Debt Debate Settled For Now
August 2, 2011
July was a very challenging month in Congress, where partisan battling over government spending was the only game in town. The federal debt ceiling and budget reduction debate continued until the final hours, almost literally. But the House of Representative finally passed a package of spending cuts yesterday, hours before the August 2nd deadline for increasing the debt threshold. The Senate is expected to vote today, Tuesday, on the House-passed version and send it to the White House for President Obama’s signature.
The bill includes nearly $1 trillion in deficit reduction, while allowing the President the authority to increase the debt limit by at least $2.1 trillion, eliminating the need for further increases until 2013. A bipartisan committee must accept or identify an additional $1.5 trillion in deficit reduction by November 23, 2011. These cuts may include entitlement program reductions, and also tax reforms.
The plan would result in $21 billion in cuts in its first year. Time and again, members of Congress have called for cuts to agricultural programs. The best-case scenario appears to be $11 billion in agriculture spending cuts over the next 10 years. This will require real and significant farm policy reform that will impact direct payments and conservation programs.
NMPF’s dairy policy reform, Foundation for the Future, was written in order to provide a better safety net to dairy producers while staying within the current budget baseline, with likely savings of more than 10% over 10 years.