The House Agriculture Committee’s farm bill would boost the federal budget deficit by $33 billion over 10 years, according to an official cost estimate released Friday by the Congressional Budget Office, which refused to change its stance on a budget offset intended to fund changes to commodity programs.
The funding gap could force House Republican leaders to either direct the CBO to change its budget estimate or to modify the legislation, if they want to put the bill on the House floor.
At issue is a provision in the bill intended to suspend USDA’s use of section 5 under its Commodity Credit Corporation spending authority, essentially a revolving fund.
CBO’s estimate of the potential savings is far short of what House Ag Chairman Glenn “GT” Thompson, R-Pa., needs to cover the cost of several commodity program provisions, including higher reference prices in the Price Loss Coverage program.
CBO disagrees both with how much USDA is likely to spend from the account and also how much would be saved from the farm bill provision. Because the provision “could be interpreted in multiple ways,” CBO said in the 27-page document it wasn’t clear the bill language would “prevent USDA from spending funds under its section 5 authority.”
Ultimately, CBO estimated there was a 50% probability the CCC provision could save $3.6 billion from fiscal 2025 through 2033.
Meanwhile, CBO estimated the bill would increase the cost of commodity programs by $43.4 billion over the same period. Other cuts in the bill lower the bill's net cost increase to $33 billion.
In a statement, Thompson said he would work with CBO and the Budget Committee, chaired by Rep. Jodey Arrington, a Texas Republican who represents a major cotton-producing district, “to bring about a clear-eyed, defensible interpretation of restricting Section 5 discretionary authority.”
Arrington could theoretically direct the CBO to give the CCC provision the budget score that Republicans want, but that could risk a political backlash in the House and won’t be accepted in the Democratic-controlled Senate in any case.
"Bringing about a five-year farm bill is a long process, one filled with multiple steps and a lot of hard work,” Thompson said. “Today’s score from CBO is part of that process, but shows me there is still more to be done to make certain the bill — one that has been consistently praised by those across the agriculture value chain — can be brought across the finish line.”
The top Democrat on House Ag, David Scott of Georgia, and Senate Ag Chairwoman Debbie Stabenow, D-Mich., immediately issued statements calling on Thompson to give up trying to pass this version of the bill.
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Enhancements to the PLC program, plus a provision that would allow the enrollment of up to 30 million base acres, would increase PLC payments by $34.9 billion, CBO said. Agriculture Risk Coverage payments would rise by $9.7 billion. Increases to marketing loan rates and changes to cotton marketing loans would add another $700 million to the cost of the bill.
The cost of the Dairy Margin Coverage program would increase by $300 million, in part because the bill would allow participating producers to update the amount of eligible production.
The cost of the federal crop insurance program is increased by $3.5 billion, in part by increasing premium subsidies for the Supplemental Coverage Option. Some $1.5 billion of that increase would come from increased administrative and operating funding for the insurance industry.
The bill would bring $13.2 billion in Inflation Reduction Act conservation funding into the bill, which would have the effect of permanently increasing funding levels for several other conservation programs.
Funding for the Environmental Quality Incentives Program would be increased from $2 billion a year under current law to $2.5 billion annually, for a total increase of $2.6 billion through 2033.
Funding for the Conservation Stewardship Program would rise from $1 billion to $1.4 billion for a total increase of $2.1 billion.
The Conservation Reserve Program doesn’t benefit from the IRA money but its cost would increase by $1.6 billion through 2033 because of changes made by the bill, including increased benefits for landowners.
The bill cuts a net $20 billion from the nutrition title by putting restrictions on future updates of the Thrifty Food Plan that would save an estimated $29.4 billion. TFP is an economic model of eating costs that are used to set Supplemental Nutrition Assistance Program benefits.
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