Andrew Novakovich, agricultural economics and Farm Bill expert, and professor of Applied Economics and Management at Cornell University, discusses the impact of the current government shutdown on agriculture-related federal services.
Novakovic has acted as Senior Economist to the USDA Office of the Chief Economist since 2011. His activities included assisting in analyzing proposals made in connection with agricultural legislation and other issues related to dairy programs.
Novakovic says:
“With the biggest share of government spending mandated under ongoing law, Congress' failure to pass appropriations for fiscal year 2014 will have relatively little or no effect on the big ticket items of government, including keeping military in the field, making Medicare payments to doctors and hospitals, issuing fresh SNAP EBT cards, paying social security checks, or even initiating the new health exchanges under the Affordable Care Act.
“Instead, a large number of federal workers will get unpaid leave, visitors to DC and national parks will find doors barred shut, and all kinds of folks and businesses will find out how much we rely on a myriad of federal reports that are easy to take for granted. Retirement programs that calculate benefits based on changes to the Consumer Price Index won't have a new estimate of changes to consumer prices. CME futures markets that cash settle against a federal estimated price won't have a cash price announced. Farmers that had planned to finish that paperwork in their local FSA office will find the door locked.
“The irony is that advocates of smaller government and fiscal responsibility may risk more by this politically-motivated delay. Most of the big-government programs that they believe are out of control will continue unabated because their funding is mandated non discretionary.
“With each advancing day, compromise becomes both more necessary and more difficult. And, as the deadline for expanding the debt ceiling gets closer, the stakes are raised. It may be easy to stand by while government workers calculate how long they can go without a paycheck, but the prospect of the government of the world's largest economy and most powerful country reneging on its loan payments is punishing to advocates of fiscal responsibility.”
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