From NTRA WASHINGTON, D.C. (Sept. 20, 2012) -- Earlier this year, it appeared that Congress would pass new legislation before the current farm bill expires on September 30th, but it now appears likely that Congress will allow the current bill to lapse. The Senate passed a new five year farm bill several weeks ago. However, the House is far from passing the Senate version of the farm bill due to severe pressure from conservatives who have a strong dislike for the multiple spending programs found in the Senate bill. With the House and Senate far apart, there is virtually no chance that a long-term deal can be reached on a new bill before the current bill expires.
It is possible that Congress will pass yet another extension of the current farm bill, as they have done many times before, to allow more time to negotiate a longer term solution. But even that approach is now in question as adjournment looms. Thus, in spite of increasing pressure from agricultural states and business sectors severely damaged by this past summer’s widespread drought, a deeply divided Congress appears ready to adjourn without providing a solution.
Numerous tax cut provisions that are set to expire at the end of 2012 will not be addressed until the lame duck session. These cuts, commonly known as the "Bush tax cuts" enacted largely in 2001 under then President Bush, have become a centerpiece of the campaigns for both parties. Campaign results will likely dictate how fast Congress will address these provisions and what the likely outcome will be. These tax issues, coupled with the automatic sequester scheduled to slash $109 billion in military and nonmilitary spending, are what is now commonly referred to as the fiscal cliff.
We will continue to update you on progress as the lame duck session approaches or if other developments arise.