Since the beginning of the year, Washington has been consumed by transitional issues, including new members of Congress and the President Obama's cabinet, recovery from a bruising debate and negotiation over the fiscal cliff, and moving into the next round of negotiations over longer-term structural spending cuts.
Of course, a charged political atmosphere is further electrified by the president's proposals to address gun-related issues in the wake of the tragic elementary school shootings in Connecticut.
While the fiscal cliff negotiations addressed personal tax rates, it did nothing to reduce the nation's debt, and actually increased spending by adding $47 billion over 10 years. By locking down tax rates, anticipated revenues will drop $3.64 trillion over the next 10 years. Now comes the really tough part-cutting spending. Spending has to be cut, because for every dollar the U.S. government spends on programs, it borrows 31 cents to pay for them. That is simply not sustainable.
By now, you know that there are three critical events that require congressional action where the spending cuts can be debated. The first is to raise the debt ceiling. If this is not done, there will be multiple devastating impacts. For example, Social Security checks would no longer go out, and no one of either political party can take Social Security checks as a hostage in a debate over spending. As one former senior senator said, "Don't take a hostage that you can't shoot." So the real debate should not happen on the debt ceiling.
The second issue that happens at about the same time is the automatic sequestration-across-the-board cuts of $1.2 trillion, half from defense and half from domestic spending. No one on the Hill feels that a thoughtless cut is better than targeted cuts. This is where the debate over spending cuts should and must happen. It will require changes in entitlement programs (primarily Medicare and Medicaid, along with some tweaks in Social Security). You simply cannot fix the problem without addressing those massive spending areas.
The third major debate will be dealing with the continuing resolution that either allows the government to be funded after March 27 or shuts it down. This will once again be another opportunity to trim spending. All other congressional action pales in comparison to the debate over spending cuts.
These historic events will require leadership from the White House and will move first through the Senate, where it is much easier to get a compromise for a solution. Once the Senate votes, the issues will be handed to the House for acceptance by Democrats and moderate Republicans. So the political path forward will likely look much like how the fiscal cliff process played out.
Once these huge debates have played out and there is some level of certainty regarding funding for all areas of the government, including agriculture policy, then the House and Senate Agriculture committees can draft a bill within the new spending parameters. There are many ways to accomplish all of this, but at this time there is no clear path or process with any level of certainty.
The remaining key issues to be resolved for the farm bill are: 1) the total amount of cuts required; 2) the design of the commodity provisions (primarily peanuts and rice); 3) how much can be cut from food stamps; and 4) the dairy provisions. These are the biggest and most contentious issues, but they can be resolved to complete a bill this year.
As this process plays out, the U.S. beet and cane sugar industries have been and will continue to be in the political trenches to educate new members of Congress about the importance of a strong domestic sugar industry for the food security of our nation. A "no-cost" policy will certainly be helpful in these discussions.
Your grower leaders will be walking the halls of Congress in February and March to make sure our nation's policy makers understand the benefits of our industry and policy. We thank them for their dedicated effort to work on your behalf.