Agriculture Secretary Tom Vilsack today spoke before the Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies:
"As we meet, Congress is in the midst of debating a continuing resolution for 2011. As the President has made clear, the administration believes that the final product should embrace the principles both of shared sacrifice and shared opportunity, to do so carefully, and in a way that reflects our values.
"To prepare for this continuing resolution, I have already instructed my leadership team at USDA to prepare for a host of possibilities when it comes to future resources -- and to know exactly what resources are available to them today. But it is also my hope that any funding proposals should provide USDA the time to appropriately manage any cuts so that we continue to be as effective as possible in serving our customers, the American people.
"As the continuing resolution has been debated, the Administration has demonstrated its commitment to reducing the deficit -- taking a very close look at our budget to find spending cuts. USDA already showed our commitment to deficit reduction by providing $4 billion last year to help pay down the debt in negotiating an agreement with crop insurance companies.
"In total, the 2012 budget we are proposing before this subcommittee is $130 billion, a reduction of $3 billion below the 2011 annualized continuing resolution. For discretionary programs, our budget proposes $18.8 billion, a reduction of $1.3 billion below the 2011 level.
"In this budget, we are cutting programs not because we want to, but because we have to. American families have been forced to tighten their belts and government must do the same. We are promoting good government and streamlining agency operations in a host of programs. We are proposing to reduce or terminate selected programs. And, the budget fulfills the President's pledge to completely eliminate earmarks. It looks to properly manage deficit reduction, while preserving the values that matter to Americans. We are working to do it responsibly by focusing limited resources on programs where we can achieve the greatest impact.
"We are also making investments to lay a foundation for a successful future for agriculture and for the American people. This budget includes targeted investments and program increases in key areas to support job creation and economic competitiveness. We will invest in research to spur innovation, promote exports, support renewable energy and conservation, and enhance critical infrastructure in rural communities.
"In rural America, we must continue to promote job growth as the economy continues to recover. This budget will better target our investments to high growth rural businesses, because the most important thing we can do to support job creation and thriving rural economies is to provide credit to entrepreneurs and communities. To help ensure rural communities have the basic infrastructure they need -- and at no cost to the taxpayer -- we are more than tripling our direct loan support to help communities build and repair hundreds of hospitals, libraries, and police and fire stations. We will also make critical investments in local and regional food systems, as they not only create jobs but also enhance income opportunities for producers.
"A nation-wide renewable energy industry will also help create the jobs of the future in rural America, while reducing our dependence on foreign oil, and risks to our environment. Our budget reflects our commitment to promoting the domestic production of renewable energy through continued investments in renewable energy programs and by focusing our loans to rural electric cooperatives on the development of clean burning low emission fossil fuel facilities and renewable energy deployment.
"Today, record agricultural exports are helping grow our economy -- every billion dollars in increased exports supports 8,400 American jobs -- and our budget includes resources directed at continuing that momentum.
"As the President has indicated, we have to out-innovate, out-educate, and out-build, our global competitors. USDA's budget reflects a commitment to winning the future, to long-term growth and stability of our agricultural economy as well as our rural economy. Scientific research is essential for achieving these goals. To promote American innovation, new discoveries, and new industries, we continue to target and focus additional research dollars in key areas, like biofuel feedstocks, livestock and crop production and protection, ecosystem market foundations, and biotechnology.
"In this recovering economy, there are still many families in need. Our budget reflects the reality, fully funding the expected requirements for the Department's three major nutrition assistance programs -- WIC, the National School Lunch Program, and SNAP. We also continue a strong but focused commitment on rural housing.
"Regardless of economic conditions, some things remain constant, like the need to ensure the safety of the American food supply. The budget focuses on two areas for improving food safety: the development of a public health information system that allows us to prevent problems, and a uniform incident command structure to allow us to respond more effectively to foodborne illness outbreaks that might be multiagency in scope.
"The agricultural economy is relatively strong and we anticipate that there will be very little need for counter-cyclical or loan deficiency programs.
"Unfortunately, not every segment of agriculture is experiencing good times. We are keeping an eye on livestock, dairy producers and specialty crop producers. We also want to ensure that intermediate-sized or medium-sized operations are succeeding, and to create opportunities for off-farm income that sustain many of these producers.
"To maintain a strong safety net for American agriculture, we fund our guaranteed and direct loan programs for ownership and operating loans, expand the crop insurance program, and adequately fund our disaster programs under the 2008 Farm Bill. And building on the crop insurance savings that we realized last year -- which carry over into this year -- new changes in catastrophic policies in terms of the premium assistance will net additional savings. Also, we again propose the direct payment reforms that would impact only about 2 percent of producers, and save $2.5 billion over 10 years.
"Overall, we propose cutting our Rural Development budget by $535 million, reflecting targeted reductions and eliminations of programs. We are proposing some tailoring of our housing programs, but still support a strong Guaranteed Single Family Loan Program. Our budget also recognizes that successful and effective rural economic development will occur on a regional basis. It proposes working through existing programs to fund regional pilot projects, strategic planning activities, and other investments to improve rural economies.
"There are some programs we propose eliminating entirely. The Guaranteed Operating Loan with Interest Assistance Program is relatively small and we think we can handle the operating loan needs of farmers without necessarily providing interest assistance. And a number of programs, like the Watershed and Flood Prevention Operations Program and the Watershed Rehabilitation Program, are eliminated simply because they are the responsibilities of other jurisdictions and are not large enough to really make a significant impact.
"In this budget, we remain committed to conservation and are proposing selected increases to emphasize targeted watershed-scale efforts and to improve the efficiency of our conservation program delivery. Overall, we anticipate a record number of acres enrolled in a variety of Farm Bill conservation programs.
"Inherent in this budget are also workforce reductions and administrative efficiencies that will allow us to more effectively manage our business through process improvement, the better use of IT, as well as taking a look at attrition, temporary workforces and the like, and ways of better managing our resources. And while many of our payment programs are operating at historic levels of accuracy, this budget continues to support efforts to reduce improper payments. We are also seeking to recover the cost of operating a number of programs by collecting user fees from those that directly benefit from the services being provided.
"Budgets are always difficult. They involve a variety of difficult choices and tradeoffs. This budget addresses the realities and critical challenges facing the Nation in a balanced way, and includes the targeted investments we need to make to support job growth as the economy recovers. I will be happy to answer your questions."