08-18-2001

CONGRESS: Bellying Up to the Bar, Before Last Call

When the Congressional Budget Office issues its midsession review of the
federal budget outlook later this month, the agriculture community will be
watching closely. If, as expected, CBO concludes that the earlier
projections of a huge budget surplus need to be scaled back because of the
economic slowdown, farm interests will push Congress for quick action on
legislation revamping the 1996 Freedom to Farm Act, even though the act
doesn't expire until September 30, 2002. The House Agriculture Committee
passed such a measure before the August break.


But farm leaders will have plenty of competition for Congress's attention.
With powerful interests already pushing for significant new spending in a
number of areas-including the Pentagon, energy development, and
education-a pitched battle over the dwindling surplus is shaping up when
Congress returns after Labor Day.


"It may become a matter of first-come, first-served," said
Richard Kogan, a budget analyst for the liberal-leaning Center on Budget
and Policy Priorities, who was a longtime House Budget Committee aide.
"This is a race to the enactment line before the money is used up.
The House Agriculture Committee did the right thing for its purposes by
reporting out its bill. Other committees have been oblivious to those
concerns." Kogan noted, for example, that budget promises made
earlier this year for prescription drug benefits for seniors and health
coverage for the uninsured may be among the victims of a tighter
budget.


Congress has set aside several hundred billion dollars for these and other
programs in specially designated reserve funds, but certain conditions
must be met before the money can be spent. In this spring's budget
resolution, lawmakers barred spending for most of these causes if it would
force a deficit in "on-budget" accounts anytime in the next
decade. That decision put money from the Medicare and Social Security
trust funds off-limits for other programs. Borrowing from the trust funds
to finance other government operations used to be routine, but, with the
advent of the surplus, key members of both parties have gone on record
strongly opposing a return to such practices.


Ironically, some of the most enthusiastic advocates of additional farm
spending are also among the most zealous budget watchdogs. House Budget
Committee Chairman Jim Nussle, R-Iowa, said the budget allows for a new
farm bill, but warned that agriculture interests should not tarry. Time is
"of the essence," Nussle said. "Spending may have to be
curtailed after the midcourse correction. We may have tough choices to
make."


Like Nussle, Senate Budget Committee Chairman Kent Conrad, D-N.D., has
firmly opposed tampering with the Social Security and Medicare trust
funds. Conrad, a prairie populist with strong interests in agriculture
spending, said on National Public Radio earlier this month that the
expected budget forecasts will jeopardize the money that has been reserved
to write a new farm bill. Because the new budget contingencies include
some novel parliamentary language that gives discretion to the Budget
Committee chairmen, Conrad and Nussle will have considerable influence in
defining when the surplus has disappeared.


This background helps to explain why the House Agriculture Committee
rushed to approve a 10-year replacement for the Freedom to Farm Act before
the August recess. In frenzied meetings-during which junior members
complained that they lacked sufficient details about the impact of their
actions on farm policy-the panel's bipartisan leadership agreed to retain
much of existing farm policy, but nearly doubled annual spending
levels.


Total spending under the committee's farm bill would be $170 billion over
the next 10 years-despite the goal of the 1996 Freedom to Farm Act to wean
farmers away from government subsidies. Under that legislation, payments
to farmers were supposed to decline over six years, while the government
expanded exports to help compensate growers for the lost aid. By 2002, the
sponsors optimistically projected, farmers would be self-sufficient in the
international free market.


But Freedom to Farm self-destructed. Farmers, released from production
constraints, produced record harvests, and the commodities markets
reciprocated by sending prices to record lows. The drop in prices, in
turn, fueled demands for a series of annual farm bailouts that totaled
about $30 billion, including the $5.5 billion that Congress and President
Bush agreed to this month for the current fiscal year. The Environmental
Working Group, an environmental and public health research and advocacy
organization, received and made available to National Journal data from
the Agriculture Department indicating that in each of 21 congressional
districts, farmers received more than $1 billion in total payments between
1996 and 2000. In several districts, government farm aid made up more than
5 percent of the total per capita income.


These spiraling payments will set the stage for a major showdown in the
House, where managers plan to take up the farm bill during the week of
September 10. Urban and environmental interests, with support from
advocates of smaller family farms, hope to reorder farm-spending
priorities by shifting funds away from large farm enterprises and toward
conservation programs. That objective has been embraced in an amendment
sponsored by Rep. Ron Kind, D-Wis., who said that his proposal would
provide a fair distribution of funds to all farmers. "That resonates
with urban and suburban members who understand that we have had direct
subsidies for too long," he said. Kind was unsuccessful in pushing
his plan in the Agriculture Committee.


In the Senate, where the Agriculture, Nutrition, and Forestry Committee
plans to draft its farm legislation later in September, Chairman Tom
Harkin, D-Iowa, has been working with Richard G. Lugar of Indiana, the
panel's senior Republican, on a plan that Harkin says will make
conservation the "centerpiece" and might trim commodity supports
for farmers. "This is a way that we can both help the family farmers
and also help clean up the environment, so that folks not on farms see
that we're getting a societal benefit from this," Harkin told
National Journal. "There needs to be a leveling off [of commodity
supports] so that we don't continually provide for bigger farms to get
bigger and bid up the price of land." Harkin also intends to add a
new energy section to the bill, and he has accelerated his markup schedule
with the hope of completing action this fall.


Shifting farm-spending priorities could be a tricky equation for members
of both parties. Next year, several farm-state Senate Democrats-including
Harkin-face competitive re-election challenges. Bush this week signaled
his sensitivity to the vital constituency when he signed the supplemental
spending bill at his ranch in Crawford, Texas, and emphasized the need to
"make sure our ag economy stays strong and healthy." But some
Democrats have argued that Bush's tax cut, plus his proposed boosts in
Pentagon spending, will hurt farm interests.


With the prospect that funds may soon dry up, fiscal and political
pressures may work together to move the farm bill. Whatever the outcome of
this fall's spending battles, they seem destined to force lawmakers to set
priorities-and fast.


Richard E. Cohen and Corine Hegland

National Journal