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Playing Politics with the Sequester

This Business of Farming

Is the Obama administration trying to make federal cuts as painful as possible?

Published on: March 8, 2013

Last week Secretary of Agriculture Tom Vilsack gave a moving speech to the thousands of farmers attending Commodity Classic in Florida. After ripping congress for not passing a budget or farm bill, he detailing the various ways USDA and farmer constituents would suffer from the sequester, that multi-billion dollar package of automatic spending cuts congress put in place last year as incentive to find agreement on a package of federal tax increases and spending cuts.

The idea was that the cuts would be so devastating to domestic and Defense spending that congress would have no choice but to get together on a more intelligent deal to cut the deficit.

"Im hopeful that well look at reductions …and do them in the best manner possible to make sure we protect the industry," says South Dakota Congresswoman Kristi Noem.
"I'm hopeful that we'll look at reductions …and do them in the best manner possible to make sure we protect the industry," says South Dakota Congresswoman Kristi Noem.

Sadly that did not happen. So when the sequester hit on March 1, it targeted around $55 billion in defense cuts and $30 billion in discretionary spending like law enforcement, disaster relief, education, unemployment benefits, research and other such federal programs.

The across-the-board nature of the cuts, which requires every department in the government to come through, means making tough choices. "This (USDA) workforce is dedicated to providing service to American farmers, but with the sequester, every line item has to be cut by a certain percentage – it's not a situation where we can take some money from one area and move it to another," Vilsack told farmers.

Secretary of Agriculture Tom Vilsack says the government may need to prioritize spending due to sequester cuts.
Secretary of Agriculture Tom Vilsack says the government may need to prioritize spending due to sequester cuts.

But is that really the case?

Shortly after Vilsack returned to Washington this week, he went before a House Agriculture Committee hearing where Rep. Kristi Noem, R, S. Dakota, grilled him about the Administration’s efforts to reduce the impact of sequestration on U.S. farmers.

Rep. Noem read a leaked internal email from Charles Brown, USDA’s Animal and Plant Health Inspection Service’s (APHIS) eastern regional director. In the email, Brown mentions he had inquired with his superiors at USDA as to the degree of flexibility they will have in administering sequestration cuts.

The response from USDA was striking: “We have gone on record with a notification to Congress and whoever else that ‘APHIS would eliminate assistance to producers in 24 States in managing wildlife damage to the aquaculture industry, unless they provide funding to cover the costs.’ So, it is our opinion that however you manage that reduction, you need to make sure you are not contradicting what we said the impact would be.”

"Contradicting what we said the impact would be" is troubling, to say the least. What message does the Obama administration not want to contradict? Is the President telling his lieutenants to make sure everyone sings off the same "sky is falling" hymn page?

Rep. Noem asked Sec. Vilsack if it is USDA policy to not use any flexibility the department may have in managing the sequester.

"No, Congressman, I'm not sure whether that decision is a result of prioritizing and actually using flexibility," Vilsack replied. "If we have flexibility we're going to try to … make sure we use sequester in the most equitable and least disruptive way. There are some circumstances…we've talked a lot about meat inspections…where we do not have that flexibility because there are so few accounts. But in other areas you may have multiple accounts and you may have flexibly, in which case you may have to prioritize what's the most important thing to adequately and appropriately fund."

Vilsack agreed that reducing impact to producers should be a priority. "I wouldn't say we've said no to flexibility but there are certain circumstances where we don't have flexibility."

Rep. Noem seemed unimpressed. "My concern from the email is…the way that it is worded it prioritizes staying consistent with the administration, and what they have previously said, and what they may decide to do to protect producers…I'm hopeful that we'll look at reductions …and do them in the best manner possible to make sure we protect the industry and as many producers as we can."

Fiscal priorities

The sequester represents a 2.2% cut to federal spending,  "If we can't do that, then we are a country that has completely lost sight of our priorities," Rep. Noem told me this morning in an exclusive interview. "There's a lot of concern that the administration is playing politics with sequester and making it as painful as possible to the public in order to avoid future cuts that don't agree with the Obama agenda. The email (from Brown) confirmed that to me.

"They had the opportunity to protect producers, but yet they prioritized with what the administration was saying instead. I believe he (Obama) wants sequester to be painful and wants to use it politically."

Sequestration is going to have some detrimental effects. But we certainly can do something to alleviate that. It would be good to come back to the table and still reduce spending, but in a smarter way. That much we can all agree to.

For now, USDA says crop insurance will not be affected. Disaster payments are likely to be reduced. Food stamps, which the house farm bill would have reformed, will not be touched – they were protected from sequester.

Vilsack told reporters last week that some payments for programs have been made to some recipients. USDA may try to ask for some of that funding back in what the government calls "clawback."  

"It's clear that there are people who have been paid and some that have not been paid and the debate is what does the sequester do?" Vilsack asked reporters. "Do we claw back, or ding the people that didn't get the money by not paying?"

However, Rep. Noem paints a less gloomy picture. "The majority of payments that will be impacted by sequester won't go to producers until next year," she told me. "So, we hope that we can go back in through the farm bill and make more targeted cuts in that process."