Bloomberg News

Farm Bill Passes House With $8 Billion in Food-Stamp Cuts

January 29, 2014

Farm Bill With $8.6 Billion in Food-Stamp Cuts Passes U.S. House

Cotton harvesting in East Carroll Parish, Louisiana on Oct. 10, 2013. The farm bill governs farm subsidies, which encourages planting of soybeans, cotton and other crops. Photographer: Ty Wright/Bloomberg

The U.S. House passed and sent the Senate a much-delayed bill to set agricultural policy for five years, as rural Republicans and urban Democrats overcame objections about farm subsidies and food-stamp cuts.

The Republican-led House voted 251-166 for the so-called farm bill, which would cost $956.4 billion over a decade. Senators predicted passage in their chamber, ending a tortured journey for a traditionally popular farm measure that House Republicans rejected last year in defiance of their leader, Speaker John Boehner.

The plan, which the Congressional Budget Office estimates will cut spending by $16.6 billion over 10 years from current levels, reflects the clout of rural and urban allies who kept farm subsidies and nutrition programs together over Republican objections. Supporters said the bipartisan bill showed differences can be bridged. Opponents said the bill was rushed.

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“Many criticize us and this body for being dysfunctional,” Republican Representative Frank Lucas of Oklahoma, the House Agriculture Committee chairman who led negotiations on a final package, said. “I hope this reflects a change in how we do our business here across the board.”

Senate Majority Leader Harry Reid yesterday predicted the plan, a compromise between competing versions passed by the two chambers, will pass the Senate, which could take up the measure as soon as this week. President Barack Obama would sign the version passed by the House, White House spokesman Jay Carney said today.

Senate Poised

The legislation governing U.S. Department of Agriculture programs emerged after more than two years of debate, with some lawmakers seeking to use the measure to curb spending and end subsidy programs.

The farm bill is the third bipartisan deal taken up by the current Congress, which passed a budget last month and cleared a $1.1 trillion spending bill on Jan. 16. The measure today picked up 65 Democratic votes from last year as cuts in food-stamp spending were reduced. Bill backers won 89 Democrats, compared with 24 in June. Republicans against the bill, 63, were about the same as a year ago, 62, when Boehner urged his caucus to support the measure.

The support of Democratic leaders, who opposed the House bill last year, and backing from members of the Congressional Black Caucus helped provide the majority, said Representative Collin Peterson of Minnesota, the top Democrat on the House Agriculture Committee.

19-19

The black caucus, representing mostly urban constituencies, split 19-19 with three not voting. The caucus was unanimously opposed last year.

The bill would cut food-stamp spending by $8.6 billion over 10 years, though additions to other programs bring nutrition-aid cuts down to $8 billion -- one-fifth of the $40 billion sought by Republicans and fought by Democrats and food retailers. The reduction would equal about 1 percent of the program’s record $79.6 billion in spending for the budget year that ended Sept. 30.

“It was the right decision to vote for legislation that prevents devastating cuts,” Democratic Representative Marcia Fudge, an Ohio Democrat and chairwoman of the black caucus, said in a statement after the vote, calling the reductions “a difficult compromise to accept.”

15 States

The reductions, unlike the earlier House plan, don’t kick anyone off the program, crucial to gaining her support, she said. “It’s worth noting that two-thirds of all states, including Ohio, will not be affected by this change,” she said.

Fifteen states and the District of Columbia would be affected by the reductions.

The law would tighten a program that let states give residents as little as $1 a year in heating assistance to qualify them for an average of $1,080 in additional nutrition aid. The bill increases the “heat and eat” threshold to $20. Other provisions that may have made 1.8 million people ineligible for food stamps were rejected.

Democrats accepted food-stamp reductions because changes in eligibility were avoided and the $1 for food aid was hard to defend politically, said Parke Wilde, a nutrition-policy professor at Tufts University in Boston.

‘Best Deal’

“The cuts are much smaller than they were last year, and the one area where there was a huge cut was an area that was a mechanism people didn’t support all that strongly anyway,” Wilde said. “In the past few months, people have been educated about where the fault lines lie on this issue, and many Democrats accepted what they thought was the best deal they could get.”

About 47.4 million Americans used the program in October, the most recent month available, the U.S. Department of Agriculture said Jan. 10. Lower payments for struggling families will only aggravate inequality and poverty, said Representative James McGovern of Massachusetts, a Democrat who voted against the bill, before the floor vote.

“Many would like this whole farm bill issue to go away,” said Still, “the people who will be hurt by this bill won’t go away,” he said. “This bill will make hunger worse in America, not better.”

Kroger, Bunge

The bill governs farm subsidies, which encourages planting of soybeans, cotton and other crops by lowering costs for commodity processors including Bunge Ltd. The legislation subsidizes crop-insurance provided by companies such as Ace Ltd. (ACE:US) and funds purchases at Kroger Co. (KR:US) and other grocers with food stamps, its biggest cost.

Total savings would be $23 billion over 10 years, higher than the budget-office estimate, after automatic cuts in all federal spending tied to an earlier budget deal are included, according to agriculture committee staff.

Crop-growers facing loss of $50 billion in subsidies retained about two-thirds of it through other aid, according to the Congressional Budget Office. Conservation initiatives would lose $6 billion, largely through consolidation of existing programs, according to the committee. Crop insurers that paid out $17 billion after the severe 2012 were largely unscathed.

The bill ends the possibility, for at least five years, of U.S. farm policies reverting to a 1949 law that would potentially double milk prices.

Lobbying Efforts

Final passage in the Senate would bring to an end the agriculture community’s toughest legislative fight in almost two decades.

Farm bills have fared better in that chamber, which approved plans in 2012 and 2013 that ran into trouble in the House. While some lawmakers including Senator Pat Roberts of Kansas, a former chairman of the House Agriculture Committee, have announced opposition, the path to approval seems smooth, said Burdett Loomis, a political science professor at the University of Kansas in Lawrence.

“It’s going to pass the Senate,” he said. “This is a huge bill that has been thoroughly legislated, it passed the House by a decent margin, and it’s been worked on for a long time.”

At least 350 companies and organizations, including Monsanto Co. (MON:US), PepsiCo Inc. (PEP:US) and Dean Foods Co. (DF:US), registered as lobbyists in 2013 to work on the Senate bill, spending $150 million, according to the Center for Responsive Politics. Only bills on the federal budget, immigration and defense generated more lobbying interest, according to the center, a Washington-based research group that tracks campaign donations.

Vote Scorecards

Opponents said that, after debate dating to budget negotiations in late 2011, the bill’s passage has come too quickly to examine the legislation that is more about political clout than sound policy.

Club for Growth and Heritage Action, which back smaller government and lower taxes, both alerted lawmakers they would include the vote on scorecards used to evaluate congressional candidates, encouraging them to vote against the plan.

“The ‘farm’ bill means more expenses for taxpayers and higher costs for consumers,” Heritage Action said in its release yesterday designating the bill a “key vote.” “It means more unnecessary government dependence for wealthy farmers and food stamp recipients.”

The bill is H.R. 2642

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net


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