Farm bill can wait, economist says

2012-09-19T18:30:00Z 2012-09-20T00:04:30Z Farm bill can wait, economist saysBy TOM LUTEY tlutey@billingsgazette.com The Billings Gazette

Farmers are demanding Congress pass a new, $900 billion farm bill by the end of the month, but a conservative Montana economist says there’s no rush. Putting the bill on hold might benefit taxpayers, he said.

“There’s no imminent danger,” said Vince Smith, a conservative economist with the American Enterprise Institute and a Montana State University professor. “It seems unlikely that the lack of a new farm bill or reauthorization of the current bill will cost the Montana producer, other than dairy farmers.”

Dairy farmers receive a subsidy to help offset imbalances between milk prices and what it costs to feed a dairy cow, though Montana’s dairy industry is small.

For months, AEI economists have urged Congress to trim billions of dollars from the 2012 farm bills proposed by the Senate and House. Though lawmakers insist their bills, which spend about $900 billion over 10 years, are leaner than the soon-to-expire 2008 farm bill, Smith and others argue there might not be any savings.

The 2008 farm bill expires at the end of September. The Senate in June authorized a new farm bill version that it says is $23 billion leaner than the current farm bill, mostly because direct government payments to farmers have been eliminated.

The House Agriculture Committee has authored a bipartisan farm bill it says is more than $30 billion lighter. The House cuts are deeper than the Senate’s, mostly because of cuts to nutrition programs like food stamps for the poor.

But Republican leaders have blocked the House Ag bill from a vote by all 435 lawmakers, arguing there aren’t enough yes votes to bother. House Democrats are balking at nutrition program cuts. Tea Party Republicans say the cuts to both nutrition and farm subsidies aren’t deep enough.

Without a House vote, the farm bill is in limbo because lawmakers will head home in October to campaign, though for farm-state Republicans, failure to pass a farm bill has become an election issue.

However waiting might be the best bet for deeper farm bill cuts, Smith said. In January, a newly elected House and Senate will turn to cutting deficit spending. In that environment, deeper cuts to the farm bill might be considered, among them cuts to federally subsidized crop insurance and conservation programs, as well as deeper cuts to food stamps.

Smith said the Senate’s cuts to direct payments were a good step, but that too much of the savings was then spent on creating new insurance programs that commit taxpayers to backfilling farm profits whenever crop payouts dip 20 percent or more.

With crop prices currently on a historic high streak, payments are sure to drop, Smith said, which means taxpayers will have to pony up.

Proponents of passing a farm bill now have been the loudest voices in the debate for months. Farm groups lobbied in Washington, D.C., on Sept. 12 to force the issue. But now the opponents are speaking up. The Wall Street Journal this week editorialized that postponing a farm bill vote has merit. The Journal contends that passing a nearly trillion dollar bill ahead of a greater effort at deficit reduction doesn’t make sense.

There are many voices arguing sooner is better for the farm bill, including U.S. Sen. Max Baucus, D-Mont.

Wednesday, Baucus took the Senate floor to say it’s inexcusable for House Republicans to leave farmers in the lurch.

“This isn’t my first farm bill, and I can tell you from personal experience that this is unprecedented. House leadership has never blocked a farm bill that has been reported out of Ag Committee,” Baucus said.

One in five jobs in Montana is tied to agriculture, which make the farm bill a jobs bill for the state, Baucus said. Montana’s Democratic Sens. Baucus and Jon Tester and Republican Rep. Denny Rehberg are all encouraging farm bill passage as soon as possible.

Rehberg was one of nine Republican lawmakers to join a petition attempt to force the farm bill to the floor for a vote, though a couple of Republicans have since withdrawn their names.

Baucus contends that delaying passage of the farm bill causes uncertainty in the farm economy because the federal programs that farms depend on aren’t a sure bet. Drought and fire have wreaked havoc in agriculture this year and the farm programs are needed to address those losses, Baucus said.

Smith said many of the programs upon which farmers rely are secured by other non-farm bill provisions in the federal government. Nutrition programs for the poor and elderly will not expire. There is time to craft a leaner bill.

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