It is being billed as a budget that meets USDA's most important priorities while exercising the “fiscal discipline” needed to meet President Bush's goal of balancing the budget in five years.
But the chairmen of the Senate budget and agriculture committees say the budget proposal announced by Agriculture Secretary Mike Johanns Feb. 5 is rife with “debt and deception and continues to move America in the wrong direction.”
The truth, as usual, probably lies somewhere in between, and it will be up to Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, and Rep. John Spratt, D-S.C., chairman of the House Budget Committee, and their colleagues to write a budget that makes sense of the country's current fiscal condition.
“The president's agriculture budget provides important resources that are necessary to promote economic opportunities and to preserve our commitment to our farmers, ranchers, rural citizens, and families in need,” Johanns said in a statement outlining the USDA portion of the administration proposal on Feb. 5.
“This budget aims to enhance our country's vibrant ag economy, advance renewable energy, protect America's food supply, improve nutrition and health, and conserve our natural resources.”
Johanns said the 2008 budget reflects the president's priorities to encourage economic growth and increase national security. “It also reflects the president's goal to keep spending under control and achieve a balanced budget,” he noted.
Conrad, who has become one of the administration's most vocal opponents on ag and budget issues since moving into the budget committee chairmanship, accused the administration of subterfuge.
“The president is trying to wrap himself in the mantle of fiscal rectitude, showing a budget that claims to reach balance by 2012,” he said. “But this is achieved only by leaving out large expenses. While the president has done a better job this year of accounting for near-term war costs, his budget again fails to include full out-year war costs or the cost of Alternative Minimum Tax reform beyond 2007.”
Agriculture Committee Chairman Sen. Tom Harkin said the budget represents a “big disconnect” from the values and needs of the American people.
“The administration's budget contemplates spending an additional $100 billion on the war in Iraq, bringing the total spent to nearly $550 billion,” said the Iowa Democrat. “Americans have said loud and clear that the cost of this war has been too high.”
Spratt said the president's budget will remain in deficit every year it covers despite his having endorsed the goal of a balanced budget. The deficit for fiscal 2006 was $248 billion, “and deficits will hover in that range over 2007, 2008 and 2009.
“The president calls for nearly $2 trillion in tax cuts, so in the name of balancing the budget by 2012, he cuts domestic priorities such as health care, education and the environment,” said Spratt.
Johanns said the administration's budget plan is tied to the comprehensive set of farm bill proposals, announced by the administration on Jan. 31, that include revising the CCC loan programs and shifting the funding to increased direct payments for farmers.
Beginning in 2008, the budget incorporates a $500 million increase each year in the Commodity Credit Corp. estimates to accommodate the cost of new farm bill proposals to be allocated among the various titles of the bill, Johanns said.
The administration proposes to spend $89 billion on USDA in 2008, roughly the same amount projected for 2007. About 75 percent of expenditures, or $67 billion in 2008, will be for mandatory programs that provide services required by law, which include many of the nutrition assistance, commodity, export promotion and conservation programs.
USDA's discretionary programs account for the remaining 25 percent or $22 billion in 2008, about the same level as 2007. Those programs include Women, Infants and Children; rural development loans and grants; research and education; soil and water conservation technical assistance; management of national forests and domestic marketing assistance.
As with past budgets, the administration begins its spending list with a proposal for funding the multi-agency Food and Agriculture Defense Initiative. The $325 million earmarked for fiscal 2008 represents a $148 million increase for USDA “to continue improving the safety and security of America's food supply and agriculture.”
Funding increases include: $36 million to strengthen responses to food emergencies, related training, and research for food defense; $35 million for research to improve animal vaccines and facilitate rapid response to agricultural threats; and $77 million to enhance surveillance and monitoring of pest and disease threats and to improve response capabilities, and other efforts.
In addition, the budget includes an increase of $16 million to design a new Consolidated Poultry Research Facility in Athens, Ga., which will be the department's premier center for conducting critical research on exotic and emerging avian diseases that could have devastating effects on animal and human health.
Next up, the USDA budget proposal lists funding to support the development of renewable energy resources and commercialization activities to help meet the president's goal of reducing gasoline usage by 20 percent by 2017.
