August 10, 2011
www.gfb.org
Vol. 29 No. 32
FEDERAL SPENDING CUTS IN DEBT CEILING DEAL SIGNED INTO LAW On Aug. 2 Congress passed and President Barack Obama signed the Budget Control Act of 2011, which will allow the federal government to continue borrowing money until 2013 but also cuts spending by $935 billion over 10 years. The bill, S. 365, raises the debt ceiling by an amount between $2.1 trillion and $2.4 trillion above the previous debt limit of $14.3 trillion. The spending cuts are in the form of caps on discretionary appropriations, which could include farm programs. For fiscal years 2012 and 2013, the act prohibits shifting funds between defense spending and non-defense spending. If Congress exceeds the spending caps, across-the-board cuts would automatically take place. Multiple members of Congress have said the spending cuts may effectively write the 2012 farm bill. American Farm Bureau released a statement on Aug. 2 saying the act keeps the United States moving forward, but more work will be required to resolve the nation’s financial woes. Farm Bureau will work with the House and Senate ag committees as they are asked to recommend savings related to agriculture spending once a joint congressional committee is named to identify additional budget savings, with the goal of recommending savings that will make the most sense for Farm Bureau members and retain the most integrity for farm programs. “Our concern is that we want to have enough money left when all is said and done to write a viable farm bill that provides an effective safety net for America’s farm and ranch families,” American Farm Bureau Federation Executive Director of Public Policy Mark Maslyn said before the law passed. The act, which became Public Law 112-25 upon signing, creates a Joint Select Committee on Deficit Reduction, a 12-member committee that will include six members of the House and six from the Senate. Each chamber’s committee members will include three Democrats and three Republicans. The committee will be tasked with recommending legislation that will reduce the federal deficit by a minimum of $1.2 trillion. That recommendation is to be made by Nov. 23 and the House and Senate must hold an up or down vote on the recommendations by Dec. 23 to avoid automatic cuts that would be equally divided between defense and non-defense spending, including discretionary spending and some entitlement spending. The act also requires the House and Senate to vote on a balanced-budget amendment to the Constitution by the end of the year. A two-thirds majority is needed by both chambers in order to send the amendment to the states for ratification.