Last week’s drama in Congress was the debate about a continuing resolution to fund the government – at least for a while – beyond the end of the fiscal year on Monday.

The House passed a bill that would fund government operations through December 15, but would not fund the Affordable Care Act (Obamacare). It is clear that that bill won’t pass the Senate and the bill without the language to defund the health care program will be sent back to the House – but probably not until Sunday.

The House will have to accept what the Senate sends to them or a government shutdown is likely. However, most people want to avoid a government shutdown, so some type of compromise is at least possible.

But if we get past the government shutdown crisis; another awaits. It’s yet another “debt ceiling” crisis.

The Treasury Secretary says if Congress doesn’t raise the debt ceiling again, by the middle of October the government will be unable to pay its bills. Leaders of the House say they will demand spending cuts before they will approve an increase in the debt ceiling. But the administration says it will not negotiate and that Congress should raise the debt ceiling so the government can pay for programs that have already been signed into law.

The outcome of this confrontation is as unclear as the current one.

With back-to-back financial crises, work on the farm bill moves to back burner.

The House is expected to appoint members to a conference committee next week, but few people expect much progress during the first half of October. The extension of the 2008 bill expires on Monday, but not much happens until the end of the calendar year when milk price supports would have to be raised.

The 2013 crops are covered by the 2008 farm bill provisions regardless of what happens in the conference committee.

The farm bill conference committee will have a lot of issues to resolve. The biggest will be the gap between the House and Senate with respect to the nutrition programs.

The House bill changes provisions that result in savings in the food stamp program of nearly $40 billion over 10 years compared to savings of $4 billion over that same period in the Senate bill. Other key issues:

  • The House bill also sets the nutrition programs to expire in three years while the farm bill would expire in five years. This provision would sever the link between the farm program provisions and the nutrition programs for the foreseeable future.
  • The House bill would repeal and replace the permanent legislation that has forced Congress to update farm bills in the past.
  • The Senate bill requires farmers to comply with conservation provisions to be eligible for crop insurance. Both bills have target prices and offer payments when prices are below those levels, but the target prices are very different and payments are based on planted acreage in the House bill and base acres in the Senate bill.

There are also differences in dairy policy and a controversial provision that would prevent states from enacting laws that would inhibit trade with other states. It is not at all clear that a compromise bill can win approval in both Houses of Congress and be signed into law.

If it can’t – then we are back to another extension of the 2008 bill!