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President's FY06 Budget Would Cut Domestic Spending, Focus on Security On February 7, President Bush released his $2.57 trillion budget proposal for fiscal year 2006 (October 1, 2005 to September 30, 2006) that would cut spending for a wide variety of domestic programs and increase spending for military and homeland security purposes. Specifically of interest to dairy, the president's budget proposes an extension of the current Milk Income Loss Contract (MILC) direct payment program (making good on a campaign promise), but looks for reductions in the operation and outlays of the Dairy Price Support Program. All payment programs for farmers would be cut by 5%, including MILC.These new budget proposals are contained within the plans for the U.S. Department of Agriculture (USDA). USDA's proposed discretionary budget level for FY06 is $19.4 billion, a 10% reduction over FY05. In addition to the MILC extension and support program requests mentioned above, the budget plan would reduce the individual farmer payment cap to $250,000 from the current cap of $360,000. Since U.S. sugar growers do not receive direct subsides — enjoying instead a highly protective policy that guarantees higher prices — the USDA proposal includes a 1.2% marketing assessment to be paid by sugar producers on all processed sugar. Federal nutrition programs under USDA's authority receive a boost under the president's plan. Child nutrition programs, such as the National School Lunch and Breakfast Programs, would be funded at a level of $12.9 billion, an increase of about $550 million over FY05. The Women-Infants-Children (WIC) nutrition program would be funded at a level of $5.6 billion, up $335 million. The budget proposal for USDA, as well for other federal agencies including the Food and Drug Administration (FDA), includes a number of spending increases for the president's Food and Agriculture Defense Initiative, which was created to address the threat of foreign animal diseases and bolster food safety as part of homeland security. Specifically, there is a $15 million increase request for research to develop rapid-detection methods for high-risk foodborne pathogens, as well as a $7 million increase proposal to support research for livestock tests. For FDA, its FY06 budget would increase 4.5% to $1.9 billion. The agency's major request is a $30.1 million increase for programs that help defend the U.S. food supply or respond to attacks on it. This money would fund such projects as the addition and expansion of government laboratories capable of analyzing thousands of food samples for biological, chemical and radiological threat agents. It would also fund targeted research in the areas of prevention/mitigation technologies, tamper-proof packaging, rapid test methods, and agent sensor technologies. As outlined in the president's State of the Union address earlier this month, the budget proposal is aimed at cutting the nation's deficit in half by 2009. Overall, the proposal would reduce non-security discretionary spending by about 1%. This would be accomplished by significantly reducing or ending about 150 domestic programs that the White House believes are not accomplishing their goals, duplicate other government services or are not essential priorities for the nation. Given the political sensitivities of the varied domestic programs that President Bush would like to reduce/end, analysts are predicting an uphill battle on Capitol Hill for the deep spending cuts. Congress must pass the budget through 13 appropriations bills by October 1, or take action to extend the current funding levels until a new budget is approved.
Posted February 14, 2005
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