D.C. Watch: Debt ceiling, farm bill up next

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Congress is on a two week Easter Break after passing a continuing resolution to keep the government running through the end of September. The continuing resolution kept the $85 billion in sequester budget cuts in place but provided some flexibility to avoid the planned furlough of meat safety inspectors.

The Congressional Budget Office says that Congress has now cut discretionary spending below pre-recession levels. However, entitlement spending continues to rise exponentially as the population ages and medical costs continue to rise.

Reconciling the House and Senate budget proposals for fiscal 2014 will top the agenda when Congress returns. And reconciling the budgets will be extremely difficult.

The Senate budget closes tax loopholes, cuts spending and increases spending for some job promoting, infrastructure rebuilding programs. The House proposal balances the budget in 10 years primarily through spending cuts.

With Republicans vowing to oppose the increase in taxes and Democrats arguing that the Republican spending cuts would hurt the economy the two parties may not be able to bridge their differences.

The House proposal would cut funding for the Agriculture Department by $184 billion over the next decade while the cuts in the Senate bill would total only $23 billion.

The next big issue for policymakers, after the budgets, will be raising the debt ceiling.

With accounting shifts, the Treasury Department can probably avoid default on the U.S. debts until mid to late summer. But by July or August Congress will need to raise the debt ceiling.

The issues surrounding the debt ceiling debate are essentially the same as those on the budgets.

Republican leaders say they will only raise the debt ceiling if the increase is matched by spending cuts. Democrats argue that increased revenue needs to be part of the deal. The difference is that the country could face default if the debt ceiling isn’t raised, while the House and Senate have not agreed on a budget for the last several years.

Members of Congress are also talking about getting a new farm bill out of the Agriculture Committees in April or May, despite the wide ranging budgets for agriculture.

It appears that House Agriculture Committee Chairman Frank Lucas, R-Okla., may try to make some changes to the bill the Committee passed last year, rather than starting over and draft a new bill.

It would take some pretty major changes to bring the farm bill proposal in line with the budget proposal the full House passed last week. Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., said she wants to have a farm bill markup in April.

The committee will need to find about $10 billion more in spending cuts since CBO determined that the bill passed last year reduced spending by only $13 billion, instead of the $23 billion originally claimed.

The Senate bill included a $5.5 billion increase in crop insurance costs due to the addition of the “shallow loss” program. In total the crop insurance part of the Senate’s farm bill proposal comes in at more than $90 billion over the next ten year period. But the biggest part of the Agriculture Department bill is the Supplemental Nutrition Assistance Program (SNAP) which totals more than $750 billion.

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