Concerns About President s Proposed Budget

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1 Concerns About President s Proposed Budget A compilation of recent s from NAWG and NBGA Friday, March 17, 2017 Preface - OWGL CEO Blake Rowe: Here is detail from this week s NAWG newsletter, and Dale Thorenson (works for barley) on the President s FY2018 budget. Remember this is discretionary spending and doesn t cover Farm Bill programs like Title 1 and Crop Insurance. Biggest hit is to EPA. Pretty big cuts to ag research, USDA county office staffing, NASS, and Food Aid program. Congress isn t obligated to follow the President s budget, but it does give us some insight into what the President wants for Ag. NAWG Expresses Concern about President s Budget Proposal NAWG Weekly Update: March 16, Today, President Donald Trump issued his first budget proposal, covering Fiscal Year 2018, America First: A Budget Blueprint to Make America Great Again. After reviewing the budget document, NAWG President David Schemm, a wheat grower from Sharon Springs, Kansas issued the following statement: While we re pleased that this budget outline doesn t include any cuts to crop insurance or Title 1 farm programs, we are very concerned about the impact that the deep discretionary cuts, particularly at USDA, will have on wheat farmers across the country, said Schemm. Many of the proposals in the budget blueprint would have an outsized impact on rural America, particularly the possible cuts to agricultural research and to USDA county offices. Given the rough economic conditions and perpetual low prices, now is not the time to make such drastic cuts. The budget blueprint, which is the President s recommendation to Congress about areas to prioritize funding, includes a reduction from the FY 2017 level of $22.6 billion down to $17.9 billion in discretionary spending, a 21 percent reduction, at the U.S. Department of Agriculture. NAWG is concerned about what these cuts could mean for wheat research, the functionality of farm programs resulting from cuts to NASS and USDA county offices, rural infrastructure programs, and anti-hunger programs like the McGovern-Dole International Food for Education Program. The blueprint also contains a 31 percent cut to the Environmental Protection Agency (EPA). While NAWG believes the EPA needs to be reined in, NAWG wants to ensure that the agency is funded at a level that allows for timely work on registration review of crop protection tools and evaluation of new products. Growers rely on EPA to evaluate the safety of crop protection tools and they need to do so in an efficient and effective manner. As the budget process gets underway, we will work with the House and Senate to ensure a common-sense approach to their proposals for FY18 Budget and Appropriations, said Schemm. We will also work with the Trump Administration regarding support for important farm safety net programs to ensure they are not subject to mandatory spending cuts or limitations as additional budget details are released this spring. Let s also remember the $23 billion in deficit reduction over 10 years that was generated by the 2014 Farm Bill. USDA programs generated budget savings and continue to do so, as shown by the recent Congressional Budget Office (CBO) estimate that the 2014 Farm Bill actually reduced spending by $100 billion over ten years. What s in the White House Budget proposal that impacts agriculture? Dale Thorensen, Atty, Gordley & Associates (for National Barley Growers Association) Donald Trump earlier today released his proposed FY2018 budget. The budget addresses only discretionary spending, which makes up more than a quarter of the budget. President Trump will propose a comprehensive budget in May, which could include changes to mandatory programs, including farm programs and crop insurance. By way of context, the White House has proposed a $54 billion increase in defense and homeland security spending, to be offset with reductions in domestic program spending and international assistance. The following is a look at how proposed spending cuts within those budget categories will affect agriculture most directly. USDA US farmers interact with USDA more than any other agency. The White House has put forward a $4.7 billion cut in the operational budget for the department for a total funding amount of $17.9 billion in FY18, down from $22.6 billion in This represents a cut of 21 percent, the third highest of any federal agency within the new budget. Programmatically, the cut is distributed among USDA s agencies and mission areas as follows:

2 Elimination of the McGovern-Dole International Food for Education Program Cuts to staffing at county USDA offices, although the budget declines to mention which agencies (NRCS, FSA, RD) would be targeted for staff reduction Reduced funding for NASS Funding of $350 million for agricultural research funded through the Agriculture and Food Research Initiative (AFRI), though this total is only half of the $700 million authorized in the 2014 Farm Bill, and below the $375 million proposed in the congressional appropriations bills Additionally, the budget would eliminate USDA s rural wastewater and water loan and grant programs, to consolidate with a similar program administered by EPA; and includes a $200 million cut in funding for the Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants and Children (WIC). Transportation The DOT oversees many of the needed infrastructure improvements across the country, and under the President s proposed budget, would be in line for a cut of $2.4 billion to a total of $16.2 billion in FY18. Within the overall reduction, the budget proposes the elimination of the TIGER discretionary grant program, which funds improvements to surface transportation systems. State Within the State Department, the work of the U.S. Agency for International Development (USAID) includes foreign food assistance, of which many commodities are used. Overall, State is targeted for a cut of $10.2 billion, for an FY18 total of $25.6 billion. Specifically, the budget calls for consolidation and reorganization between State and USAID, but does not elaborate. The budget also alludes to cuts to P.L. 480, also known as the Food for Peace program, but does not elaborate on those either. EPA The bearer of the most significant cuts by percentage is the Environmental Protection Agency, for which a cut of 31 percent, or $2.6 billion is proposed, for a total FY18 funding of $5.7 billion. Additionally, the budget has proposed a staff reduction of 3200 at EPA. Key budget proposals impacting agriculture include: Elimination of funding for the Great Lakes Restoration Initiative as well as programs within the Chesapeake Bay. Additionally, the budget proposes removing federal oversight of environmental protection violations by EPA from those programs not specifically delegated to states. Looking long-term at the budget numbers above, it s worth remembering that Congress writes and passes the budget, rather than the White House, and the president s proposed budget should be viewed more as an illustrative, political document, or a wish-list. Also, the cuts proposed in the FY18 budget are in discretionary programs, which are subject to congressional approval through the FY18 appropriations process. The administration has not yet released its proposals for entitlement programs. And from a previous , Thursday, March 16 th : Pasted below find the summary table for the skinny budget (attached) released by the Trump Administration this morning. Discretionary spending for USDA is proposed to be cut by 20.7 percent, or $4.7 billion from current spending levels which are at FY 2016 levels since FY 2017 spending has been authorized through a Continuing Resolution through April 28 th. Details of the cuts were scant, limited to 10 bullet points (pasted below the summary table), but did mention continued support for research, including $350 million for USDA s flagship competitive research program which presumably refers to the Agriculture Food and Research Initiative (AFRI); and $200 million in savings by eliminating the McGovern-Dole International Food for Education Program. A detailed budget is expected to be released in May. It should be noted that Administration Budget proposals are only requests to Congress, which ultimately decides spending levels.

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