Wednesday, October 28, 2015

Cuts to crop insurance program threaten budget deal; budget still expected to pass

"Last-minute subsidy cuts to the crop insurance program" have led many Republican leaders to threaten to vote against former House Speaker John Boehner's two-year budget deal congressional leaders negotiated Monday with the White House, Lisa Mascaro reports for the Los Angeles Times. Many lawmakers "threatened to withhold their support for the package if those remained part of the deal because it would make it too expensive for farmers to insure their crops."

The budget deal "would cut $3 billion over 10 years by requiring the Agriculture Department to renegotiate its Standard Reinsurance Agreement (SRA) with the crop insurance companies and lower the cap on the rate of return on premium to 8.9 percent, from the current 14.5 percent," reports Agri-Pulse. "Since 2011, the industry’s rate of return has varied from a loss of 15 percent in fiscal 2012, a drought year, to a gain of 13 percent in fiscal 2014, according to USDA."

"Because the SRA must be renegotiated, the first savings from the cut wouldn’t kick in until fiscal 2018 and then would only amount to $36 million, according to the Congressional Budget Office," reports Agri-Pulse. "By 2021, the annual savings are estimated at $434 million."

Collin Peterson (D-N.D.), the chairmen of the House and Senate Agriculture committees and the ranking Democrat on House Agriculture, "said the proposal originated at the White House and that GOP leaders kept the committees completely in the dark until the last minute," reports Agri-Pulse. "Sources briefed on the talks said crop insurance, conservation and nutrition cuts were all discussed, but only cuts to crop insurance were accepted. The White House was equally tight-lipped. Even top officials at the Agriculture Department were unaware of the provision until late Monday, sources tell Agri-Pulse."

The budget does raise spending caps in fiscal 2016 and 2017, reports Agri-Pulse. "Food-safety advocates already are pressing appropriators to use the extra money to increase the Food and Drug Administration’s funding for implementing preventive measures required by the Food Safety Modernization Act. The National Sustainable Agriculture Coalition wants to restore cuts that appropriators proposed to the Environmental Quality Incentives Program and Conservation Stewardship Program." Agri-Pulse is subscription-only but offers a four-week free trial.

Senior GOP lawmakers "estimate that between 60 and 120 Republicans will vote for the package as is, leaving Democrats to supply the vast majority of votes," Jake Sherman and John Bresnahan report for Politco. "Aides in both parties expect the bill to pass, but the number of GOP defections is a notable rebuke to Boehner and other top Republicans." 

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