The US Economy:An Update
Dave ShidelerLarry D. Sanders
March 2013Oklahoma State University
22
Agricultural Industry,
Agribusiness, Rural America
Global Markets
Jobs
Energy
Federal Budget
Capital
Macroeconomy & agriculture--linkages
Jobs: http://tipstrategies.com/archive/geograp
hy-of-jobs/
3
4
Net Farm Income & Direct Government Payments (1991-2013F)
020406080
100120140
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
net farm income
govt payments
NFI-G
5
$ Billion $128.2 b.
$10.9 b.
$117.3 b.
Note: OK producers received $110.8 mil. in govt. payments in 2011& $1.5 bil. in NFI; G/NFI = 7%.
0
20000
40000
60000
80000
100000
120000
140000
160000
Series2 Series1
$143.5 b.Exp.
$117 b.Imp.
$26.5 b.surplus
http://www.fas.usda.gov/gats/BICOReport.aspx
7.8 7.7
7
7.8%
7.7%
8
9http://www.oilnergy.com/1gnymex.htm
10
LQ%chg, 2002-
11%chg, 2010-
11Total Output 16%* 1%Agriculture 1.38 -12% -15%Mining 5.78 4%* 3%Utilities 1.33 6%* -8%Construction 1.01 -11%* 0.3%*Manufacturing 0.91 37%* 4%Wholesale Trade 0.88 18%* 6%*Retail Trade 1.08 21%* 2%*
Transportation 1.11 25%* 0.1%Information 0.61 19% 2%Finance 0.59 21% -0.1%
Real Estate 0.77 15%* -2%*Prof. & Tech. Svc 0.58 24% 4%Management 0.60 12%* 0.4%*Admin & Waste Svc 1.03 36%* 2%Educ. Svc 0.50 -3%* -1%Health Care 0.97 33%* 4%*
Arts & Rec 0.61 60%* 6%*
Accomm. Svc 0.88 20%* 3%Other Services 0.98 -13% -1%Government 1.37 7%* -1%
Job Gaining Industries (Top 5 in descending order of
jobs gained)
Job Losing Industries(Top 5 in ascending order of
jobs lost)
Annual Change (Dec ‘11 – `12) Annual Change (Dec ‘11 – `12)
Accommodation & Food Services (6,700; 5.2%)
Health Care & Social Assistance (-2,600; -1.4%)
Wholesale Trade (5,400; 9.0%) Prof., Scientific, & Tech. Services (-1,400; -2.2%)
Retail Trade (5,400; 3.2%) Information (-500; -2.1%)
Manufacturing (5,000; 3.8%) Other Services (-200; -0.3%)
Local Government (4,600; 2.3%)
Source: Compiled from OESC Economic Research and Analysis, “Oklahoma Employment Report,” December 2012
Source: “Gross Collections Dip in February,” News Release from State Treasurer Ken Miller, March 4, 2013. http://www.ok.gov/triton/modules/newsroom/newsroom_article.php?id=222&article_id=11052
Gross Receipts to State Treasury
Source: “Gross Collections Dip in February,” News Release from State Treasurer Ken Miller, March 4, 2013. http://www.ok.gov/triton/modules/newsroom/newsroom_article.php?id=222&article_id=11052
Source: “Gross Collections Dip in February,” News Release from State Treasurer Ken Miller, March 4, 2013. http://www.ok.gov/triton/modules/newsroom/newsroom_article.php?id=222&article_id=11052
If you’ve heard some pundit/politician say “the current crisis of sequestration is silly, stupid and unnecessary”, they are generally correct.
If you’ve heard them say “this will have catastrophic impacts on the general economy”, they are generally incorrect.
If you’ve heard them say “this will have little/no impact on the economy”, they are generally incorrect.
During fiscal negotiations in 2011, a compromise was reached to allow Congress & the President time to find needed cuts/revenues to reduce the budget deficit
Part of the agreement voted on & passed by both Houses was a backstop that, if they did not find solution, sequestration would impose automatic across-the-board cuts
The idea was they would surely do anything to avoid the sequester
The deadline for sequestration was subsequently extended to March 2013
“Most exempt programs are mandatory,and include Social Security and Medicaid; refundable tax credits to individuals; and low-income programs such as the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Supplemental Security Income. [child nutrition programs, commodity supplemental food, Commodity Credit Corp (commodity support programs & certain conservation programs*]
Some discretionary programs also are exempt, notablyall programs administered by the Department of Veterans Affairs. Also, subject to notification of Congress by the President, military personnel accounts may either be exempt or reduced by a lower percentage.”
