Monday, June 17, 2013

Midwest-South conflict among Republicans could derail Farm Bill; Obama issues strategic veto threat

UPDATE, 6:55 p.m.: "The White House warned Monday that it would veto the House farm bill as it now stands and signaled strongly that the fastest path to some compromise this summer would be by taking savings from crop insurance to offset Republican-backed cuts from food stamps, Rogers reports. "The most severe of the food-stamp savings would come from re-imposing tighter income limits and an outdated asset test that could force more than two million beneficiaries off the rolls. The estimated savings are $11.5 billion over the next 10 years, and the administration made note that its own crop insurance reforms could save an almost equal sum, $11.7 billion. . . . The administration’s statement seemed designed to serve two purposes: put down a veto marker that will give liberal Democrats some comfort but at the same time try to keep the process moving into conference with the Senate."

As the House version of the Farm Bill heads to the floor Tuesday, corn and soybean lobbies are "backing a Midwest floor challenge to the new price-loss program crafted by the House Agriculture Committee, which is already struggling to win what’s expected to be a close vote on final passage," David Rogers reports for Politico. "Adding salt to the wound was Friday’s release of a paid-for academic paper commissioned by the Environmental Working Group but also rooted in the Midwest and highly critical of the same price-loss program — most important to Southern producers," especially of rice and peanuts.

Rogers writes that the current state of play illustrates "a destructive South-Midwest divide among Republicans and the outsize impact of a small stable of academics hired to punch holes in the current system.  Corn and soybeans are plainly hoping to increase their leverage going into conference with the Senate," which has passed its version. "But in doing so, they could make it harder for [Agriculture Committee Chairman Frank] Lucas to get there in the first place."

The Midwest-oriented amendment would change how target prices are set "and what acreage will be used to calculate payments if markets collapse," Rogers reports. "Left out of the corn-and-beans letter is any mention of the fact that the same two commodities stand to gain richly from a far more expensive 'shallow-loss' subsidy program in the Senate bill. With much of agriculture holding hands just to get across the House floor, the hardball tactics are risky. . . . If the Farm Bill collapses, it’s very unlikely that Congress will again approve a broad extension of current law as it did last winter.
Crop insurance and nutrition programs would survive because of separate authorizations. But there’s broad consensus that commodity programs could be lost given the appetite for spending reductions."

House passage of the bill is in doubt partly because "More than half of the current representatives have never cast a vote on a farm bill," Agri-Pulse reportsAmendments must be filed by Monday, so the Rules Committee can set terms for debate. Wednesday and Thursday, look for "a series of knockdown fights," Rogers writes.

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