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Mike's Blog

Insights from the President of ProAg

Unfinished Business

by Mike Connealy on 09.25.2012

As expected, the US House of Representatives has left Washington DC and returned home for the election season. This version of the House has been labeled as a “do nothing” group and they did not disappoint the many Congressional naysayers. The “fiscal cliff”, sequestration, and the 2012 Farm Bill are all in the “unfinished business” column for this erstwhile band of “do nothing” brethren.
 
The Farm Bill passed out of the House Ag Committee (HAC) was stopped short of a full House vote by the Majority Leader (Eric Cantor) as both he and the Speaker (John Boehner) were unable to “whip” up enough votes from the Republican Party members to assure passage.  This will be an election item in several House and Senate races in rural states. Basically, the House Leadership left several Republican HAC members such as HAC Chairman Frank Lucas, Kristi Noem of South Dakota and Steve King of Iowa twisting in the election year wind. It will not surprise me if Members lose seats over this inaction. 
 
The core issue on the House Republican side appears to be that not enough cuts were made to SNAP programs (Food Stamps) and that the general level of spending in the HAC version of the 2012 Farm Bill was just too high. This despite the fact that the full Senate passed version of the 2012 Farm Bill included more SNAP spending and more overall spending. So, the House leadership deferred to a commitment to bring it up during the “lame duck” session after the election. (The term “lame duck” originated in 18th century England and referred to waterfowl that has been wounded by gunfire or some other hunting method,  and was now susceptible since they lacked the necessary power to escape). 
 
The logic escapes me how “lame duck” members – many of whom are in their last few days of office – will consider and pass a five year Farm Bill. If President Obama is re-elected, the chances that House Republicans can implement stricter spending provisions for SNAP and not see a veto are slim and none. So, the House Republican leadership’s bet is that Obama is not re-elected, the Senate flips from Democrat to Republican majority, and the Republican House majority returns intact. A trifecta, if ever there was one !
 
Now if the trifecta does occur, the “lame duck” Farm Bill would not be needed, just wait for the new President and new Congress to be seated and legislate as they think best. The so called commitment for passage during the “lame duck” appears to be designed to allow “cover” for Members such as those named above. Apparently, it is better than admitting that we are a “do nothing” group, as shown by our actual record. 
 
The House did pass a “continuing resolution” (CR) which is designed to keep the government operational for six months (October of 2012 through March of 2013). This awaits similar action from the Senate and a signature by President Obama. The CR bypasses the usual budget and appropriations work that Congress is supposed to do – it allows the “do nothing” group to not necessarily adversely affect US citizens for their continuing inability to deal with “the people’s business”.
 
Crop insurance continues under our reinsurance contract with the USDA. There is no interruption in claim payments or anything on the horizon – just business as usual. The sequestration risk is also minimal for crop insurance, again because of our contract with the USDA.
 
In summary, we now just watch and wait for the election, and see how the new cards are dealt out. This writer is not for a one year extension.  We need a five year Farm Bill, and let the chips fall where they may. It is time for “finished business” so everyone knows where we are going with crop insurance.  Hanging around in “limbo” does no one any favors.   
   
Lest anyone think that MC is too hard on the Republican leadership and perhaps biased toward the Democrat side of the equation, we provide recent remarks by President Obama on his view of the Farm Bill. Click here for this update. In my opinion, this sort of response would have been drafted by USDA leadership and Secretary Vilsack, long a consistent opponent to the private sector crop insurance players would have signed off.  Purposely ignoring the harsh cuts taken by companies and agents in the 2011 SRA and mindless of the impending and material 2012 drought underwriting losses, the Obama Administration makes sure that we get another “poke in the eye” as regards their view of the 2012 Farm Bill. 
 

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