issues are among the primary factors affecting the development of a new farm
bill, particularly in a Congress that is focused on deficit reduction. The
Senate passed its version of a 2012 farm bill (S. 3240) on June 21, 2012.
The House Committee on Agriculture reported its version (H.R. 6083) on
July 11, 2012. House floor action and/or reconciliation of the differences between
the chambers is pending.
The Congressional Budget Office (CBO) projects that current farm bill programs,
if they were to continue from the 2008 farm bill, would cost nearly $1
trillion over the next 10 years. Compared to this “baseline,” the
Senate-passed farm bill, S. 3240, would reduce spending by $23.1 billion (-2.3%);
and the House-reported bill, H.R. 6083, would reduce it by $35.1 billion
One of the most noticeable budget differences between House and Senate bills is
the reduction proposed for the nutrition title, with the Senate reducing
the nutrition baseline by $4 billion and the House bill reducing it by $16
billion. This has emerged as one of the most important political issues
for the bill, especially in the House, with some calling for less reduction and
others for more. For crop insurance and farm commodities, the combined
change for these titles in the House bill (-$14.1 billion) is similar to
the combined crop insurance and commodities subtotal in the Senate bill
(-$14.4 billion), even though policy approaches differ between the bills.
The $23 billion 10-year reduction in the Senate bill is consistent with a joint
House-Senate Agriculture committee proposal to the Joint Select Committee
on Deficit Reduction in the fall of 2011. The $35 billion 10-year
reduction in the House bill is consistent with reconciliation instructions
in the House budget resolution for FY2013.
Funding to write the next farm bill is based on CBO baseline projections of the
cost of farm bill programs, and on varying budgetary assumptions about
whether programs will continue. The CBO baseline is an estimation
(projection) at a particular point in time of what federal spending on
mandatory programs likely would be under current law. When new bills are proposed
that affect mandatory spending, their impact (or “score”) is measured as a
difference from the baseline. This process sets the mandatory budget for
considering a new farm bill.
The budget situation is more difficult and uncertain this year than for recent
farm bills because of the attention on the federal debt. Uncertainty about
government-wide deficit reduction plans is beyond the control of the
agriculture committees and may not be resolved for months. Several high-profile
congressional and Administration proposals for deficit reduction are
specifically targeting agricultural programs with mandatory funding.
Across-the-board reductions to most farm bill programs also could occur in
2013 unless Congress avoids an automatic budget sequestration process. Moreover,
some 2008 farm bill programs do not have a baseline to continue, and some
budgeting rules have changed since the last farm bill.
The desire by many to redesign farm policy and reallocate the remaining farm
bill baseline—in a sequestration and deficit reduction environment—is
driving much of the farm bill debate this year. Political dynamics
concerning sequestration and broader deficit reduction goals leave open difficult
questions about how much and when the farm bill baseline may be reduced. In
this context, Congress faces difficult choices about how much total
support to provide for agriculture, and how to allocate that support among
Date of Report: November 2, 2012
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