The White House and congressional leaders decided to exclude mandatory spending from the first phase of budget cuts under the $2.4-trillion-deficit-reduction legislation signed into law earlier this summer. Farm program dodged a bullet during the first phase of cuts, but may not be so lucky during the second phase. Earlier proposals cut farm bill spending between $11 and $48 billion.
A 12-member, bipartisan "super committee" has been created under the debt and deficit compromise to find $1.5 trillion in savings by Thanksgiving. Mandatory farm bill programs may be considered for cuts by this committee. The committee is made up of six senators and six representatives.
Max Baucus of Montana, who has strong agricultural influence and is the Senate Finance Committee Chairman, made the final cut. The bipartisan committee has its work cut out for them, with many starkly partisan members named. However, members such as Sen. Rob Portman, R-Ohio, may use his old playbook from his time in the George W. Bush Office of Management and Budget and U.S. Trade Representative's top negotiator to help broker a deal.
House Agriculture Committee ranking member Collin Peterson, D, Minn., said in an interview that House Speaker John Boehner, R, Ohio, has assured him that he and House Agriculture Chairman Frank Lucas, R, Okla., will have input into the final deal and that the super committee will go to the committees to craft whatever they end up telling each committee will need to meet in terms of budget cuts.
"The question is who's going to decide how much each part of the budget gets cut. And that's not clear at all how that works," Peterson said.
The Senate and House ag committees have the deadline of Oct. 14 to submit their ideas for farm bill spending reductions to the super committee, however, the super committee will ultimately decide how much funding to allocate for the 2012 Farm Bill, and may also decide on the actual policy.
The recommendations made by the Agriculture Committees to the Joint Committee could be accompanied by legislative language to implement them, and there is speculation that this language could very well become the new farm bill.
In a Senate farm bill hearing at the end of August, Senate Agriculture Committee members recognized that agriculture will be targeted in efforts to reach $1.2 trillion in deficit reduction. The House passed a $48 billion reduction in production agriculture's baseline, and since the Senate did not have the votes to pass that ambitious of a cut, Senate Agriculture Committee Chairman Debbie Stabenow called it a "short-term victory" but cuts would be needed.
"Bottom line, I think it's clear that we in agriculture must make some tough decisions or somebody else is going to make them," Stabenow said.
The Joint Committee proposal/legislation must be approved by the 12 member Committee by Nov. 23.
The other aspect of the deal is that if this committee is not successful, then there's an automatic sequestration to meet the $1.5 trillion number. If the Joint Committee process failed to enact any savings at all, then the full $1.2 trillion would be recovered via this expanded sequester process.
The sequester would hit defense and non-defense spending in equal dollar amounts. The non-defense category is comprised primarily of non-defense discretionary, a limited amount of Medicare and some mandatory spending. To the extent that the Joint Committee succeeds in enacting any savings, these would reduce – or entirely obviate – the sequester.
Now, in that budget control act that they're using to run that sequestration, if it comes to that, there are a number of programs that are exempt from the sequestration. Peterson said one of them is food stamps and another would be the Conservation Reserve Program (CRP).
"It looks to me like sequestration, for agriculture, is probably the best outcome," Peterson said. "From what I know, a four or five percent sequestration would be in the range of $5 to $6 billion in our jurisdiction, which is much lower than anything that's been talked about."
An overview from the American Soybean Association said, "as a practical matter, if the full amount of the sequester were to be triggered, it would force a debate on what spending cuts could replace amounts being proposed to be sequestered. This debate would occur annually for the next nine years and keep the focus on the issue of spending well past the next election."
Process & Timeline of the Joint Committee
45 calendar days after bill passes (around Sept. 20): First Joint Commission meeting.
Oct. 14, 2011: Each Senate & House committee may send Joint Committee recommendations for changes to reduce deficit by at least $1.5 trillion.
Nov. 23, 2011: Joint Commission votes on: Report containing a detailed statement of the findings, conclusions, and recommendations and the estimate of CBO; Proposed legislative language.
Dec. 2, 2011: If approved, the Joint Committee submits the report and legislative language to the President, the Vice President, and the House/Senate; Next legislative day - Joint Committee's legislative language is introduced in Senate and the House.
Dec. 9, 2011: Any House and Senate Committee to which the Joint Committee language is referred to must report it to the House and Senate without amendment. If Committees fail to report by this day, it will be automatically discharged to the House and Senate. In the Senate, the motion to proceed is not debatable. Consideration and debate are limited to 30 hours. No amendments are in order.
Not later than Dec. 23, 2011: Vote on Joint Committee bill in both House and Senate.
Jan. 31, 2012: joint Committee terminates.