The White House released its proposed $5.8 trillion (mandatory and discretionary spending) fiscal year 2023 budget on Monday. The proposed budget increases funding for both defense and domestic programs, including police, education, public health and housing.
The proposed budget would increase defense and domestic discretionary spending by 5.7% over the recently enacted fiscal year 2022 omnibus appropriations bill. It reduces deficit spending by $1 trillion over a 10-year period.
The budget proposes over $2.5 trillion in tax increases on the wealthy and large corporations over a 10-year period. Key revenue proposals include:
- Billionaire Minimum Tax - minimum 20% tax on the top 0.01% earners and households worth more than $100 million.
- Raise top individual tax bracket to 39.6%.
- Raise the corporate tax rate from the current 21% to 28%.
Discretionary funding is at $1.64 trillion, approximately 9% over fiscal year 2022. Domestic and foreign aid programs would receive $829 billion, a 14% increase. Defense programs would receive $813 billion, a 4% increase.
Agriculture – The President's budget is proposing a $2.6 billion increase for agriculture or a 9% increase over last fiscal year. It emphasizes research, climate related programs, conservation, rural broadband and issues concerning equity.
It proposes $4 billion for agricultural research programs, up from $3.5 billion in FY '22. The Natural Resources Conservation Service would receive $1 billion for conservation technical assistance along with $1.7 billion for EQIP, CSP and other conservation programs. NRCS is proposing to increase the workforce by 2,000 over FY '21. An additional $600 million is provided for the ReConnect program which provides grants and loans to deploy broadband to unserved areas.
The budget proposes over $10 million for oversight and the enforcement of the Packers and Stockyards Act.
The President's budget does not include any proposed cuts to commodity programs or crop insurance.
Supreme Court to consider Prop. 12 case
The U.S. Supreme Court announced on Monday that it would hear a case challenging California's Proposition 12 brought by the National Pork Producers Council and the American Farm Bureau Federation. NPPC and AFBF argue that Prop 12 is unconstitutional by imposing requirements on farming practices outside of California, which impacts interstate and international commerce.
Prop 12, passed in 2018, would require that pork sold in California would have to be from breeding pigs with at least 24 square feet of usable floorspace.
U.S.-Japan Beef Agreement
The United States and Japan announced last week that the two countries had reached an agreement to increase the beef safeguard level under the U.S.-Japan Trade Agreement. This will allow the U.S. to meet Japan's growing demand for beef and reduce the likelihood of Japan imposing higher tariffs.
The agreement establishes a new three-trigger safeguard mechanism that must be hit before Japan can impose higher tariffs on U.S. beef. The three triggers are:
- Imports from the United States must exceed the original beef safeguard trigger level under the U.S.-Japan Trade Agreement.
- The aggregate volume of beef imports from the United States and the original signatories of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership must exceed the CPTPP beef safeguard.
- Imports from the United States must exceed the total amount of beef imports from the United States during the previous year.
U.S. Meat Export Federation President Dan Halstrom said in a statement, "USMEF greatly appreciates the efforts of USTR and USDA to adjust Japan's safeguard on U.S. beef. The U.S.-Japan Trade Agreement was a tremendous breakthrough for the U.S. meat industry, including the significant reduction in Japan's tariffs on U.S. beef, but the playing field has not been entirely level due to this safeguard. The changes announced today reduce the potential impact of the safeguard and make it less disruptive for U.S. exporters and their customers in Japan."
In 2021, Japan was the United States' largest beef export market by volume at 320,738 metric tons and second largest in value at $2.3 billion.
Record Soybean Acres in 2022
Producers are planning to plant a record 91.0 million acres of soybeans this year, up 4% over 2021 according to USDA's Prospective Plantings report. The largest increases in acres are expected in Illinois and Missouri.
Producers surveyed across the United States intend to plant a record high 91.0 million acres of soybeans in 2022, up 4% from last year, according to the Prospective Plantings report released today by USDA's National Agricultural Statistics Service.
Corn acres are estimated at 89.5 million acres, down 4% from last year. States with the 200,000 or more reduction in acres are Illinois, Indiana, Iowa, Kansas, Minnesota, Nebraska, North Dakota and Wisconsin. Record high acres are expected in Nevada and South Dakota.
USDA is estimating wheat planted area for 2022 at 47.4 million acres, up 1% from 2021. This represents the fifth lowest all wheat planted area since records began in 1919.
The Prospective Plantings report is the first official, survey-based estimates of U.S. farmers' 2022 planting intentions. NASS conducted the survey of approximately 73,000 farm operators nationwide during the first two weeks of March.
Source: P. Scott Shearer, who is solely responsible for the information provided, and wholly owns the information. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset. The opinions of this writer are not necessarily those of Farm Progress/Informa.