Agricultural News
President Obama Goes After Big Cuts in Direct Payments- Again
Tue, 15 Feb 2011 6:02:00 CST
Unveiling his $3.7 trillion federal budget for fiscal 2012 Monday, President Obama said his budget proposal "puts us on a path to pay for what we spend by the middle of the decade." Key to this budget path is the President's decision to freeze annual domestic discretionary spending for five years, cutting the federal deficit by some $400 billion over the next decade. Obama said this will reduce domestic spending "to its lowest share of our economy since Dwight Eisenhower was President."
In the case of agriculture, it's not a spending freeze, but rather very significant budget cuts that the Obama Administration is seeking. Direct Payments, Conservation Programs and the Crop Insurance Program all would be cut in a very substantial way. All told, President Obama's fiscal 2012 USDA budget request cuts four-billion dollars in discretionary spending from the fiscal year 2011 request - and more in total spending.
To see the full USDA Budget blueprint offered by the Obama Administration- click here for the 132 page document.
We have an audio overview of the USDA portion of the budget- which includes comments from Ag Secretary Vilsack and reaction in a statement from kansas Senator Pat Roberts. Click on the LISTEN BAR at the bottom of this story.
Meanwhile, Agriculture Secretary Tom Vilsack made the following statement Monday on the proposed FY 2012 budget:
"President Obama and I share a vision for building an economy that works for all Americans; one that makes, creates, innovates and expands the middle class.
"Since coming to office, we have taken important steps to avoid the potential economic collapse, turning around the economy to create private sector jobs each month for the past year. At President Obama's direction, USDA focused on stimulating growth, creating jobs, and setting in place a framework for a robust future for the rural economy: investing in new technologies like broadband, opening new markets for agricultural producers, supporting production of renewable energy and making better use of our natural resources.
"But as President Obama said in his State of the Union address, these are challenging times. We face tough competition from countries around the world. We need to step up our efforts and get serious about winning the future.
"Our goal must be to lay a foundation for sustainable economic growth and job creation by out-educating, out-building, and out-innovating our competitors. At the same time, we cannot ignore growing deficits accumulated over the past decade through increased spending and tax cuts without offsets. To afford the strategic investments we need to grow the economy in the long term while also tackling the deficit, this budget makes difficult cuts to programs the President and I care about. It looks to properly manage deficit reduction while preserving the values that matter to Americans.
"USDA already showed our commitment to deficit reduction by providing $4 billion last year to help pay down the debt through negotiation of an agreement with crop insurance companies. Our proposed FY 2012 budget cuts discretionary funding to $24 billion, about $2 billion below our FY 2011 request.
"In this budget, we are cutting programs not because we want to, but because we have to. American families have been forced to tighten their belts and government must do the same. The budget fulfills the President's pledge to completely eliminate earmarks. We are promoting good government and streamlining agency operations in a host of programs. And we have reduced or terminated selected programs.
"In the end we must cut to grow. And we are working to do it as responsibly as possible for American agriculture and the American people.
"At the same time, we are making investments to lay a foundation for a successful future for agriculture and for the American people. This budget includes targeted investments and program increases in key areas to support job creation and economic competitiveness. We will invest in research to spur innovation, promote exports, support renewable energy and conservation, and enhance critical infrastructure in rural communities.
"We are proposing some targeted reductions in farm program payments which would save $2.5 billion over 10 years, while only affecting 2 percent of participants. These savings would come on top of earlier work to institute procedural improvements that reduced the error rate in payments from 2 percent to under 0.1 percent, as well as a partnership with the IRS to eliminate improper payments to high-wealth individuals. At the same time, we are pursuing strategies to grow the next generation of farmers.
"Just as importantly, this budget pursues priorities that will spur job creation and innovation in rural America.
"Increasing exports is critical to growing our economy every billion in increased exports supports 8,000 American jobs. To support President Obama's National Export Initiative, we will provide an additional $20 million to help expand agricultural trade.
"To promote the domestic production of renewable energy, we invest in renewable energy programs related to commercialization; research and development; education and outreach; and energy efficiency and conservation. We are also focusing our loans to rural electric cooperatives to support the development of clean burning low emission fossil fuel facilities and renewable energy deployment. Developing a nation-wide renewable energy industry will create hundreds of thousands of jobs in rural America, while helping us reduce our dependence on foreign oil, and reducing risks to our environment.
"Overall, we propose cutting our Rural Development budget by $535 million, reflecting targeted reductions and eliminations of programs. The most important thing we can do to support thriving rural economies is to provide credit to entrepreneurs and communities which is why we will better target our investments to high growth rural businesses. And to out-build rival nations and at no cost to the taxpayer we are more than tripling our direct loan support to help communities build and repair hundreds of hospitals, libraries, and police and fire stations.
"Our budget also recognizes that successful and effective rural economic development will occur on a regional basis. Rural communities have different attributes, and when they find ways to connect and cluster their economies geographically and based on these strengths they are able to efficiently increase productivity and build more robust, sustainable economies. Despite the overall reduction in funding, our budget for Rural Development works through existing programs to fund regional pilot projects, strategic planning activities, and other investments to improve rural economies on a regional basis.
"To reform USDA so it's leaner, more efficient and ready for the 21st century, we will support efforts to better streamline operations and deliver results at lower cost for the American people. While many of our payment programs are operating at historic levels of accuracy, this budget continues to support efforts to reduce improper payments. We have cut $80 million in administrative expenses from across the Department including travel, shipping, printing, advisory contracts and supplies. This budget establishes a training program to help our procurement officers make the best use of taxpayer dollars. It looks to reduce staffing in areas that are seeing program cuts, or where we have created new process efficiencies. We are also seeking to recover the cost of operating a number of programs by collecting user fees from those that directly benefit from the services being provided. And we invest in IT to moderniz e critical systems in our Farm Service Agency, Natural Resources Conservation Service and Rural Development agencies.
"This budget will help drive innovation by investing in basic and applied science. While we have eliminated all earmarks in our research programs saving $183 million we have proposed a 24% increase in funding for our competitive grants program to support the most worthy projects. Our in-house research programs are re-directing nearly $59 million to higher priority research areas like agricultural production, food safety, and building a green economy.
"We are also focused on raising a healthier generation of young people who will enter our classrooms ready to get the world-class education they'll need to out-compete the rest of the globe. This budget ensures that all of America's children have access to safe, nutritious, and balanced meals. It fully funds the expected participation in all the Department's major nutrition assistance programs including WIC, the National School Lunch Program, and SNAP and the improvements implemented in the Healthy, Hunger-Free Kids Act. It restores the SNAP benefit from the Recovery Act. It also makes appropriate investments to help us continue to improve the safety of the food Americans eat each day.
"This budget increases support for various Farm Bill conservation programs, including CRP, on 335 million acres an average increase of 20 million acres annually since 2009. These programs provide critical benefits to the American people, filtering our water, cleaning our air and improving our wildlife habitats. For our National Forests, this budget improves the ability to restore forest resiliency and health, while supporting sustainable economic development and job-creation essential to growth in rural America.
"All told, this budget takes important steps to grow the economy while taking our responsibility for our deficit. The targeted investments we are making will be critical to building a robust economy for years to come. There are serious trade-offs in this budget, but by focusing on programs with the greatest potential to drive innovation, build critical infrastructure, and generate job growth, we will set this nation on a path to out-compete our rivals and win the future."
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