President: Rae Chornenky

Editor: Maria Jeffrey

Some Things You Need to Know About the Farm Bill:

  • Yesterday, the Senate passed the Agriculture Reform, Food, and Jobs Act of 2013 (S.954, also known as the farm bill). The bill passed 66-27, with seven senators not voting. Eighteen Republican senators voted in favor of the legislation, 25 Republican senators voted against the legislation, and only three Republican senators did not vote on the farm bill--Senators McCain, Murkowski, and Paul. To see how your senators voted, click here
  • The Congressional Budget Office (CBO) has scored both the Senate and House versions of the farm bill, and has determined that the Senate version will cost $955 billion from 2014-2023. Given the CBO's current spending baseline, it was determined that this bill would trim just $18 billion over the 2014-2023 period. Senator Stabenow, chairwoman of the Senate Agriculture Committee, also asked the CBO to score the bill as if the sequester had not taken effect. The CBO determined that if the sequester had not taken effect, this bill would have trimmed $24.4 billion from the current spending baseline, instead of $18 billion. However, this is largely irrelevant, considering the sequester did go into effect and is law. The sequester trimmed $593 million in spending for mandatory agricultural programs in 2013 alone. To see the CBO's letter to Senator Stabenow, click here.
  • The last farm bill was passed in 2008, and it has been extended until September 30, 2013.
  • About 80% of the cost of this bill rests on funding for the Supplemental Nutrition Assistance Program (SNAP), commonly known as the food stamp program. Provisions for the food stamp program were originally added to farm bills of previous years in order to attract the votes of urban members of congress who might otherwise not have an interest in a farm bill.
  • This bill gets rid of the direct payment program for farmers, but adds target price programs and revenue insurance programs.  The bill calls for the creation of an Adverse Market Payment program, which allows for payments to be made to farmers whose crop prices have fallen below the reference prices for their specific commodities. The revenue insurance program, called Agricultural Risk Coverage, provides payments to farmers if the revenue they receive from the sale of their crops comes under 88% of the standard baseline. There are two ways the Agricultural Risk Coverage payments can be determined, depending on whether the farmer chose to opt for farm or county level coverage. Some are concerned that the standard for the target prices are set unnaturally high, so that in average years most farmers will not receive revenue exceeding 88% of the standard baseline for their crops and therefore receive regular payments from the Agricultural Risk Coverage program. So while this bill does away with direct payments program, with the standard baseline for receiving insurance money so high, many farmers will receive insurance payments for losses.
  • This bill establishes three new trust funds for certain industries: the Pima Cotton Trust Fund, for money to go to "nationally recognized associations established for the promotion of pima cotton for use in textile and apparel goods" (pages 1145-1147 of the bill); the Agriculture Wool Apparel Manufacturers Trust Fund, for the creation of which no reason is given (1147); and the Citrus Disease Research and Development Trust Fund, for money to go to "entities concerning diseases and pests that affect the citrus industry..." (1147). This last trust fund also calls for the creation of a Citrus Advisory Board, but not more than 5% of total expenditures from this trust fund can be used for the creation of the advisory board.
  • The bill calls for veterans to be added to the definition of "socially disadvantaged farmers and ranchers," and calls for the creation of a "Socially Disadvantaged Farmers and Ranchers Policy Research Center" (1112-1114).
  • With the Senate version of the farm bill having been passed last night, now it is up to the House to pass its own farm bill legislation. 

The May Jobs Report

 

           CBS Money Watch and Fox News report that there has been less than robust job growth as outlined in the Labor Department's May Jobs Report--the unemployment rate rose to 7.6 percent. A senior economist expressed concern that the unemployment rate for adult African American males over 20 years of age jumped to 13.5 percent from an average of 12.7 percent over the past three months. In May the Hispanic unemployment rate also increased.

 

Over the past year, employment has grown at the same rate as the U.S. adult population and employment growth that maintains a constant employment-to-population ratio is not ideal.  The Federal Reserve reports it expects high unemployment into 2015.

                

            Manufacturers cut 8,000 jobs and the federal government cut 14,000 jobs in May. It was the third straight month of cuts in those industries.  News agencies state that factory output may have been slowed by cuts in defense spending.  Factory activity shrank in May for the first time since November of 2012.

                

            Steep government cuts and higher Social Security taxes might slow economic growth further.  The Social Security tax increase is costing a typical household that earns $50,000 approximately $1,000 this year.  For a household with two high earners, the tax increase is costing up to $4,500.

                

            Other recent figures put out by the Bureau of Labor Statistics are:

  • The real unemployment rate, when figured to include those who are working only part-time due to economic reasons, is 13.8 percent. 
  • Since Obama took office, the average duration of unemployment has nearly doubled.                

           Republican National Committee Chairman Reince Priebus issued a statement pointing out that "millions of unemployed and underemployed Americans are still waiting for the recovery President Obama promised years ago.  President Obama has given plenty of speeches about jobs but he's done very little to support the kind of common sense pro-growth policies Republicans have offered year after year."  For example, the Chairman points out, "the IRS has been squandering taxpayers' hard-earned dollars on luxurious million dollar trips and conferences."  It "is not fair to families struggling to pay the bills and to young people paying off student loans that the government wastes their money in this way."

                

             The RNC Chairman explains that "by eliminating big-government excess and unnecessary spending, while making regulations and the tax code fairer, we can encourage innovation and real economic growth ... and we hope President Obama will finally join us in our efforts ...  [to enact] sensible policies that promote job creation and spur economic opportunity for all Americans in every community."

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