In the recent Senate Agriculture Committee action which resulted in the approval of a new Farm Bill proposal and referral to the full Senate for a floor vote, there were essentially no recorded comments about the cost of the five year legislation. That is rather remarkable. Hundreds of billions of dollars are being spent, and no one talks about the entire cost of the legislation.
For all of the opposition to agricultural spending, it would seem like someone would hold up the Farm Bill and announce the cost of the bill. But that is not in the mindset of Congress at the moment. Instead, the proposal is being built on how much is not being spent. With everything in Washington keyed on budget reduction, the Farm Bill is not going to cost $500 billion over five years, or whatever the total might be. Instead, lawmakers are falling over themselves trying to effect savings, and the legislation that pass the Senate Ag Committee was designed to save $26.4 bil.
In fact the proposal had been modeled after a fall 2011 plan by the leadership of the House and Senate Ag Committees which was designed to save $23 billion over the 10 year federal budget baseline. But the Committee came up with additional savings, and just did not happen to announce the total cost. That is where the Congressional Research Service (CRS) comes into play, providing background to lawmakers and others about the cost of the legislation, what all is involved, and reasons for the policy.
CRS agriculture specialist Jim Monke says “Budget issues are one of the primary factors affecting the development of a new farm bill, particularly in a Congress that is focused on deficit reduction.” And adds, “Funding for the Farm Bill will be based on the Congressional Budget Office (CBO) baseline projection of the cost of the these farm bill programs.” And with the supervision of the House and Senate Budget Committees, “the process sets the mandatory budget for the farm bill.” Monke says the CBO makes periodic adjustments to the baseline to reflect changing economic conditions and the mandatory elements include provisions for commodity payments and crop insurance, “This allows major farm bill provisions such as the farm commodity programs or nutrition assistance to be reauthorized periodically without assuming that funding will cease or following zero-based budgeting.”
The number that you have not heard is the cost of the legislation, which is $995 billion over the course of the next 10 years, for the mandatory elements of the Farm Bill.
1. $772 billion or 78% is for domestic nutrition assistance programs, primarily the Supplemental Nutrition Assistance Program (SNAP).
2. $223 billion, is divided among various agriculture-related programs,
a. Crop insurance ($90 billion, or 9%),
b. Farm commodity price and income supports ($63 billion or 6%),
c. Conservation ($65 billion, or 7%).
d. 1% of the baseline is for international trade ($3 billion)
e. Horticulture programs ($1 billion).