House Budget Plan: A Different Vision for Energy and Agriculture

The House Budget Committee just passed its budget plan for fiscal year 2013 (FY13). The plan reflects a significantly different approach to addressing the nation’s energy challenges than current policies, and it will likely shape the coming debate over farm bill energy programs in the months ahead.

On March 21, the House Committee on the Budget, chaired by Rep. Paul Ryan (R-WI), passed its FY13 budget plan. To read the accompanying narrative, click here . The budget resolution will next move to the House floor for debate and a vote.

For food and agriculture programs under the jurisdiction of the House Committee on Agriculture, the plan would require the committee to change the rules governing mandatory spending programs (e.g., eligibility requirements, etc.) so as to reduce overall mandatory spending by $8.2 billion in FY13, $19.7 billion over five years, and $33.2 billion over ten years.

The plan recommends, in particular, cutting spending on direct payment programs and crop insurance subsidies for agricultural producers. Agricultural conservation and energy programs are not specifically mentioned. However, the plan presents a starkly different approach to advancing energy security, in general, than is reflected in the current farm bill or other current national energy policies. The following quote from page 30 sums it up:

"This budget would continue funding essential government missions, including energy security and basic research and development, while paring back duplicative spending and non‐core functions, such as applied and commercial research or development projects best left to the private sector. And it would immediately terminate all programs that allow government to play venture capitalist with taxpayers’ money."

Selected excerpts on energy and the environment are presented below.

P. 13: "Boosting American energy resources: Too great a percentage of America’s vast natural resources remain locked behind bureaucratic barriers and red tape. This budget lifts moratoriums on safe, responsible energy exploration in the United States, ends Washington policies that drive up gas prices, and unlocks American energy production to help lower costs, create jobs and reduce dependence on foreign oil."

P. 25: "The President’s energy policies have been characterized by punitive regulations on economically competitive sources of energy coupled with reckless spending on uncompetitive alternatives. Even in the midst of failed stimulus outcomes, the administration presented another budget this year with yet another energy stimulus program. The President’s FY2013 budget would increase energy spending government-wide, including both discretionary and mandatory spending, by almost 90 percent over last year’s enacted levels, and 138 percent over FY2011.

"Since the introduction of this failed energy policy in the 2009 stimulus bill, the Department of Energy (DOE) has issued $20 billion in new loan guarantees for renewable energy projects. The most notorious of these – solar start-up Solyndra – received a loan guarantee for $535 million in the fall of 2009, even after repeated warnings from federal financial analysts about the firm’s financial shakiness.

"Meanwhile, advocates of green energy have argued that it’s not enough for the government to subsidize alternatives – it should also promote policies that make commercially competitive sources of energy more expensive. Then-candidate Obama agreed, arguing in January of 2008: "Under my plan of a cap and trade system, electricity rates would necessarily skyrocket."

"This was the idea behind the controversial "cap and trade" bill that President Obama tried and failed to pass through Congress in 2009, which would have established an elaborate bureaucratic structure for taxing and rationing conventional energy sources. But instead of accepting this verdict on its preferred policy, the administration continued to pursue de facto cap and trade approaches by supporting the Environmental Protection Agency’s (EPA) unilateral plan to impose emissions restrictions on American businesses.

"The push by the Obama administration to pursue energy and environmental policy through heavy-handed regulations circumvents accountability to voters and leaves decisions in the hands of a bureaucratic infrastructure. Unnecessary regulations tie the hands of small businesses and create a hostile and uncertain business environment, discouraging job growth.

P. 29: "By picking winners and losers in the market, the government-as-investor model distorts markets, subverts the rule of law, and fails to spur sustainable job creation. Instead of helping the economy, billions of taxpayers’ dollars are thrown away, successful companies are deprived of their competitive advantages, and workers lose their jobs . . . In energy, Congress must limit the EPA’s discretionary power to impose a bureaucratic version of the job-destroying cap-and-trade program, and it must allow the private sector to develop proven sources of American-made energy, creating jobs and lowering the price of energy here at home.

P. 30: "This budget would continue funding essential government missions, including energy security and basic research and development, while paring back duplicative spending and non--core functions, such as applied and commercial research or development projects best left to the private sector. And it would immediately terminate all programs that allow government to play venture capitalist with taxpayers’ money.

"It scales back spending on government bureaucracies that are seeking to impose a job-destroying national energy tax. It assumes increased revenues from bonus bids, rents, royalties, and fees as a result of lifting moratoriums and bans on safe, environmentally responsible exploration for domestic energy supplies. And it allows private development of all American-made energy, including nuclear, wind, and solar.

"Ultimately, the best energy policy is one that encourages robust competition and innovation to ensure the American people an affordable and stable supply of energy. This budget would roll back federal intervention and expensive corporate welfare funding directed to favored industries. Instead, it would promote policies aimed at reliable energy, lower energy prices, greater revenue generation through prosperity, and market-based solutions for sustainable energy."