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Senate Tackles 2013 Farm Bill

posted on May 24, 2013

After declining nearly 6 percent in March, orders for long-lasting manufactured goods rebounded last month, due largely to increased demand for aircraft and stronger business investment.

The Commerce Department reported Friday that orders for durable goods rose 3.3 percent in April.  The improvement was due, primarily, to a 16 percent increase in demand for COMMERCIAL aircraft and a 53 percent spike in orders for MILITARY aircraft.  Stripping out the volatile transportation sector, however, orders still rose 1.3 percent.   

Earlier this week, the government reported that sales of new homes increased 2.3 percent in April, to a seasonally adjusted annual rate of 454,000 units.  That's just barely below January's pace of 458,000, which was the fastest since July of 2008.  And the median sales price jumped 8.3 percent last month to a record high of $271,600.

An improving economy eases concerns that federal spending cuts and tax increases might prompt consumers to tighten their purse strings.  But fiscal hawks continue their efforts to reign in government spending.  And this week, they trained their sights on the federal program authorizing farm and nutritional spending -- better known as the Farm Bill. 

Senate Tackles 2013 Farm Bill

Work began in earnest this week on the Agricultural Reform, Food and Jobs Act of 2013 in the Senate. Promising $24 billion in deficit reduction over the next 10 years, the bipartisan bill passed out of committee last week on a 15-to-5 vote.

Direct payments to farmers would be phased out for a savings of $5 billion annually. Direct payments were often singled out as government largesse because they were made every year regardless of crop prices or yield.

Of the $500 BILLION to be appropriated for the measure over the next five years, only 20 percent goes to agricultural programs.  The remainder of the cost, nearly $400 billion, pays for nutritional assistance programs. However, according to some sources, proposed cuts to the Supplemental Nutrition Assistance Program, or SNAP, would have devastating effects on its participants.  One-in-seven Americans currently rely on the SNAP program, formerly known as food stamps. By some estimates, cuts of $4.1 billion over the next 10 years would take nearly $90 per month out of the pockets of those living below the poverty line.

Both sides of the aisle lined up this week to add their twist to the omnibus legislation. The 150 amendments up for consideration ranged from sugar subsidy reform to the authorization of industrial hemp farming.

An amendment by Oklahoma Senator James Inhofe (IN-hoff), a Republican, would have turned administration of the SNAP over to state governments. That amendment was defeated 60-36.

Additions by Senator Kirsten Gillibrand (JILL–a-brand), a Democrat from New York, sought to replace cuts to SNAP by cutting the Federal crop insurance program. But her amendment was defeated by an even larger margin.

To help provide a safety net for farmers, new programs based on minimum prices are part of the Farm Bill. In addition to these supports, crop insurance, another part of the safety net, received its fair share of amendments. Under the legislation passed out of the Senate Agriculture Committee last week, taxpayers would foot 64 percent of the bill for farmers.

Senator Dick Durbin proposed reform to the crop insurance program requiring farmers with an adjusted gross income of $750,000 – about 1 percent of the nation’s 2 million farmers -- to pay 15 percent more of their bill. The Illinois Democrat estimated only 20,000 of the nation’s wealthiest farmers would be affected by the proposal.

Sen. Dick Durbin, D-Illinois: "20,000 out of 2 million. 20,000. Well, what's it worth that those 20,000 farmers pay 15 percent more? A billion dollars a year.  A billion dollars coming into our treasury."

That amendment passed 59 - 33.

Senator Kay Hagan proposed an amendment to help prevent fraud with the same federal program. The North Carolina Democrat’s motion handily passed 94 to zero.

An amendment requiring the labeling of genetically modified foods was defeated on a 71-27 vote.

And Senators from sugar-producing states were able to hold off a move by northern lawmakers to cut subsidies. Democratic Senator Jeanne Shaheen of New Hampshire, moved to reduce price supports that often give U.S. sugar producers twice the world price for the bounty of their harvest. That subsidy reforming amendment was defeated on a 54-45 vote.

In a statement, the White House said it supports the Senate version of the Farm Bill but would like to see more savings in the crop insurance and farm subsidy programs. It did not specify how large a cut it was seeking.

The Senate is expected to continue debate when it returns from the Memorial Day recess while the House is preparing to take up the measure sometime next month.

Tags: Agricultural Reform crop insurance Farm Bill Food and Jobs Act of 2013 food stamps S.954 SNAP