With Kaitlyn Burton, Helena Bottemiller Evich, Adam Behsudi, Eric Wolff, Sabrina Rodriguez and Catherine Boudreau
HOW THE TAX BILL COULD HIT AG FUNDING: The Senate is gearing up to pass the biggest corporate tax cut in American history — but the legislation, H.R. 1 (115), could have serious implications for the agriculture industry. In addition to provisions that would raise the estate tax exemption, roll back the section 199 deduction and restrict “carry-back” provisions, the measure could also trigger significant spending cuts to a slate of USDA programs — if Congress doesn’t step in.
The threat of PAYGO: If Congress doesn’t suspend its pay-as-you-go, or PAYGO rule, the big ol’ $1.5 trillion tax bill price tag would need to be offset by slashing key farm safety net programs like ARC and PLC, right alongside other mandatory federal spending programs (SNAP, however, would be exempt from these cuts.). The math is tough, no matter how you spin it: The government would have to cut non-exempt programs by about $150 billion per year and there’s not a whole lot to work with. The Congressional Budget Office estimates that there’s only between $85 billion and $90 billion in total available funding across all the non-exempt mandatory programs, a situation that would leave the Commodity Credit Corporation (CCC) completely in the lurch.
NFU has raised the alarm over the PAYGO threat: “In the case of the tax bill, current law could require 100 percent sequestration of all commodity program payments and other farm bill programs,” National Farmers Union President Roger Johnson said earlier this month. “Tax cuts for the highest income brackets should absolutely not come at the expense of programs that protect our nation’s family farmers and ranchers.”
NFU notes that the CCC is the second largest non-exempt mandatory program, after Medicare, that could face the squeeze. CCC funds key safety net programs, including ARC and PLC, which, NFU argues, “are critical for keeping family farmers and ranchers in business during times of economic uncertainty.”
Senators promise not to go there: Lawmakers keep saying they’ll waive PAYGO to avoid this type of budgetary bloodbath, but that hasn’t stopped folks in town from being nervous about it. Sen. Susan Collins on Wednesday insisted she has assurance from Senate Majority Leader Mitch McConnell that sequestration will not be triggered (The Maine Republican is especially worried about billions being slashed from Medicare.).
“We have 16 times waived the pay-go requirements to prevent this from happening, and I expect that it will be done on either the continuing resolution to stop-gap funding measure or the omnibus spending bill, but it will be done before the end of the year,” Collins said.
McConnell set the next tax-bill vote for 11 a.m. Friday. Behind the scenes into the night Thursday work continued to win over skeptical deficit hawks and other hold-outs. As POLITICO’s Seung Min Kim and Colin Wilhelm report: A key proposal for deficit hawks — a trigger to raise tax rates if sufficient economic growth does not materialize — would not pass procedural muster and would need to find something else to satisfy the bloc of deficit hawk holdouts, led by Sen. Bob Corker (R-Tenn.).
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PERDUE PREDICTS STRONG FY2018 AG EXPORTS: Continue reading here…