Fiscal battles block work on new farm subsidy bill
WASHINGTON (Reuters) - Fiscal battles in Congress could prevent lawmakers from writing a new farm bill for weeks or months, prolonging disputes over farm subsidy reforms and cuts in food stamps for the poor that together could save up to $35 billion.
Agricultural leaders in Congress originally hoped for speedy work on the overdue farm bill - the 2008 law expired last year - but are unable to give a timeline for action in the Senate or House of Representatives.
"There are a lot of pieces up in the air," Frank Lucas, chairman of the House Agriculture Committee, said on Wednesday. He cited over-arching issues such as the federal debt limit, automatic spending cuts that could take effect in March and the new "baseline" for federal spending due in a few weeks.
"No starting date at this point," Lucas said, when asked about the farm legislation. "We really don't know the lay of the land right now. When we know, we'll go."
Senate Democrats put a new farm bill on their list of priorities for the year but no date was set to draft a bill. Senate Agriculture Committee Chairwoman Debbie Stabenow of Michigan said she will call a "mark up" session as soon as possible to approve an updated version of its 2012 bill, which was passed by the full Senate in June.
FUTURES INDUSTRY REGULATOR NEEDS RENEWAL
Moreover, the House and Senate Agriculture committees have yet to chose a date to begin work on reauthorization of the Commodity Futures Trading Commission, which oversees U.S. futures markets. Congressional renewal of the regulatory agency is required every few years.
CFTC Chairman Gary Gensler has suggested lawmakers wait until his agency finishes writing rules to implement the Dodd-Frank financial reform law, said Rep. Collin Peterson of Minnesota, the Democratic leader on the House panel.
"I think he's got a good point," said Peterson. He said Gensler estimated the final rules would be issued in five to six months.
Lucas declined to say what changes he might seek as part of CFTC reauthorization. Previously, he has said that the CFTC sought too much power through its Dodd-Frank rules and demanded overly rapid change in the industry.
The Dodd-Frank Act, signed into law in 2010 in response to the 2008-2009 global financial crisis and late-2000s recession, brought federal regulation to the mammoth market in derivatives, hybrid instruments that meld stocks and futures.
SPENDING CUTS, BUT HOW BIG?
Farm-state lawmakers expect that congressional leaders will order larger spending cuts in the five-year farm bill that otherwise would cost $500 billion, with the bulk of the money going to food stamps.
The scope of the cuts could be determined by modifications to the $1.2 trillion in cuts in federal spending that are due in early March, as well the budget baseline issued in March and federal debt ceiling. The House voted on Wednesday to delay until May 19 a decision on the debt limit.
With fiscal austerity on the horizon, the Senate passed a farm bill last year with budget cuts of $23 billion, half of them from crop subsidies. The House Agriculture Committee proposed $35 billion in cuts, half from food stamps, in its version. Some analysts expect larger cuts will be ordered this year.
An election-year deadlock prevented the House from voting on the farm bill, so Congress extended the now-expired 2008 farm law until September 30, 2013. The extension includes another round of the direct-payment subsidy, which costs about $5 billion a year and is made regardless of need.
Some farm groups have derided the failure to pass a new bill as layering uncertainty onto the agriculture sector.
However, "there doesn't seem to be much" demand for a bill in the countryside, said Peterson. "It's not on their radar. As long as they have crop insurance and prices are good, they can live with" the one-year extension of the 2008 law.
This is the first time Congress started work on a farm bill in one session and was forced to reintroduce it in the following session, congressional researchers say.
(Reporting by Charles Abbott; Editing by Ros Krasny)
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