Washington Report prepared by McAllister & Quinn LLC
Washington Report Headlines
· Farm Bill Passes House, Set for the Senate
Federal Employee News
Farm Bill Passes House, Set for the Senate
The U.S. House passed and sent the Senate a much-delayed bill to set agricultural policy for five years, as a coalition of rural Republicans and urban Democrats overcame objections about farm subsidies and food-stamp cuts. The Republican-led House voted 251-166 for the farm bill, which would cost $956.4 billion over a decade. Senators predicted passage in their chamber.
The plan, which the Congressional Budget Office estimates will cut spending by $16.6 billion over 10 years from current levels, reflects the clout of rural and urban allies who kept farm subsidies and nutrition programs together. Supporters said the bipartisan bill showed differences can be bridged. President Barack Obama was pleased by progress on the bill and would sign into law the version passed by the House.
The legislation governing U.S. Department of Agriculture programs emerged after more than two years of debate, with some lawmakers seeking to use the measure to curb spending and end subsidy programs. Senate Majority Leader Harry Reid yesterday predicted the plan, a compromise between competing versions passed by the two chambers, will pass the Senate, which could take up the measure as soon as this week.
The bill governs farm subsidies, which encourages planting of soybeans, cotton and other crops by lowering costs for commodity processors including Bunge Ltd.
The legislation would cut food-stamp spending by $8.6 billion over 10 years, though additions to other programs bring nutrition-aid cuts down to $8 billion -- one-fifth of the $40 billion sought by Republicans and fought by Democrats and food retailers. The annual reduction would equal about 1 percent of the program’s total spending of a record $79.6 billion in the year that ended Sept. 30. Total savings would be $23 billion over 10 years after automatic cuts in all federal spending tied to an earlier budget deal are included.
The conference report eliminated the 15-year term limit on guaranteed loans and the accompanying graduation requirements, and exempt micro loans from direct term limits.
Crop-growers facing loss of $50 billion in subsidies retained about two-thirds of it through other aid. Conservation initiatives would lose $6 billion, largely through consolidation of existing programs. Crop insurers that paid out $17 billion after the severe 2012 were largely unscathed.
The bill ends the possibility, for at least five years, of U.S. farm policies reverting to a 1949 law that would potentially double milk prices.
The House and Senate conference committee have posted the Farm Bill agreement worked out over the weekend; the text is available at http://www.ag.senate.gov/issues/farm-bill and other sites. The House is expected to vote on this Bill on Wednesday and it is expected to pass by a small margin. The Senate may vote as early as late this week or early next week, and it is projected to pass. It is anticipated that the President will sign it into law. As we know from experience, this is what is EXPECTED, but we will know soon enough the fate of this agreement.
Some of the highlights of the Credit Title are as follows:
1) Elimination of guaranteed loan term limits;
2) “median” reverts back to “average” acreage in the beginning farmer ownership limitations;
3) Embedded entities, definitional changes got fixed;
4) Micro loans are exempt from direct term limits;
5) Requirement for an annual report on the impact of term limits on direct operating loans. This is bigger than it first appears and we hope that objective evidence from the report will lead to eventual removal of term limits
More information will follow as we study the details and the bill moves closer to passage. The NACS legislative committee felt it was important to communicate this information to our members.
NACS Legislative Committee
McAllister & Quinn
Washington Report Headlines
· Omnibus Bill Headed to the White House for Signature
· USDA Appropriations for FY2014
· Farm Bill Gaining Momentum
Federal Employee News
Omnibus Bill Headed to the White House for Signature
The omnibus spending package providing $1.012 trillion in discretionary federal funds is headed to President Barack Obama's desk for signature after being passed by the Senate.
The 12-bill package (H.R. 3547) is expected to be signed by the president and be law before a short stopgap government funding bill expires Jan. 18, thereby heading off any threat of another government shutdown.
Obama's signature would bring to a late close the fiscal year 2014 appropriations process, which was dominated by the threat of deep sequester cuts and government shutdowns. It clears the way for appropriators to now begin work on the 2015 spending bills next month.
The Senate passed the huge appropriations package on a vote of 72-26 after a day's debate, where lawmakers of both parties lined up to praise the deal negotiated during the past month by Senate Appropriations Committee Chairwoman Barbara Mikulski (D-Md.) and House Appropriations Committee Chairman Hal Rogers (R-Ky.). While the 1,500-page spending bill was unveiled only a few days earlier, Senate critics of the appropriations process kept their comments to a minimum amid urgings from leaders of both parties to expedite passage of the measure.
