Iowa Public Television


Budget Deficits Pressure Farm Programs

posted on March 28, 2003

Hello, I'm Mark Pearson.

Even before the first shot was fired, angst over the War with Iraq was beginning to exact a toll on the U.S. economy. Sales of new and previously owned homes plummeted, despite the lowest mortgage rates in 40 years. Factory orders for big ticket items fell 1.2 percent in February as consumer confidence fell for the fourth straight month.

Against that backdrop Congress is crafting a spending plan for the next fiscal year that begins the end of September.

Both the house and senate have endorsed a 2.2 trillion dollar budget for next year. But, the two sides remain far apart on details. For example the senate pared back the president's 700 billion dollar tax cut plan to help pay for the war. And there is some congressional discomfort on the matter of the budget's estimated 400 billion dollar deficit. Typically, when deficits rise, budget hawks start looking for budgets to cut. That's a worry to the farm lobby.


Budget Deficits Pressure Farm Programs

The final budget battle will be fought in a joint house-senate conference committee, which typically involves lengthy horse trading sessions among lawmakers who've been favored by appointment to the committee. The process means there will be winners and losers.

Rural interests already anticipate they will be competing for a shrinking pool of money. For example social advocates fear cuts will be made to nutrition programs like food stamps, school lunches and food subsidies to women, infants and children. Environmental and rural advocates fear the loss of conservation and rural economic development programs.

For their part Southern farmers fear lawmakers will target the amount of subsidies they can receive under farm law passed last year. Indeed a bi-partisan coalition of Midwestern lawmakers led by Iowa Republican, Senator Chuck Grassley, is seeking to do that through by lowering the cap on total government farm payments to $275-thousand dollars a year. That's down from the current limit of $300-thousand dollars. More significantly Grassley's legislation would eliminate the so-called "three-entity rule" which allows large operators the legal ability to split their holdings into three and receive maximum payments on each.


Tags: agriculture Congress deficit news policy politics