Dem sequester bill contains billions in new farm spending

Senate Democrats' $110 billion sequester replacement bill contains $3.5 billion in new farm program spending. 

The bill, designed to replace economically damaging across-the-board cuts set to begin March 1, contains $54 billion in new taxes on millionaires. 

The new spending was inserted during a negotiation between Senate leadership and Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.).

In exchange, Stabenow said she signed off on a cut of $27.5 billion in farm subsidies known as direct payments. 

By eliminating direct payments, the bill will likely complicate writing and passing a five-year farm bill. That bill would more likely be scored as adding to the deficit once savings from direct payments are removed from the equation. 

“I support moving forward with eliminating direct payments,” Stabenow told reporters. “At the same time, I have written this and negotiated this to make sure we are providing disaster assistance to our farmers and ranchers which do need it for 2013.”

The bill extends disaster assistance for 2012 and 2013 for agriculture sectors left out of a "fiscal cliff" deal passed in early January, and funds energy, conservation and specialty crop programs that were not funded in the short-term farm bill extension included in the fiscal-cliff deal.

Stabenow said that Senate leaders made clear no more cuts to agriculture spending will be required going forward for the purposes of deficit reduction. 

The $27.5 billion represents a ceiling on savings going forward and allows the Agriculture Committee to move forward with writing a five-year farm bill to replace the stopgap measure passed on New Year’s Day.

Last year, the Senate passed a farm bill that saved $23 billion by eliminating direct payments. It used some of the savings to create new types of crop insurance for farmers and also contained cuts to food stamps.

The House Agriculture Committee passed a similar bill with some $12 billion more in savings from food stamp benefit cuts.

Stabenow said the farm bill debate will look at these as a matter of policy, but Senate Democrats will no longer — should their sequester bill become law — pressure the committee to contribute more to reducing the deficit. 

The Michigan senator told reporters she also succeeded in getting provisions of her Bring Jobs Home Act in the Democratic replacement bill. The provisions stop companies from deducting relocation expenses when they move operations out of the United States.

“The choice facing Congress is to allow drastically irresponsible cuts to hit every part of our budget and cost 750,000 jobs, or to make smart, targeted cuts. Billions in direct payment subsidies are paid out even in good times and for crops farmers aren’t even growing. That’s why an overwhelming bipartisan majority in the Senate voted to eliminate direct payments last year while strengthening support for farmers when they have a loss,” Stabenow said in a statement.