Wednesday, July 20, 2011

A New Farm Bill, Deficits and the Bureaucracy

Farm Policy yesterday has extensive discussion of the next farm bill.  There are so many balls in the air right now it's (even more) difficult to write intelligently than usual.  From the bureaucracy's perspective it appears the bottom line is: it will be an interesting time, as in the Chinese curse. Working in FSA in Washington, or in Kansas City when a farm bill is being written and implemented is always fun. 

I think from a bureaucrat's view there are two separate timelines:

  1. The first relates to the debt ceiling/deficit reduction. The Agriculture committees have been asking that they be given the authority to figure out where to cut; essentially saying tell us to cut $15 billion but don't specify where, we'll do.  That's essentially a form of the budget reconciliation bill which Congress has been using for 30 years so or, except that the cuts this time around likely will be deeper. (See this oldish Sustainable Agriculture post.) So I assume either by August, or by later this year, FSA will get changes needed for the 2012 crop year to save money.  Presumably those changes won't be too hard to implement, in that they'll cut rates or programs, not create new provisions. 
  2.  The second is the actual new farm bill, which I assume gets written and passed in calendar year 2012 to cover crops in 2013 and later. The question now seems to me to be whether there's going to be a set of constaints on the Ag committees and how constrictive they are.  If I understand, the Biden group's proposal likely would require cutting $3 billion a year.  The McConnell/Reid proposal essentially punts the amounts of cuts for agriculture to a separate group.  If I'm an FSA bureaucrat, I'm hoping the cuts get set in stone sooner rather than later. Going with a separate group of legislators to figure out cuts means delay, which gives the Ag committees less time to do their work.  I suspect the bureaucrats and the Ag committees have separate incentives: bureaucrats want things settled as soon as possible, committees want as much flexibility as possible, which they probably get if things get punted down the road.
Given all the balls in the air, FSA might see a high proportion of people who are eligible actually deciding to retire.

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