Important Budget Process Unfolding in Congress Over Next Two Weeks

The U.S. House of Representatives and U.S. Senate are preparing for floor consideration of their respective budget resolutions for fiscal year 2018.  While typically partisan and symbolic exercises, the FY2018 budget process includes reconciliation provisions that Republican leaders hope to use to pave the way for enactment of comprehensive tax reform. The reconciliation process would enable tax reform to pass the Senate with 51 votes instead of the 60 vote filibuster proof threshold.

The underlying House and Senate budget resolutions do include specific and assumed reductions for agriculture, however, Agriculture Committee Chairmen in both the House and Senate have indicated the proposed cuts will not be executed and will not become reality. The budget resolution is now viewed merely as a vehicle necessary to pass to carry the tax reform reconciliation instructions. The House budget resolution includes instructions for $10 billion in savings over a decade from agricultural and nutrition programs, but these provisions are expected to be dropped in the final budget agreement with the Senate. The Senate budget resolution includes an assumption that there will be about $21 billion in savings to the U.S. Department of Agriculture (USDA) farm programs over a decade. However, there are no specific instructions included with those assumptions, which makes them unenforceable and all indications confirm the Senate does not intend to pursue them.

The American Soybean Association (ASA) continues to monitor the process and communicate with the House and Senate Agriculture Committees to ensure funding for agriculture is not jeopardized.  ASA also recognizes the importance of Congress passing a budget resolution with reconciliation instructions to allow the process for comprehensive tax reform to move forward.  ASA remains actively engaged in tax reform discussions and is communicating our priority issues, including the importance of interest deductions for agricultural operations.