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House passes two year budget deal

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Wednesday, Crop Insurance was dragged to the center of the political arena, beaten and fined $3 billion dollars or that’s the way it appeared as Congress passed a budget and lending extension bill that was prepared by only the top four leaders and the President.

However, there may be more to it than meets the eye as deals were cut to gain votes.
Members of the House Agriculture Committee failed to stop a $3 billion cut to crop insurers contained in a two-year budget agreement between congressional leaders and the White House. The bill passed both houses late yesterday.

“The overall impact would be to flush insurance companies out of the business,” According to House Ag Committee Chair, Mike Conaway from Texas.

Senate Ag Chair, Pat Roberts, swore he would not support the budget measure if it contained cuts to crop insurance arguing that agriculture had done its part to reduce spending in the 2014 farm bill.

However, there are deals within deals in Washington and Conaway along with Ranking Member Collin Peterson announced an agreement to avoid the cuts to crop insurance, while the language to cut crop insurance funding will remain in the bill, House leadership has agreed to reverse this provision in the omnibus bill later this year.
That action was needed to get votes from key republicans and democrats from farm states.

Agri-Pulse Electronic Newsletter reported the following:
USDA was supposed to carry out the cut before the end of 2016 by lowering the cap on the insurance companies’ rate of return. The $3 billion in savings that the cut was supposed to produce will be found in some other, non-agricultural area of the federal budget.

Conaway, who had argued that the cut was so draconian that it would drive companies out of the crop insurance business, agreed to support the bill and urged other members of his committee to do so. Many GOP committee members still voted against it, including Steve King of Iowa and Randy Neugebauer of Texas, who represent major farm districts.