WASHINGTON - As President Obama and Republican leaders try to avoid automatic spending cuts and tax increases beginning in the new year, several lawmakers say a stalled farm bill that reshapes nutrition and agriculture programs could contribute billions of dollars in savings.
Sen. Debbie Stabenow, D-Mich. and chairwoman of the Senate Agriculture Committee, and Rep. Frank D. Lucas, R-Okla. and chairman of the House Agriculture Committee, are trying to persuade administration and congressional leaders to include the measure in negotiations to avoid more than $500 billion in tax increases and more than $100 billion in automatic spending cuts that would go into effect next year.
While the Obama administration has not decided whether to include the bill in its talks with Congress, officials have indicated that they would be open to changing some farm programs to narrow the deficit.
When asked about what role farm policy might play in the deficit reduction talks, Treasury Secretary Timothy Geithner said on CBS' "Face the Nation" on Sunday that reforming farm subsidies was "very important" and that it could "raise substantial amounts of money."
The farm bill, which comes up for debate every five years and finances hundreds of programs, including crop insurance and food stamps, expired Sept. 30. Most farmers have not seen an immediate effect because the bill, passed in 2008, covers most subsidy and loan programs into the next planting season, which begins in the spring. And, Congress passed a stopgap spending measure in October.
In June, the Senate passed a $969 billion farm bill, which saved $23 billion over 10 years by cutting several farm subsidies and nutrition programs. About $4.5 billion of the savings came from cuts to food stamps. The bill also eliminated $5 billion in so-called direct payments that are given to farmers or landowners whether or not they grow crops.
The House Agriculture Committee passed its version of the bill, which saves about $35 billion over 10 years with $16 billion of the savings from cuts to the food stamps program. The House version also eliminated $5 billion in direct payments. But because of disagreements among Republicans about whether the program cuts are deep enough, the bill never made it to the floor for a vote.
While the expiration of farm programs presents challenges for farmers until a new bill is passed, agriculture experts say a bigger issue is that on Jan. 1, many farm programs will revert to a 1949 farm law. That law said Carl Zulauf, a farm policy expert at Ohio State University, would reintroduce higher government price supports for corn, rice, wheat and other crops and could lead to much higher consumer prices and federal spending.
