D.C. Watch: No clear path to avoid automatic spending cuts

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Automatic spending cuts, called “the sequester,” may not be avoided.

When Congress passed a bill avoiding the fiscal cliff at the beginning of this year, they postponed the billions of dollars in automatic spending cuts until the beginning of March. Several proposals to avoid or modify the automatic cuts are circulating, but party leaders now say they see no clear path to compromise.

U.S. Rep. Paul Ryan, R-Wis., predicted last weekend that “the sequester is going to happen.” There are significant numbers of House members who feel that the cuts in government spending could reduce the federal budget deficit without devastating the economy. They argue the deficit itself and constant threat of higher taxes to pay for it are already hampering investment and job creation.

Three U.S. Senators are trying to get disaster assistance for livestock and specialty crop producers hurt by last year’s drought. The three Senators are Baucus, D-Mont., Blunt, D-Mo., and Stabenow, D-Mich. The bill would reinstate the Livestock Indemnity Program, the Livestock Forage Program, the Noninsured Crop Disaster Assistance Program, and the Emergency Livestock Assistance Program, programs that expired at the end of fiscal 2011. Combined these programs would cost about $763 million. Prospects for the bill are iffy at best.

A bipartisan group of Senators has put forward a plan to reform U.S. immigration laws. Immigration laws are a big deal for agriculture, with an estimated 25% of the farm workforce made up of undocumented workers, according to a study by the Pew Hispanic Center.

A California Farm Bureau study last year found that 71% of tree-fruit growers and almost 80% of raisin and berry growers could not find enough workers willing to prune trees or pick crops. The immigration proposal would offer a path to citizenship for some of the country’s 11 million undocumented immigrants, including farm workers.

Congress has already passed a nine-month extension of the 2008 farm bill that would include another round of direct payments this fall. However, those payments are not a sure thing. Congress will be discussing ways to reduce the federal budget deficit at least three times over the next month and they could decide to divert the $5 billion in direct payments to some other priority in any of those debates.

The three debates include the debate over the automatic spending cuts in February, the debate over the continuing resolution that will occur in March and the debate over the debt ceiling likely in May or June. With net farm income near record high, direct payments are a big target for budget cutters or for Congressional members who think there are better ways to spend the money. At least part of the government subsidies for crop insurance may also be at risk in coming months.

Japan has agreed to permit import of U.S. beef from animals less than 30 months of age announced U.S. Trade Representative Ron Kirk and Ag Secretary Tom Vilsack this week. Cattle futures soared on the news. Since 2007 the age limit for imports to Japan has been set at 20 months or younger. The new agreement goes into effect immediately.

Japan was the largest buyer of U.S. beef before the discovery of a cow with bovine Spongiform encephalopathy (BSE) in December of 2003. They had banned imports of U.S. beef altogether from December 2003 to July 2006.


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