The FY 2014 budget unveiled on Tuesday by House Budget Committee Chairman Paul Ryan (R-Wis) calls for $31 billion in cuts to Agriculture programs over ten years as part of the package that will balance the budget by 2030. The budget statement notes that while the economy
is still struggling overall, agriculture "has remained an economic success
story" that demands a re-examination of aid to farmers, who get
millions annually in crop subsidies and federally supported crop
insurance.This aligns nicely with President Obama's position; he has repeatedly called for an end to crop subsidies, and will reportedly release his own budget in April. But despite the President hosting Rep. Ryan for lunch last week, the two remain far apart.
In Ryan's proposal, decisions about specific farm program cuts will be made by the House Agriculture Committee. The other big news for agriculture is a proposal for a major change to the Supplemental Nutrition Assistance Program (SNAP), better known as Food Stamps. It would be turned into a block grant program for states, with reductions to eligibility and other specific limits. Enrollment in SNAP has steadily soared since President Obama took office, and the budget document says that SNAP is a good case study for how aid programs can be reformed.
The document also includes a call for the GOP version of the Holy Grail: A full repeal of the Affordable Care Act, and changes to corporate and individual tax rates to no more than 25%. It eliminates deficits in 10 years, thanks to a $600 billion tax increase in the fiscal cliff agreement. Medicare turns into a premium support program, while Medicade, like Food Stamps, will be turned over to the states.
Downloads: House Budget Committee FY 2014 Budget Resolution and The Legislative Text
Changes to SNAP...
Ryan proposed spending $600 billion over the next decade on SNAP, with a plan that "retools federal aid to low-income families in two ways."
"Spending on SNAP has quadrupled in the past decade. It’s grown in good times and bad, because of the open-ended nature of the program," says the budget document. "States get more money if they enroll more people. This setup encourages waste, fraud, and abuse."
SNAP spending and enrollment hitt an all-time high in Fiscal Year 2012, when an average of 47.6 million Americans were enrolled each month, and spending between Oct. 1, 2011 and Sept. 30, 2012 was $80,401,000,000.
The two-part changes will reduce eligibility for beneficiaries, and make enrollment in SNAP time-limited and dependent on employment: "This budget fixes the flawed incentive structure that poorly provides assistance to those in need," says the document.
"First, it eliminates the incentive for states to sign up as many recipients as possible. After employment has recovered, it converts SNAP into a block grant, indexed for inflation and eligibility. This reform allows states to tailor their programs to their recipients’ needs. And it encourages states to help recipients find work."
“Second, it calls for time limits and work requirements. It suggests, however, that the federal government implement these reforms gradually to give states and recipients time to adjust.
The changes will encourage states to do a better job with the program, and encourage citizens to get off the SNAP roll, says the document.
"By capping open-ended federal subsidies and allowing states to develop innovative approaches to delivering aid, the budget’s gradual reforms encourage states to reduce rolls and help recipients find work. The budget also calls for time limits and work requirements like the reforms that helped reduce poverty nationwide in the mid-1990s."
Agriculture subsidies...
The budget document calls on the House Agriculture Committee "to revisit current farm-support programs, such as the fixed payments that go to farmers irrespective of price levels and the current structure of the crop-insurance programs."
"Production costs have risen, but farmer incomes continue to be supported by strong prices for most crop and livestock commodities. The top five earnings years for farmers in the last 35 years have occurred in the last decade," says the document.
"Yet, at the same time, numerous overlapping government programs exist to provide income support to farmers. With farm profitability--and deficits--continuing at high levels, it is time to adjust support to this industry to reflect economic realities."
But the document notes that "recognizing that the Agriculture Committee is responsible for implementing these reductions, and to maintain flexibility for the committee, this proposal does not dictate the specific changes to the programs in under the committee’s jurisdiction. These reforms will save taxpayers $31 billion over the next decade."
Downloads: Budget Summary Tables and Budget Charts
The response...
The White House issued a statement about the overall budget, saying "the math just doesn't add up." The full statement is below.
House Agriculture Committee Chairman Frank Lucas (R-OK) issued a statement praising Ryan for actually producing a budget, and said his Committee last year "developed a reform-minded, fiscally responsible farm bill that contributed to deficit reduction and we will continue on that same course this year."
"We will consider the suggestions contained in Chairman Ryan’s budget, as is customary for the Agriculture Committee to consider a variety of viewpoints when crafting comprehensive legislation," Lucas said.
But House Agriculture Committee Ranking Member Collin Peterson (D-Minn) called the proposal "political messaging," and said it might be better to re-extend the farm bill than to try to write a new one.
"The House Agriculture Committee has repeatedly shown it is possible to work together to find budget savings in a bipartisan fashion by making balanced cuts across farm bill programs," Peterson said in a statement.
"It wasn’t an easy process but we did it because that’s our job. If the House Republicans do take the Ryan budget numbers seriously, I don’t see how they can be serious about passing long-term farm policy this year. If these are the budget priorities for the House Majority, agriculture might best be served by again extending the current farm bill."
The White House statement, from Press Secretary Jay Carney:
"The President believes that there is an opportunity for Democrats and Republicans to come together around a balanced plan to grow the economy and shrink the deficit by investing to create jobs, cutting wasteful spending, and strengthening programs like Medicare and Medicaid. This approach will require both parties to compromise and make tough choices.
While the House Republican budget aims to reduce the deficit, the math just doesn't add up. Deficit reduction that asks nothing from the wealthiest Americans has serious consequences for the middle class. By choosing to give the wealthiest Americans a new tax cut, this budget as written will either fail to achieve any meaningful deficit reduction, raise taxes on middle class families by more than $2,000 – or both. By choosing not to ask for a single dime of deficit reduction from closing tax loopholes for the wealthy and well-connected, this budget identifies deep cuts to investments like education and research – investments critical to creating jobs and growing the middle class. And to save money, this budget would turn Medicare into a voucher program--undercutting the guaranteed benefits that seniors have earned and forcing them to pay thousands more out of their own pockets. We've tried this top-down approach before. The President still believes it is the wrong course for America.
That’s why the President has put forward a balanced approach to deficit reduction with no sacred cows. It includes more Medicare savings over the next decade than the House Republican budget, but it does so by cracking down on waste and fraud, not by asking middle class seniors to bear the burden. It closes tax loopholes for the wealthiest and biggest corporations so we can still afford to create jobs by investing in education, manufacturing, infrastructure, and small businesses. The President’s plan puts our nation on a fiscally sustainable path and grows our economy from the middle class out.
While the President disagrees with the House Republican approach, we all agree we need to leave a better future for our children. The President will continue to work with Republicans and Democrats in Congress to grow the economy and cut the deficit in a balanced way. This is the approach the American people overwhelmingly support, and that is what the President will continue to fight for each day."
