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Rep. Peterson: Commodity subsidies should be safe from Obama's budget freeze

A three-year freeze in spending on many domestic programs, which President Barack Obama is expected to call for when he delivers his first State of the Union message to Congress on Wednesday, likely would have little effect on commodity subsidies and other major farm programs, Rep. Collin Peterson, D-Minn., said.

"We expected this," said Peterson, who as chairman of the House Agriculture Committee plays a key role in writing the nation's five-year farm bill.

"At one time, they were talking about taking a 5 percent cut" at the U.S. Department of Agriculture, he said. "A freeze is better than that."

The president's proposed freeze is expected to be a major feature of the budget he'll send to Congress early next week and is meant to demonstrate his commitment to cutting deficits, the New York Times reported today.

"It only affects discretionary spending," Peterson said, explaining why news of the possible freeze didn't overly alarm him. "The farm bill is mandatory spending, driven by a formula, not by appropriation. What's put in the law drives what the spending is, and direct payments, for example, are pretty much fixed.

"He (Obama) can't directly affect the mandatory spending in the farm bill, and the appropriators (in the administration) can't change the underlying formulas I put into the law."

Both the Obama and George W. Bush administrations tried in the past four years to make changes in some USDA mandatory programs, such as Environmental Quality Incentives Program and other conservation programs, Peterson said.

"What they do is go in and cap a program," he said. "They haven't tried that with commodity programs. But they've tried in EQIP, a conservation program where a farm can, for example, (get money) for putting in water control structures to reduce erosion.

"We say from the committee that this isn't fair; they're legislating. They have put these caps out, but they've never been able to make them stick.

"If there's any exposure here with the freeze, it's probably in conservation programs" and possibly nutrition, rural development and other areas, "and not in commodities."

Peterson said that he favors action to rein in federal spending and get deficits under control.

However, noting that "the big entitlement programs, such as Social Security and Medicare, are driven by formulas," and the proposed freeze would exempt the Homeland Security and Defense departments "where a lot of the spending is," he isn't optimistic the proposed freeze would accomplish much.

"I don't think anyone should be persuaded that this is going to solve the problem," he said.

Chuck Haga is a reporter at the Grand Forks (N.D.) Herald, which is owned by Forum Communications Co.