Senate Democratic proposal on sequestration would end direct payments

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, Feb. 14, 2013 - A Senate Democratic proposal to avoid looming across-the-board federal cuts, known as sequestration, includes the elimination of direct farm payments, Senate Committee on Agriculture, Nutrition and Forestry Chairwoman Debbie Stabenow, D-Mich., announced today.

The American Family Economic Protection Act, which the Senate is expected to debate during the week of Feb. 25, would save $27.5 billion over 10 years by cutting farm subsidies and extending certain farm bill programs that were left out of the recent farm bill extension.

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“The choice facing Congress is to allow drastically irresponsible cuts to hit every part of our budget and cost 750,000 jobs, or to make smart, targeted cuts,” Stabenow said. “Billions in direct payment subsidies are paid out even in good times and for crops farmers who aren't even growing.”Stabenow noted that eliminating the direct payments had bipartisan support when the provision was included last year in the Senate-passed farm bill.

“Eliminating direct payments more than satisfies sequestration for years,” Stabenow told reporters during a teleconference today.

In addition to the $27.5 billion in deficit reduction, eliminating the payments would provide and additional $3.5 billion to extend disaster assistance, renewable energy, rural development, conservation, hunger prevention, agriculture research, organic certification, and specialty crop programs.

Avoiding sequestration would spare all federal departments, including USDA, from the cuts until Jan. 2, 2014.

The proposal was greeted coolly by House Agriculture Committee Chairman Frank Lucas, R-Okla.

“The House Agriculture Committee demonstrated [a] commitment to being a part of the solution when we passed a comprehensive, balanced farm bill that cut more than $35 billion from all of agricultural spending, including the farm safety net, conservation programs, and reforming the SNAP program,” Lucas said. “We made those reforms in the context of a comprehensive, five-year farm bill that ensured we still met the food and fiber needs of all Americans. The Senate's approach of taking away our investment in rural America without addressing the hole it will create is not balanced and not acceptable.”

The underlying proposal also includes various tax provisions, such as ending tax breaks to companies that ship jobs overseas.

The bill would apply the Buffett Rule to taxpayers with adjusted gross incomes greater than $1 million, after subtracting charitable contributions, who are paying less than a 30 percent average tax rate in combined income tax, alternative minimum tax, and the employee's portion of the payroll tax. Specifically, the bill would require these taxpayers to pay a 30 percent tax on all of their adjusted gross income, less charitable contributions, phased in between $1 million and $2 million.



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