921.

Under the Brazil-U.S. WTO agreement, the United States is committed to fund technical assistance and capacity-building support for Brazil’s cotton sector, the administration noted. The bill’s provision preempts the resolution process and would open the door to retaliation negatively affecting U.S. exports and interests.

The statement of administration policy did not comment on another provision of H.R. 2112 that would limit farm program payments to individuals with adjusted gross incomes of $250,000 a year. Individuals currently are allowed to have up to $750,000 of farm income before such payments are limited.

The administration did say it strongly opposes inclusion of ideological and political provisions that are “beyond the scope of funding legislation.”

In other budget news, Rep. Collin C. Peterson, D-Minn., the House Agriculture Committee’s ranking member, sent a letter to the House Committee on Rules, urging the Chairman to allow members to strike provisions of H.R. 2112 that would re-write the 2008 Farm Bill.

“As you know, the Committee on Rules will consider crafting the rule governing debate on H.R. 2112, legislation making appropriations for the U.S. Department of Agriculture (USDA), Food and Drug Administration and Related Agencies,” the letter said.

Assault on Ag Committee

“This bill contains unprecedented assaults upon the jurisdiction of the U.S. House Committee on Agriculture, and I ask that the Rules Committee protect the rights of the members of the Agriculture Committee to challenge these attacks upon our jurisdiction.

During consideration of H.R. 2112, Peterson said, the Appropriations Committee adopted amendments that would effectively amend the 2008 farm bill.

“As these amendments constitute legislation on an appropriations bill, they fail to comply with clause 2 of rule XXI of the Rules of the U.S. House of Representatives. Consequently, they should be struck out by a point of order.”

Peterson acknowledged the members of the Appropriations and Agriculture Committees have policy differences regard how farm safety net programs should be structured. “But those differences should be hashed out in the legislative process for the 2012 farm bill.”

In the past, the Rules Committee has waived all points of order against provisions that did not comply with clause 2 of rule XXI.

H.R. 2112 also contains large reductions in many of the programs authorized and funded through the 2008 farm law. Appropriators have used these CHanges In Mandatory Program Spending (CHIMPS) for years in order to fund other priorities.

“However, H.R. 2112 contains an unprecedented $1.845 billion in CHIMPS. Many of these CHIMPS are significant cuts to conservation programs, which will leave farmers and ranchers without the necessary tools to meet burdensome regulatory requirements,” said Peterson. “The last time CHIMPS approached these levels was in FY06 when they reached $1.666 billion, which was even higher than CHIMPS enacted in FY11, $1.502 billion.”

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