The Senate vote was almost as lopsided as the 359-67 House vote the previous day, with lawmakers of both parties backing the bipartisan spending plan.
As in the House the previous day, the Senate vote reflected lawmakers' strong desire to avoid any risk of a replay of October's government shutdown. On final passage, all 55 Democrats and 17 Republicans voted in favor of the measure. Another 26 Republicans opposed the bill and two did not vote.
The vote on final passage was preceded by a similar 72-26 vote on a motion to invoke cloture and thereby head off any filibuster threat against the bill.
The block of Republicans who supported the omnibus was bigger than the usual group of appropriators who typically back their committee's work product. But as expected the most conservative members of the Republican caucus withheld their support.
The bill on its way to Obama's desk reflects the plan Mikulski and Rogers preconferenced during the month since Congress passed the bipartisan budget agreement (H.J. Res. 59). Besides allocating the budget deal's $1.012 trillion allocation among the 12 regular appropriations bills, the omnibus updates policy directives for departments and agencies.
In addition to that, the bill provides $91.9 billion for overseas war costs, $5.6 billion for disaster relief, and $925 million for other initiatives not covered by the discretionary cap. An additional $749.4 billion in mandatory spending brings the price tag of the bill to almost $1.9 trillion.
Appropriators of both parties said they were extremely pleased that negotiators managed to finalize all 12 bills and avoid having to provide straight-line continuing resolutions for any of the programs under their jurisdiction.
USDA Appropriations for FY2014
Farm, nutrition and food programs would receive about $145.7 billion in total spending under the Agriculture-FDA portion of the $1.1 trillion omnibus spending agreement for fiscal 2014.
The agreement would provide about $3.5 billion more in total spending for the programs than the president requested.
The measure would provide $20.9 billion in fiscal 2014 discretionary funding, which would be $350 million more than the fiscal 2013 enacted level.
The agreement would provide $29.9 billion for agricultural programs in fiscal 2014, $138 million less than requested. The funding includes $6.8 billion in discretionary money.
The Farm Service Agency, which oversees farm assistance programs, would receive $1.6 billion, about $5 million more than the administration’s request. The measure also would authorize $5.5 billion in loans under the Agricultural Credit Insurance Fund Program Account for programs such as farm ownership, farm operating, conservation and emergency loans.
The measure would provide “such sums as necessary” for the Federal Crop Insurance Corporation Fund and Commodity Credit Corporation two mandatory accounts. The Appropriations Committees estimate that the Federal Crop Insurance Fund would receive about $9.5 billion in direct spending. In addition to insuring farmers against crop losses, the fund subsidizes insurance companies that provide crop coverage, such as Wells Fargo & Co., ACE Ltd and QBE Insurance Group Ltd.
The Commodity Credit Corporation, which funds mandatory programs that support farm income and prices, would receive $12.5 billion to reimburse losses related to farm commodity support.
Agricultural research programs would receive $2.6 billion and rural development programs would receive $2.4 billion, of which $1.1 billion would go to the Agriculture Department’s Rental Assistance Program. The agreement would also authorize $35.9 billion in loans for programs such as the Rural Housing Insurance Fund, Rural Business-Cooperative Service and electrification and telecommunications loans.
The Food Safety and Inspection Service would receive $1 billion, about $2 million more than the administration’s request.
A policy provision in the bill would prohibit the Grain Inspection, Packers and Stockyards Administration (GIPSA) from implementing or further establishing rules related to livestock and poultry industry compliance, which industries said have overreached beyond the law’s intent.
Domestic food programs would receive $108.6 billion under the agreement, including $6.8 billion in discretionary spending. Domestic food programs make up the largest appropriation under Agriculture-FDA programs.
The measure would provide $82.2 billion in direct spending for the Supplemental Nutrition Assistance Program, formerly called food stamps, which is about $3.8 billion more than the administration’s request.
Funding levels for SNAP are being debated under the farm bill, which sets multiyear authorizations of farm policy. The program is funded through the appropriations process even though it is considered mandatory spending.
Child nutrition programs would receive $19.3 billion in direct spending, of which $5.6 billion would go toward school lunch programs.
The Supplemental Nutrition Program for Women, Infants and Children (WIC) would receive $6.7 billion in discretionary spending. The agreement would also require oversight and monitoring of the program, such as directing the USDA to help rein in food costs through oversight of vendors.
