Senate Democratic leaders are expected to introduce “The American Family Economic Protection Act” which, if enacted, would eliminate sequestration (across-the-board cuts) in 2013. The legislation would replace the savings achieved through sequestration with provisions that reduce spending in agriculture and defense programs by a total of $55 billion and would raise revenue by $55 billion.

Agriculture would contribute 50 percent of the total spending reductions through a provision that cuts $27.5 billion from commodity programs by permanently terminating Direct Payments (DPs) beginning in either 2013 or 2014.

Senate Agriculture Committee Chairwoman Stabenow (D-Mich.) indicated it is more likely that the DPs would be terminated beginning in 2014 as USDA has announced sign-up for 2013 programs will begin on Feb. 19 and the Congressional Budget Office is unlikely to score any savings for 2013.

(See related: Alternative proposal would end direct payments)

According to information provided by the Senate, terminating DPs reduces spending by $31 billion over 10 years but $3.5 billion would be used to fund certain programs that expired in 2011 and 2012 and were not funded in the farm bill extension. So, the proposed legislation reduces spending on commodity programs by a net of $27.5 billion.

Even though it is unlikely the legislation will attract the 60 votes necessary to pass, it is disappointing that the reductions fall disproportionately on agriculture and that 100 percent of the reductions in agriculture are from commodity programs. It also is a concern that while the legislation will prevent sequestration for one year, it will permanently reduce the budget baseline available to the Agriculture Committees to write new farm legislation without any solid assurance that there won’t be further reductions when the FY14 Budget Resolution, Debt Limit and Continuing Resolution are crafted and debated in the next 90 days.

Chairwoman Stabenow is quoted as saying that the Senate leaders have said, "no more cuts to agriculture spending will be required going forward for the purpose of deficit reduction."

A full explanation of the American Family Economic Protection Act is on the NCC’s website at www.cotton.org/issues/2013/protect.cfm.

In a related development, Sens. McCaskill (D-Mo.) and Flake (R-Ariz.) have introduced legislation that would terminate DPs. A news release issued by the senators said the legislation would "end wasteful farm direct payments -- direct cash transfers of taxpayer dollars to farmers from the government that do not take into account current yields or prices."