The budget includes $397 million for energy projects, an increase of $161 million over 2007. Of this increase, $132 million is for Rural Development renewable energy investments through guaranteed loans and grants, and other efforts.
The remaining increase of $29 million supports research and development activities to enhance bioenergy feedstocks and improve conversion technologies for cellulosic ethanol. The proposal does not include the $1.6 billion request for new funding cited in the administration's 2007 farm bill proposals.
USDA's farm support programs receive mandatory funds from CCC. Under current law, CCC expenditures are estimated to decline from $20.2 billion in 2005 and 2006 to $13 billion in 2007 and $12 billion in 2008 due to higher commodity prices.
Johanns said the budget fully funds the expected requirements for USDA's three major nutrition assistance programs: Food Stamps, Child Nutrition and WIC, which combined account for over $56 billion.
Food Stamp participation is projected to decline from 26.3 million in 2007 to 26.2 million in 2008. The budget of $37 billion includes resources to fully fund estimated Food Stamp participation. The budget also provides a $3 billion contingency fund should actual costs exceed the estimated level.
The administration's 2008 budget includes nearly $4 billion to provide conservation financial and technical assistance on a cumulative total of 215 million acres. The largest of these programs is the Conservation Reserve Program, estimated at just over $2 billion in 2008.
Funding for the Environmental Quality Incentives Program will be maintained at $1 billion in 2008.
The budget proposes over $455 million for the Wetlands Reserve Program, an increase of $191 million, or nearly 72 percent over 2007. The projected WRP enrollment for 2008 would be the largest ever, involving up to 250,000 acres, and will bring the total acreage enrolled in the program to 2.28 million acres, the maximum level authorized by the 2002 farm bill.
Funding for the Conservation Security Program in 2008 is estimated to be $316 million, which Johanns said will be an increase of $57 million, to continue support to the more than 19,000 contracts signed in prior years.
The 2008 budget also proposes $825 million in discretionary funding for on-going conservation work. This supports programs providing high quality technical assistance to farmers and ranchers to address their most serious natural resource concerns.
Critics said the administration budget proposals are inconsistent with the increases Johanns listed in announcing the administration's farm bill blueprint on Jan. 31.
“The secretary proposed increasing funding for the Conservation Security Program and the Environmental Quality Incentives Program by a combined $475 million a year,” said Ferd Hoefner, policy director for the Sustainable Agriculture Coalition.
“Today, the White House proposed a cut in these two programs of $430 million — $160 million from CSP and $270 million from EQIP. We are left to ask: Will the real White House farm bill proposal please stand up? In last year's budget, the White House proposed keeping the CSP uncapped, making today's turnaround doubly surprising.”
Hoefner said that for the second year in a row the administration is proposing to fully fund the Wetlands Reserve Program, but that it appears to want to reduce the funding for the Value-Added Producer Grants program from $40 million to $15 million.
The 2008 budget includes nearly $15 billion in program level funding for rural development programs. The 2008 budget proposes to align USDA's single-family housing program with other similar federal programs by shifting from direct to guaranteed loans.
Further, the 2008 budget includes $567 million for the rural rental assistance payment program to protect the rents of low-income tenants of its multi-family housing portfolio. The budget also includes $1.3 billion for financial and technical assistance for rural business and $4.8 billion for electric and telecommunications loans.
The budget requests $2.4 billion to support the USDA research program. For 2008, the budget continues to emphasize the use of competitive grants through the National Research Initiative and the Hatch and McIntire-Stennis programs. As part of USDA's efforts to increase emphasis on competitive grants, over $400 million of Congressional earmarks are not funded.
The budget increases funding for high priority bioenergy research aimed at improving the efficiency of converting cellulose to biofuels. Research is also an important component in key budget initiatives for avian influenza, food and agriculture defense, and emerging diseases in crops and livestock.
Finally, the budget also includes the funding required to conduct the 2007 Census of Agriculture.
Johanns said additional information regarding the fiscal 2008 budget proposal is available on the web at http://www.usda.gov/budget.