Debt Ceiling and Budget Discussions Include Rural Funding Cuts

Farm groups watch negotiations between bipartisan Congressional members regarding fiscal matters.

The primary focal point in Washington, D.C., has been on Vice President Joe Biden’s group negotiations over the debt ceiling. The group, comprised of Biden, Sen. Max Baucus, D-Mont., Sen. Daniel Inouye, D-Hi., Sen. Jon Kyl, R-Az., Rep. Eric Cantor, R-Va., Rep. Chris Van Hollen, D-Md., and Rep. James Clyburn, D-S.C., is tasked with finding budget cuts that may make politically possible the passage of an increase in the debt ceiling to avoid a U.S. default.

May 16 marked a turning point in the national debate over U.S. government spending. The nation's debt surpassed the $14.3 trillion debt limit set by Congress. 

The “Gang of Six”, the competing (and the more fiscally serious) group led by Sen. Kent Conrad, D-N.D., and Sen. Saxby Chambliss, R-Ga., suffered a setback this week when Sen. Tom Coburn, R-Okla., bowed out from negotiations. The group hit an impasse as it sought an agreement to reach $4 trillion in debt reduction over 10 years by trimming defense spending and entitlement-program benefits and raising revenue by closing tax loopholes.

The $200 billion wouldn’t satisfy Republican demands for cuts equal to any increase in the U.S. debt ceiling and are a starting point for future negotiations, according to the people involved, who declined to be identified because they aren’t authorized to discuss specifics publicly,” a Bloomberg article said.

The National Sorghum Producers said “the bottom line is there are reports the Biden group is really sharpening the knives for U.S. farm policy, with indications they may go even further than the House-passed budget resolution. Having given up on dealing with the big ticket items that must be dealt with to bring our nations’ fiscal house in order, the Biden group may settle for political window dressing, however punitive it may be to rural America,” NSP said.

Whether the Biden group’s recommendations are ultimately accepted by the House and Senate, it will be, in part, up to farm groups and producers from around the country and their senators and representatives in Congress, NSP added. 

A letter from Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., which was signed by nine of her Senate Democratic colleagues on the Agriculture Committee (Budget Committee Chairman Kent Conrad (ND), Amy Klobuchar (MN), Patrick Leahy (VT), Kirsten Gillibrand (NY), Michael Bennet (CO), Sherrod Brown (OH), Ben Nelson (NE), Robert Casey (PA), and Tom Harkin (IA)), was sent May 19 to President Obama.

The letter stated in part that, “We strongly support serious efforts to reduce the federal deficit and to find a more sustainable path for job creation and fiscal responsibility. We understand that doing so will require difficult decisions based on the right priorities in order to move our country forward. Following our recent discussions with you, we respectfully submit our serious concerns that the ongoing budget negotiations impose imprudent cuts at the expense of the real needs of rural America and the 16 million jobs that come from agriculture. Specifically, we strongly oppose the extreme level of budget cuts to agriculture, equal to $48 billion, proposed by Budget Chairman Ryan and passed by the House of Representatives.

“As we begin to write the 2012 Farm Bill, we are committed to significant reforms including reducing program costs and duplication, along with streamlining programs and delivery. We believe that agriculture must do its part to help reduce federal spending. In fact, cuts to crop insurance have already contributed $4 billion toward deficit reduction. But we also understand that farming is an extraordinarily high-risk undertaking- as clearly demonstrated by the devastating weather events across the nation this spring. America’s farmers are struggling with a severe drought in the southwestern plains, historic flooding in the lower Mississippi basin and a cold, wet spring that is delaying spring planting in many places across the United States. America’s farmers need tools to manage their risk in case of natural disasters and increasingly volatile prices.

“Unreasonable cuts to the budget for farm bill programs would, by reducing available resources, seriously jeopardize our ability to craft a balanced new farm bill meeting critical national priorities…[S]pecific changes to Farm Bill programs should be left to the Senate Committee on Agriculture, Nutrition, and Forestry with enough flexibility to ensure that our agricultural economy and rural America receive the necessary investments and tools to be successful.”

It is widely assumed that the Senate will begin the writing of the next farm bill, unlike the last farm bill where the House took the lead on the writing.

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