By Erik Wasson - 05/10/13 03:00 PM EDT
The chairman of the House Agriculture Committee unveiled a new farm bill Friday that he said would reduce spending by $39.7 billion over the next decade compared to existing legislation.
The deeper deficit cuts endorsed by Chairman Frank Lucas (R-Okla.) are sure to please conservatives and may help get the bill through the full House.
Overall the bill, crafted in consultation with Ranking Member Collin Peterson (D-Minn.) is “vastly identical” to the bill that passed the Agriculture Committee last year, according to a senior aide.
But it reduces spending more than the earlier bill, which House leaders never let come to the floor. It would have cut $35 billion from existing spending.
Much of the bite comes from food stamp and other nutrition programs. They would be reduced by $20.5 billion, compared to $16 billion in last year’s bill.
This is a much bigger cut than what is offered in the Senate Agriculture Committee’s bill released Thursday. It cut $4 billion from food stamp spending and $23 billion overall.
Lucas’s bill finds $13.8 billion in savings from farm programs. Another $6.9 billion in cuts come from environmental programs.
The fact that more cuts are being made to food stamp programs than to producers is likely to spur opposition from Democrats. Anticipating that fight, aides argued Friday that in percentage terms, the cuts to farm programs are deeper than those to food stamps.
One aide said that farm programs take a 10 percent cut whereas the much larger food stamp program is cut only 2.5 percent.
The new bill is also able to claim $6 billion in savings from the $1.2 trillion automatic spending cuts that began March 1.
The savings is counted against direct payments and other programs that the bill eliminates anyway, but aides denied this is an accounting gimmick.
The main difference on food stamps is that way the bill deals with eligibility under the Low Income Heating Assistance Program. Currently, individuals receiving just $1 in heating assistance automatically qualify for food stamps.
Critics say this has led overly generous administrators to give people fake heating assistance to make them eligible for food stamps that they would otherwise not be able to receive. Last year’s House farm bill said you had to get at least $10 a month in heating assistance to get food stamps. This year you need to get at least $20 in assistance, which will allow fewer people to qualify for food stamps.
The farm bill does not contain the much broader restrictions on eligibility that some House Republicans have sought, virtually guaranteeing a floor fight when the full House takes up the bill, as GOP leaders have promised, this summer. The bill does not impose a work requirement on food stamp recipients, for example.
“Congress needs to have a full vetting of that before putting that into the bill,” an aide said.
As with last year’s bill, the new legislation makes major changes to the traditional farm safety net. It eliminates existing direct payments, countercyclical payments, average crop revenue election and supplemental revenue assistance payments.
Getting rid of these programs helps cut $28 billion from the budget in 10 years — but in the judgment of the committee it leaves farmers too vulnerable. The committee then spends about $14 billion increasing the generosity of crop insurance and livestock disaster aid and establishing a choice between new revenue loss coverage and price loss coverage protection.
As it did last year, the bill changes reference prices for crops in a way that would make it easier for farmers to get government subsidies. Soy and corn producers would get about a 37 percent increase from the existing 2008 farm bill, while peanut growers would get just an 8 percent bump, an aide said.
The choice of price protection is key to winning support from southern lawmakers since rice and peanut growers say the revenue loss model does not work for them.
There is a major change in the bill related to cotton as the committee seeks to end a long dispute in the World Trade Organization with Brazil. The WTO found that traditional price supports for cotton were distorting world trade and injuring Brazilian growers.
The bill creates a new Stacked Income Protection “STAX” insurance program for cotton that does not contain a price trigger and the bill makes cotton ineligible for all other new support payments. Growers have to purchase STAX coverage using premiums support from the government and when county-wide losses exceed 10 percent, growers can receive a payments.
“We want to solve the Brazil cotton case … we have removed the reference price in STAX to mirror what the Senate did,” an aide explained. Cotton growers are to transition to STAX by 2016 and are given a reduced direct payment in 2014 and 2015 under the bill.
The bill, as expected, ignores an attempt by the Obama administration to change the way international food aid is provided. The administration wants to buy food from local developing country farmers to deliver to the needy, but the House, like the Senate draft, keeps the current system of buying U.S. food and shipping it abroad in place.
The House ignores the Senate’s attempt to put a $750,000 adjusted gross income cap on farm subsidies and also does not contain a provision to transition egg cages to larger cages favored by animal rights groups.