Special rules may also limit cuts to selected programs, such as Medicare. (CRS, Jan 2013)
$85 billion in cuts required; half from defense; half from non-defense federal programs
Across-the-board Noted exemptions, make cuts in non-
exempted programs deeper Expect 5-10% cuts in non-defense
programs if sequester goes into effect Details unsure; awaiting OMB instructions
Funding category
Defense Nondefense
Nonexempt discretionary
9.4% 8.2%
Nonexempt mandatory
10% 7.6%
Medicare & mandatory selected health programs
n/a 2%
CRS, January 2013
2012 Federal Budget (Billion Dollars)
Mandatory, 2,079DOD/DHS/VA,
850
Interest, 340
Other, 490
2011 Budget Breakdown (Billion Dollars)
0 5 10 15 20 25 30 35
SBA
FAA
FBI
EPA
Commerce
Interior
Labor (no UIB)
Farm Programs
Energy
Justice
SNAP, Child nutrition programs, commodity supplemental food programs
Programs supported by CCC: “…commodity loan contracts entered into before the sequestration order shall not be reduced.”
“it is unclear whether the Section 256 special rule applies to any of the more recent farm commodity, conservation, and other programs that are funded by the CCC.” (CRS, January 2013)
Farm Credit Operating Expenses Fund & Insurance Fund, Biomass Energy Development, FCIC Fund
Secretary has indicated that this year’s Direct Payments will not be cut, but…
Suggested furloughs, esp. w/meat inspectors
NASS suspends some reports Also, moving some WIC applicants to
waiting lists because of cuts State/field offices could face furloughs
Delays in responding to queries/assistance Delays in processing paperwork Delays in checks Freeze in hiring replacements
Safety Net and Income programs are exempt Includes Medicaid, SNAP, CHIP, Child Nutrition Benefits,
TANF, SSI, Social Security programs, Veterans Benefits Loan obligations made prior to March 1, 2013 under
Low-Rent Public Housing Health Care cuts capped at 2%
Medicare service provider payments reduced by 2% Community health centers Indian Health Services
Federal Payroll associated with mandatory funds (military payroll is at the discretion of the President)
Programs subject to obligation limitations in appropriation (e.g., Federal Hwy aid; Hwy Traffic Safety Grants; Motor Carrier Safety Grants, Ops & Progs; Grants-in-Aid for Airports)
Dollar estimates unknown Distribution of impacts will vary across
state: OKC likely to get hit hardest due to
concentration of Federal activity (e.g., Tinker, FAA, Coast Guard)
Civilian employment at military installations (Enid, Lawton, Altus, Midwest City, McAlester)
Other Federal activities
Currently, “rural” used as an eligibility criteria only for Rural Development programs
Rural defined as any area other than:i. A city or town that has a population of greater
than 50,000 inhabitants;ii. And, any urbanized area contiguous and
adjacent to a city or town described in clause i. Exceptions1. Water and Wastewater Grants/Loans require
population to be no greater than 10,0002. Community Facilities program require population
to be no greater than 20,0003. Housing programs limited to 20,000 population
in nometro, 10,000 population in metro counties
“Rural in Character” exception (require Undersec. approval):
Urbanized area, as defined above, that has 2 points more than 40 miles apart AND is not contiguous with a city or town of population greater than 150,000 inhabitants;
And it is within ¼ mile of an eligible rural area. “Grandfather” clause (Housing only):
An area designed as “rural” prior to 1990 but became “not rural” due to the 1990 or 2000 Censuses is able to maintain its rural status until the 2010 Census data is available, and the population does not exceed 25,000, the place is still ‘rural in character’, and it has a serious lack of mortgage credit for lower and moderate-income families
Proposed definition:Anywhere except an incorporated municipality or unincorporated area greater than 50,000 total populationAllows the “Grandfather clause” to expireProposal to give preference in the evaluation criteria to smaller places
Unrelated, but not:Cotton County is now included in the Lawton, OK Metropolitan Statistical Area (i.e., it is now a METRO county)