Senate Begins Budget Battle Again

Agriculture Committee scheduled to markup reconciliation package Wednesday morning. Jacqui Fatka

Published on: Oct 18, 2005

Senate Agriculture Committee members will again begin to try and agree on where $3 billion in mandatory agriculture spending cuts will come Wednesday morning. Hurricane Katrina moved original work back to the beginning of October. And concerns over the addition of an expired dairy program and other objections have committee members still scratching their heads after the first markup was delayed Oct. 6.

Senate Agriculture Committee Chairman Saxby Chambliss spoke with reporters Monday in preparation of a committee markup slated for Wednesday morning. He says he's confident there will be a markup on Wednesday, but it's been difficult to get bipartisan support for any reduction.

And with the President's election commitment to continue the Milk Income Loss Contract Program that expired last month, $3 billion in cuts is harder to find while extending MILC for two years at a cost of $998 million.

Conservation funding takes a hit

The chairman's proposed package would reduce all USDA Title I program payments by 2.5%; cut spending for conservation and nutrition programs; and would pay milk producers at a 30% lower rate than in the previous MILC program.

Conservation programs will be targeted for one-third of proposed FY06 budget reconciliation cuts. Total conservation programs take a hit of over $1 billion over five years. In addition, Chambliss announced that the Conservation Security Program would take 75% of the total conservation reduction.

The proposal cuts farm income support promised in the 2002 farm bill. Senate Ag Committee ranking member Tom Harkin says an average farm of 1,000 acres would experience a reduction of $1,158 in government payments. That same farm, if energy prices were to remain high, would lose more than $6,100 dollars in costs on fuel, electricity, nitrogen fertilizer and other expenses. "Thus, over the next year, the 1,000-acre farm would lose more than $7,200 in income," Harkin says.

The package also extends much of the 2002 farm bill to the end of FY 2011. The bill is due to expire in 2007. Chambliss in several meetings with agriculture leaders emphasized it is his intention to write a new farm bill in 2007 as scheduled and that extending the bill to 2011, the Agriculture Committee could protect the baseline budget authority for the farm bill.

The President's budget cut recommendations included a payment limit on farm payments and 5% across the board cuts. Chambliss' proposal asks for only a 2.5% cut in payments and does not include the payment limits.

MILC expected to survive markup

Chambliss says he's still trying to work out the details of MILC. Several Republicans, including Pennsylvania's Rick Santorum and Minnesota's Norm Coleman are depending on MILC's extension for reelections. The fact remains that some committee senators from both sides of the aisle worry over the cost of extending the program at the expense of other commodity programs.

The Senate Ag Committee will begin the process with MILC included in the package, Chambliss says. He says he would not be surprised if an amendment is proposed during Wednesday that deletes MILC's extension. However, he does not expect the amendment killing MILC to pass in the committee.

House looking to make deeper cuts

The House has not begun working on its budget package, but is expected to offer higher cuts than the Senate. MILC support in the House is weak compared to the Senate. Chambliss says it's unlikely the House's package will include funding for a two-year extension of MILC.

Chambliss warns that when the two chambers settle differences in conference, he'll stand strong for minimum food stamp cuts - no more than what the President proposed in his budget. He says he's always had an issue with finding savings in food stamps. Chambliss says Hurricane Katrina shows it is a good program that benefits people that need to provide food on the table when it may otherwise be impossible. He adds that farmers benefit from the food stamp program, whether it's because those who use food stamps buy milk or bacon or food in general at the store, farmers get the benefit of increased product consumption.

Chambliss says Senate Majority Leader Bill Frist is "dead serious about achieving savings over and above the $35 billion." Chambliss says, "He'd like to get it to $50 billion, but that'll be very difficult to do when we're working through MILC, food stamps and other issues."