Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Tuesday 10/30/12

Sandy Will Put Even More Fiscal Pressure on Congress

My wife and I were somewhat mesmerized by Hurricane Sandy coverage last night as the storm hit New Jersey and New York. Images throughout the day showed the Atlantic City boardwalk washed away, water pouring into the subway and electrical transformers blowing up.

Damage stretches from North Carolina all the way up the Atlantic and now significantly hitting inland.

Somewhere during all of that TV coverage I finally realized this is going to cost a lot of money. Hurricane Katrina in 2005 was assessed at $125 billion in damage. Sandy may not come in that high because we don't have a breached lake, but the costs will be expensive nonetheless.

The fiscal cliff now starts to look a lot like that dangling construction crane in downtown New York.

The federal government's role in helping with recovery now would seem to have to move into the congressional debate over the fiscal cliff, sequestration and what can be done in the lame-duck session. That then raises questions about the farm bill's role in the lame-duck session as well, and how much a largely economically stable agricultural economy can contribute to the cause. Then there are the agricultural producers in the Atlantic coast and Northeast. From hogs in California to poultry in the Delmarva and both beef and dairy cattle in Pennsylvania and New York -- all were likely hit hard by the storm. Disaster aid will be inevitable, though currently there is no actual agricultural disaster program for these livestock producers to fall back on.

Thus, Sandy has thrown yet another wildcard into the mix of governing under fiscal restraints and budget pressure. Lawmakers will not only be looking for ways to offset the sequestration cuts -- also scheduled to hit agencies such as FEMA -- as well as how to balance tax cuts and the so-called fiscal cliff. They will also be dealing with vocal state and local officials in places such as New York and New Jersey who are going to expect their congressional delegations to help provide some relief.

All that said, this super storm now increases the likelihood Congress could say there is no time for a farm bill and push a one-year extension as part of a bigger, "omnibus" piece of legislation. Or, lawmakers outside of the House and Senate Agriculture Committees could demand more budget offsets from agriculture to help pay for the disaster relief that will be needed by those affected by the storms. Either way, it looks like steeper cuts will be proposed in the farm bill than the $23 billion over five years passed by the Senate or the $31 billion adopted by the House Agriculture Committee.

I can be found on Twitter @ChrisClaytonDTN

Posted at 6:58AM CDT 10/30/12 by Chris Clayton
Comments (1)
This next of too many 100 year events should actually put pressure on "We The People" to tune out the Pundits, Authorities and Apparatchiks who keep us at each others throats while they play with our money. Again...it's MORE than time to drain the swamp!
Posted by Ric Ohge at 12:57PM CDT 10/30/12
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