Without any action by the end of the year – automatic cuts will affect more than 1,000 federal programs — many of which impact agriculture.
The fiscal cliff also will impact tax breaks – including the estate tax, which will revert from a $5 million exemption with a 35-percent tax rate to a $1 million exemption with a top tax rate of 55-percent. The American Farm Bureau Federation says this could impact one of every 10 farms.
The Senate Farm Bill passed in June saves $23 billion over 10 years, while the house Ag committee’s version saves $35 billion. Some combination of the two bills could provide a much-needed budgetary offset for those negotiators trying to avoid a trip over the fiscal cliff.