Congress agreed to extend the payroll-tax cut without finding spending offsets, the problem that had plagued the negotiations since late last year.
The Senate Agriculture Committee held the first of four farm bill hearings this week, gathering information to be used in the development of the next 4-year bill to replace the 2008 farm act that expires this year. Both Senate Agriculture Committee Chairman Debbie Stabenow (D-MI) and House Agriculture Committee Chairman Frank Lucas (R-OK) have indicated that the cuts to the crop insurance program outlined in the president’s budget are unacceptable.
Most observers agree that it will be difficult for Congress to pass a new farm bill before the elections this fall. And yet, a group of 82 very diverse groups sent a letter to Congress this week opposing an extension of the current farm bill. The letter says the farm bill is one of the most important pieces of legislation being considered this year and shouldn’t be delayed.
Congress could save $2.5 billion per year by turning the crop insurance programs over to USDA’s Farm Service Agency according to the National Association of FSA County Office Employees (NASCOE). But the insurance industry counters that the program is far more efficient and farmers have gotten better service since crop insurance was privatized in the 1980s.
With the likely phase-out of some of the current farm programs the transfer of the crop insurance program would help justify county FSA offices in the future. Congress probably won’t go along with the proposed change since crop insurance is expected to be the critical component of the next farm bill.