Impact of "Fiscal Cliff" Agreement
On January 1, Congress passed an agreement to avert the “fiscal cliff” and prevent tax rates from rising on 98% of Americans. As part of the deal, the automatic spending cuts (sequestration) that were scheduled to go into effect on January 1 have been postponed for two months.
The measure also included an extension of the Farm Bill until September 30 and renewed the Food Donation Tax Deduction through 2013. Below is a breakdown of how the "fiscal cliff" agreement impacts the national network of food banks and the people we serve.
- Extends the Farm Bill until September 30
- No cuts to SNAP (food stamps) benefits
- SNAP Nutrition Education was cut by $110 million
- The Emergency Food Assistance Program (TEFAP) remains unchanged from previous Farm Bill
- Reinstates and renews the food donation tax deduction for 2012 and 2013
- Leaves deductions including the charitable tax deduction uncapped
Cuts to anti-hunger programs, as well as limits to the charitable tax deduction, were averted in this agreement, in large measure due to the tremendous advocacy efforts of our network of anti-hunger advocates like you. However, deficit reduction politics will continue to dominate Washington.
We can expect significant pressure to cut SNAP and other programs that help the people we serve to continue through 2013 as Congress makes decisions on the Farm Bill, federal spending, and deficit reduction. We will need to be ready for several important events over the next few months and advocacy will continue to be critical.
- Debt Ceiling vote: Mid-February. The Debt Ceiling will need to be increased in mid-February.
- Farm Bill Markup: End of February. Because there is a new Congress, both the House and Senate will need to rewrite the Farm Bill. The House has indicated they will markup the Farm Bill on February 27. The Senate is also expected to act quickly.
- Sequestration: March. The automatic spending cuts scheduled to go into effect January 1 were postponed until March. The threat of sequestration remains another leverage point to make additional spending cuts.
- Expiring Continuing Resolution: March. The Continuing Resolution will expire in March, meaning Congress will need to pass legislation to keep the government in operation.
Whether you called your member of Congress, participated in national call-in days, or simply spoke out against hunger, thank you for being an anti-hunger advocate and helping to protect food and nutrition assistance programs during the "fiscal cliff" negotiations. Keep up the good work in 2013!