The agreement would provide a total of $4.4 billion in budgetary resources to the Food and Drug Administration. It would include $2.6 billion in discretionary funds, $3 million more than requested, and allow the agency to spend $1.8 billion in user fees collected from industries. The measure also would make available to the FDA some user fees that were deposited in fiscal 2013 but withheld from agency’s use because of sequestration. That would provide an additional $85 million to the agency.
All authorized user fee programs are included in the agreement, which doesn’t provide collection authority for new proposed user fees, such as for food import or cosmetic activities.
The Commodity Futures Trading Commission would receive $215 million for fiscal 2014, $100 million less than requested.
The agency, which regulates commodity futures and options markets, is involved in the implementation of the Dodd-Frank financial regulatory overhaul.
To accommodate a difference in House and Senate subcommittee jurisdictions, the CFTC is funded under Agriculture-FDA appropriations measures in even-numbered years and Financial Services appropriations measures in odd-numbered years.
The agreement would provide $1.5 billion for Food for Peace grants to private organizations to provide food assistance abroad. The administration had requested moving the jurisdiction of the program to the U.S. Agency for International Development, which wasn’t included. The agreement wouldn’t require a study on the administration’s proposed food aid reforms, such as focusing on local procurement instead of shipping U.S. products overseas, which was sought in the House bill.
The Animal and Plant Health Inspection Service would receive $824.9 million under the measure, about $24 million more than requested. The measure would also provide an additional $20 million for fiscal 2014 to combat a citrus plant disease called citrus greening.
The agreement would prohibit using federal money for horse meat inspection, which would effectively prevent horses from being slaughtered for human consumption. Funding for this purpose hasn’t been allowed since 2007.
Farm Bill Gaining Momentum
Negotiations in Congress on the long overdue U.S. farm bill could be completed this week after progress was stalled by a disagreement over a dairy price support program, a senator said on Wednesday.
The five-year farm bill, which covers issues from domestic crop subsidies to exports and global food aid, is being held up chiefly by a dispute between Republican House Speaker John Boehner and Democratic Representative Collin Peterson of Minnesota over a program that would cut milk production if prices decline below a certain level.
The dairy issue appears to be the last major hurdle to a deal on the farm bill.
Peterson, top Democrat on the House Agriculture Committee and one of the top four negotiators on the farm bill, has championed the Dairy Security Act, a new program that offers producers profit-margin insurance as long as they agree to cut milk output if prices fall below a set level.
Lawmakers are more than a year late in replacing the 2008 farm law, which expired in the autumn of 2012 but was extended until September 30, 2013.
If no bill is passed, the Agriculture Department may be forced to peg dairy subsidies to an underlying "permanent" 1949 law that would double the price of milk in grocery stores - an event often referred to as the dairy cliff.
Negotiators have reportedly agreed to about $8 billion in cuts over 10 years to the food stamp program, formally known as the Supplemental Nutrition Assistance Program, which gives about 47 million low-income Americans money to pay for food.
In its version of the farm bill passed in June, the Democratic-run Senate offered $4.5 billion in cuts to food stamps over 10 years The House proposed $39 billion in cuts.
Federal Employee News
1% Pay Raise for Blue Collar Feds in Spending Bill
Congressional negotiators have agreed on a $1.1 trillion spending package that would avert a new government shutdown, set federal agency funding levels for fiscal 2014 and give a 1 percent pay raise to more than 200,000 blue-collar federal workers at military depots and other facilities.
Those “wage-grade” employees were not covered by the 1 percent increase that President Obama ordered for workers paid under the General Schedule, starting this month. After a three-year freeze on federal pay scales, unions had lobbied hard to include the wage-grade workforce through legislation.
For affected employees, the increase would be retroactive to the beginning of fiscal 2014 in October, or some time thereafter, depending on when their schedules adjust.
The $1.1 trillion package fleshes out the budget agreement reached last month. That deal partially rolled back sequester-related budget cuts for the Defense Department and other agencies. The new bill would tweak one controversial aspect of that deal, which pared cost-of-living adjustments for working-age military retirees. Under the new measure, medically retired individuals and survivors would be exempted from the reduced adjustments.
The bill also renews a long-standing provision barring the U.S. Postal Service from ending Saturday mail delivery. That step is a key priority for USPS leaders, who have said that it enjoys broad public support and would save almost $2 billion per year.