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Debt Proposals Impact Agriculture, Farm Bill

Leaders in the House and Senate have each developed plans to reduce the nation's deficit and raise the debt ceiling before Aug. 2 when the government potentially could default if an agreement isn't reached.

House Speaker John Boehner's proposal requires more than $1 in spending cuts for every $1 in debt ceiling increase. House Ag Committee Chairman Frank Lucas, R-Okla., expects the final proposal, which would include $1.2 trillion in discretionary cuts, to come to a vote Thursday or Friday. Under Boehner's proposal, Lucas says there are no specific cuts in ag spending, unlike in the proposal by Senate Majority Leader Harry Reid, D-Nev.

Lucas says the Senate plan proposes $15 billion in immediate agricultural spending cuts, a net of $10 to $11 billion.

"They propose in the Senate version of the bill to recalculate how direct payments would be made in October so producers would only be eligible for 95% of the acres they have signed up for in the five-year Farm Bill," Lucas said. "That's not to say in Mr. Boehner's proposal there's not going to be cuts and reduction in spending, but at least in this first go-around, the things that are important for the rest of this summer and the first part of those annual payments in October are protected under Mr. Boehner's proposal."

Lucas has worked with Congressional leadership emphasizing the fact that the 2008 Farm Bill is a five-year contract between them and the producers. He says it's important that Congress live up to those obligations.

"Right now, at least in the House version we would be able to finish the fifth year of the Farm Bill," Lucas said. "Who knows what will be available to us when we write the new Farm Bill in 2012. Who knows if in the final agreements on mandatory spending that we're not required to write a Farm Bill in a hurry at the end of this year versus on the regular order of next summer."

There is no certainty as to when the 2012 Farm Bill will be written according to Lucas, who says it depends on which final debt legislation makes it to President Obama's desk and which one he signs. He says it also depends on how savings are achieved across the board.

"If it is done in a way that affects our mandatory program then we have to move early," Lucas said. "If we are given some flexibility then we'll be able to write, as I would hope, a Farm Bill next summer using whatever the numbers are that have been decided by Congress and signed into law by the President as our base and we'll move forward from that. I have emphatically said from day one we need to fulfill our commitments of the fifth year, the last year of the present Farm Bill and then we'll do our part for rural America. We don't want to do two or three times our part, but we will do our part."

The House Ag Committee has finished its eighth hearing looking at how money has been spent in the current farm bill and what can improve. Lucas says this is preparing committee members to make the tough decisions that lie ahead - whether that's at the end of this year or next summer.