Deal reached for stopping spike in milk prices
The top leaders in both parties on the House and Senate Agriculture committees have agreed to a one-year extension of the 2008 farm bill that expired in October, a move that could head off a possible doubling of milk prices next month.
In addition to the one-year extension that has the backing of the committees, the House GOP is also considering two other extension bills — a one-month extension and an even smaller bill that would simply extend dairy policy that expires Jan. 1.
Expiration of those dairy programs could mean higher prices at the grocery store within a few weeks. Agriculture Secretary Tom Vilsack said Americans face the prospect of paying $7 for a gallon of milk if the current dairy program lapsed and the government returned to a 1948 formula for calculating milk price supports.
— Associated Press
Negotiations on a last-ditch agreement to head off large tax increases and sweeping spending cuts in the new year appeared to resume Sunday afternoon after Republican senators withdrew their demand that a deal must include a new way of calculating inflation that would lower payments to beneficiaries programs like Social Security and slow their growth.
Senate Republicans emerged from a closed-door meeting to say they agreed with Democrats that the request — which had temporarily brought talks to a standstill — was not appropriate for a quick deal to avert the tax increases and spending cuts starting Jan. 1.
To hold the line against raising taxes on high-income households while fighting for cuts to Social Security was “not a winning hand,” Sen. John McCain, R-Ariz., said.
The concession could be a breakthrough, but Senate Republicans were still balking at an agreement Sunday, saying that Democrats want to raise taxes just to increase spending, not to cut the deficit. That concern seems to center on a Democratic proposal to temporarily suspend across-the-board spending cuts to military and domestic programs as talks resume on a larger deficit deal.
The demand for the new way of calculating inflation, known as “chained CPI,” issued at 7:10 p.m. Saturday, had stopped talks cold. Sen. Mitch McConnell, R-Ky. and the Republican Senate leader, went to the Senate floor a little after 2 p.m. Sunday to say that Republicans had made their last offer and had yet to receive a reply.
“I’m concerned about the lack of urgency. I think we all know we’re running out of time,” McConnell said.
Sen. Harry Reid, D-Nev. and the majority leader, responded that “at this stage, we’re not able to make a counter offer.” He said that McConnell had negotiated in good faith but that “we’re apart on some pretty big issues.”
The pessimistic turn came as the House and Senate returned to the Capitol for a rare Sunday session. Reid and McConnell had hoped to have a blueprint to present to their rank and file by mid-afternoon.
McConnell said he had made an emergency call to Vice President Joe Biden to get the talks started again. The two spoke twice, and the White House dispatched the president’s chief legislative negotiator, Rob Nabors, to the Capitol to meet with Senate Democrats.
Talks foundered after Republicans dug in in an effort to get the largest deficit reduction deal they could get in the time remaining, according to numerous Republican and Democratic officials familiar with negotiations. Republicans told Democrats that they were willing to put off scheduled cuts in payments to health care providers who treat Medicare patients, but that they wanted spending cuts elsewhere.
But it was the inflation calculation that forced Democrats away from the negotiating table.
President Barack Obama has said that in a “grand bargain” on deficit reduction, he would go along with the change, which would slow the growth of programs whose outlays rise with consumer prices and would raise more revenue by pushing people into higher tax brackets.
Reid made clear that Democrats did not intend to include Social Security in any stopgap package. Doing so would make it hard for him to round up votes from his own party, and he has resisted touching Social Security.
”We’re not going to have any Social Security cuts,” Reid said on the floor.
The breakdown came after Obama appeared on the NBC program “Meet the Press” on Sunday and implored Congress to act.
”We have been talking to the Republicans ever since the election was over,” Obama said in the interview, which was taped Saturday. “They have had trouble saying yes to a number of repeated offers. Yesterday I had another meeting with the leadership, and I suggested to them if they can’t do a comprehensive package of smart deficit reductions, let’s at minimum make sure that people’s taxes don’t go up and that 2 million people don’t lose their unemployment insurance.
”And I was modestly optimistic yesterday, but we don’t yet see an agreement,” Obama said. “And now the pressure’s on Congress to produce.”
Unless Congress acts by midnight today, a broad set of tax increases and federal spending cuts will be automatically imposed on Jan. 1, affecting virtually every taxpayer and government program. The spending cuts were put in place earlier this year as draconian incentives that would force the president and lawmakers to confront the nation’s growing debt. Now, lawmakers are trying to keep them from happening, though it seemed likely that the cuts, known as sequestration, would be left for the next Congress, to be sworn in this week.
Republicans have blamed Obama for seeking to punish the wealthy with large tax increases and have accused him of not negotiating in good faith. They say his approach would worsen the deficit by protecting Democratic constituency groups from tax increases and benefit reductions while imposing sharp penalties on farmers and small business owners.
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