House Passes Balanced Budget Bill

Both sides of the political aisle, the White House and both chambers of Congress this week traded jabs over how to avoid the looming sequestration deadline March 1.

The House last week upped the ante a bit by approving a bill to require the President to submit to Congress a “supplemental budget” that would describe when a balanced budget would be reached if his FY2014 budget does not erase the deficit. The White House missed its deadline of February 4 for submitting its budget to Congress, blaming confusion and uncertainty over sequestration for the delay.

President Obama last week told Congress he’d like to see a short-term “buy-down” of the mandatory spending cuts to give more time for Congress to work out a master plan, but both the House and Senate continue to contend they have plans to avoid $85 billion in across-the-board spending cuts this year.

“If Congress can’t get a bigger package done by the time sequestration is scheduled to go into effect, then I believe they should at least pass a smaller package” to forestall cuts for several months,” the President said from the White House, adding all previous Administration budget cutting offers are still on the table, including closing tax loopholes and changes to entitlement programs.

From an agriculture perspective, Sen. Debbie Stabenow (D, MI), chair of the Senate Agriculture Committee, confirmed in an interview that $5 billion in conventional farm program payments – still in place with extension of the 2008 Farm Bill – are prime targets for cuts as part of sequestration, and that whatever is done to agriculture as part of sequestration will be credited to her committee as savings as she begins mark-up of a new Farm Bill in April or May.

Overall, USDA’s share of the sequestration cuts would be about $2.5 billion over the last six months of the fiscal year. One news report said the Office of Management & Budget (OMB) pegs farm payment programs for a 7.6% cut, or about $470 million.

While crop insurance seems to be protected, the Risk Management Agency (RMA) which oversees the federal insurance programs, could be in for a $10-million cut. Secretary of Agriculture Tom Vilsack said last week his department would have to reduce the number of inspections at meat packing plants, but did not give further details.

While the President’s offer generated interest on both sides of the aisle, the House Republican leadership said the only way a short-term cut could happen is for them to surrender on their “no taxes” pledge – though the President did not mention taxes – and so far, they’re refusing to do so.

House Speaker John Boehner (R, OH) took political advantage of the President missing his budget deadline to hammer the Administration on “the President’s sequester.” Senate Majority Leader Harry Reid (D, NV) said the Senate will take up a still-evolving plan to be rolled out late next week to avoid sequestration, hopefully seeing final action the week of February 25.

Sen. John Cornyn (R, TX) said the measure could be part of a new continuing resolution to keep the government running at FY2013 levels through the end of the calendar year. The current continuing resolution expires March 27.

Stabenow, also a member of the Senate Finance Committee, said the measure could carry a $112-120-billion price tag and put off the sequestration cuts through the end of calendar 2013. The plan is expected to be “close to evenly divided” between spending cuts and tax increases, but one Senator told the paper a 100% revenue package or one that’s 80% revenue, 20% spending cuts would not get GOP support.