Mike's Blog

Insights from the President of ProAg

“What’s Next”

by Mike Connealy on 11.12.2012

Having pondered the 2012 election outcome for five days and having read the various post-mortem on how it all went down, then the key question for those of us in crop insurance is “what’s next” ?

We noted in the weeks before the election that this was a “do nothing” Congress that stalled out the 2012 Farm Bill on the House side, choosing not to bring up the Committee version of the Farm Bill due to a lack of votes to pass it.

The election results seem to settle little or establish a new direction. The people chose to re-elect President Obama, keep the Senate in Democrat control and keep the House under Republican leadership. The people have voted for “more of the same” over the next two years.

Pundits on the Democrat side have used the term “mandate” as regards the re-election of President Obama when discussing the need to raise taxes on the wealthy for necessary tax revenue with the upcoming fiscal cliff. Conservatives counter with the apparent “mandate” from the voters against tax increases via the Republican control of the House. The Senate is not filibuster proof at 55-45, so in order for anything to pass in the Senate, it would appear that a compromise will be needed.

The current “do nothing” Congress reflected the inability (often refusal) to compromise in any manner. The polarization along party lines in both the House and Senate does not seem to have been resolved in the election.

The fiscal cliff issues dwarf the Farm Bill and other pending issues in Congress. While the implications of going over the cliff are perhaps overstated, there is no doubt that a certain amount of chaos will result if the “do nothing” Congress fails to find a solution.

My guess is that we could see a short term Farm Bill wrapped into a short term fiscal cliff solution. This means that talks of a “grand bargain” on the fiscal cliff will give way to a short term fix that allows the issue to be kicked down the road with something like a September 30, 2013 deadline for a hopefully final resolution.

This would include a “spending cuts target” for the future Farm Bill, probably greater than the $23 billion in the Senate bill and less than the $35 billion in the House Bill. This would also open up all items in the Farm Bill for potential cuts, including crop insurance.

This is all merely speculation by MC based upon my attempt to read the tea leaves and forecast the future based upon the past work of mostly the same people. Perhaps the House leadership will surprise me and bring the Committee version of the Farm Bill on to the House floor for debate and passage. If so, we could see a conference with the Senate and perhaps they “pull a rabbit out of the hat” in the form of a final Farm Bill.

Questions or comments are welcome.


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