Farm Talks Open With Optimism (via Politico)

Ending years of painful delays, House-Senate talks began on a new farm bill  Wednesday, with renewed promises to finally complete the task by the end of  December.

“We can do it, we have to do it,” said House Agriculture Committee Chairman  Frank Lucas (R-Okla.) “There are 16 million men and women whose jobs rely on the  strength of agriculture,” echoed his Senate counterpart, Debbie Stabenow  (D-Mich.). “I am confident we won’t let them down.”

It wasn’t quite crossing the River Jordan, but it was a huge  sigh of relief nonetheless for Lucas after battling his party leadership to get  to this point. Now, in conference, he can be more his own man. And if he and  Stabenow can craft a compromise in the next two months, Speaker John Boehner  (R-Ohio) would be hard-pressed to deny him a final vote on the House floor.

“We’re hopefully at the beginning of an end to the process,” said Rep. Collin  Peterson (D-Minn.), the ranking member on the House committee. And Lucas heard  encouraging words from his old House mentor, now-Sen. Pat Roberts (R-Kan.).  “We’re going to lose our credibility if we don’t get this bill done,” Roberts  said. “We have to get this bill done.”

The nutrition title remains the single biggest dividing point, and this is  the arena where Peterson believes that President Barack Obama’s intervention  might be helpful. But as the debate has dragged on, events outside Congress have  already begun to change the landscape.

Millions of families will be affected by scheduled food stamp cuts taking  effect this Friday, Nov. 1. And more governors are independently ending waivers  that have allowed able-bodied adults without dependents to continue to get  benefits without meeting work requirements.

The House voted last month to repeal this waiver authority permanently as  part of its $39 billion package of 10-year savings from food stamps. But states  like Ohio and Wisconsin are already proceeding within existing law, and the  bigger impediment might be the $20 million cap now on federal funding for states  that pledge to provide job training or work slots for those who genuinely can’t  find employment.

Kitty Rhoades, Wisconsin’s secretary of health services, told POLITICO:  “We’re out here doing our own thing.”

The benefit cuts this week close a contentious chapter in which Obama  temporarily increased monthly assistance levels in 2009 as part of an effort to  stimulate the economy. Because the dollars are quickly recycled into the  economy, food stamps are an effective tool for this purpose, but critics would  argue that the increase in benefits also contributed to a spike in enrollment  and went beyond the program’s core mission of feeding the hungry.

The administration had hoped to phase out the benefit increase gradually over  time, and indeed, this has been happening already. But under pressure to come up  with savings, Congress has twice voted to expedite the schedule and the result  has been the abrupt drop-off this week.

For a mother with two children, it will mean a $29 — or 6 percent — cut from  the current $527 per month maximum benefit. In the current fiscal year, the  reduction will save an estimated $5 billion and an additional $6 billion spread  over the next few years.

In her opening remarks, Stabenow seized on this point, saying the $11 billion  in savings should be added to the equation measuring the new food stamp cuts in  both bills. “That $11 billion plus the $4 billion in cuts in the Senate bill  means that accepting the Senate nutrition title would result in a total of $15  billion in cuts in nutrition,” she said.

Wednesday’s ceremonies were held on a grand stage: the gilded House Ways and  Means Committee hearing room with its sculpted eagles. But the process is  expected to shift quickly to backroom meetings of the four top members: Lucas,  Peterson, Stabenow and Mississippi Republican Thad Cochran, the ranking member  of the Senate panel and a former Agriculture Committee chairman.

Peterson is hopeful that these meetings can step up and continue through the  upcoming recess. “We need to get at this or we’re not going to get this done,”  he told reporters. And in a short news conference following the conference  session, both Lucas and Stabenow signaled a willingness to do so.

“We’re working every day and every way,” Lucas said. “We will keep working  and we have been working,” said Stabenow.

Indeed, the two sides have been swapping ideas to better align the House and  Senate commodity titles and reduce the cost of rival revenue insurance plans to  protect against shallow losses.

The House has shown a willingness to scale back the subsidy rate for its new  Supplemental Coverage Option while increasing the minimum deductible from 10  percent to 15 percent. Under this approach, the same 15 percent deductible rule  would apply as well to the Senate’s favored initiative — Agricultural Risk  Coverage — which is now triggered after losses of just 12 percent.

No decisions have been made, but the choices illustrate some of the  difficulties facing lawmakers as they try to craft a new safety net to replace  the current system of direct cash payments that will be ended under both  bills.

The Senate is much more driven by corn and soybean interests allied with  Midwest Republicans, and its bill invests most heavily in ARC, which favors  these crops. The House measure reflects more Southern agriculture and the  mind-set of Lucas, whose own farming history makes him more sensitive to real  market failures — not just shallow revenue losses.

In general, Southern growers have not enjoyed the same boom as the Midwest,  where land prices have soared with the demand for ethanol. SCO offers a cheaper  version of revenue insurance to help these farmers who typically don’t buy  high-end coverage. And it would be paired by the House with a significant  countercyclical program tied to target prices important to rice and peanuts.

“We’ve always been fair and reasonable to each region when it comes to the  differences in crops. We’ve let the region pick their own approach,” said Sen.  Saxby Chambliss (R-Ga.), who is sympathetic to the House plan. “I’m not going to  tell conferees who represent major Midwest states what they need. And I would  expect when it comes to cotton, rice and peanuts that we have the opportunity  that plays up something that works.”

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