LegiStorm

Summary:

Congress returns to the farm bill about every five years to establish an omnibus policy for food and agriculture. Deficit reduction influenced the Agricultural Act of 2014 (P.L. 113-79; 2014 farm bill) throughout its legislative development. Related political dynamics sometimes forced Congress to make difficult choices concerning how much total support to provide for agriculture and nutrition, and how to allocate it among competing constituencies. The farm bill authorizes programs in two spending categories: mandatory and discretionary. Mandatory programs generally operate as entitlements; the farm bill pays for them using multi-year budget estimates when the law is enacted. Discretionary programs are authorized for their scope, but are not funded in the farm bill; they are subject to appropriations. While both types of programs are important, mandatory programs often dominate the farm bill debate. At enactment of the 2014 farm bill, the Congressional Budget Office (CBO) estimated the total cost of mandatory programs would be $489 billion over the next five years (FY2014-FY2018). Four farm bill titles account for most of the mandatory spending. Of the projected net outlays over five years, about 80% ($391 billion over five years) is for the Supplemental Nutrition Assistance ProgramSNAP, formerly food stamps. Farm commodity support and crop insurance are expected to account for a combined 13% of mandatory program costs ($65 billion), with another 6% of costs in USDA conservation programs ($28 billion). Programs in all other farm bill titles are expected to account for about 1% of all mandatory expenditures. In terms of change from the former farm bill, the budgetary impact of the 2014 farm bill is measured relative to what the 2008 farm bill would have spent had it continuedthat is, the CBO baseline. The May 2013 CBO baseline projected that the mandatory programs of the 2008 farm bill would have spent $973 billion over the next 10 years (FY2014-FY2023). This baseline already had been reduced by $6.4 billion to reflect the effects of sequestration. Compared to the baseline, the 2014 farm billat enactmentreduced projected spending and the deficit by $16.6 billion (-1.7%) over the 10-year period FY2014-FY2023. Over the 5-year period through FY2018, the enacted farm bill reduces projected spending by $5.3 billion (-1.1%). If the baseline had not already been reduced by sequestration, the enacted 2014 farm bill could have been credited for reducing spending by $23 billion over 10 years. But since sequestration already had been factored into the baseline, the official score is the $16.6 billion 10-year reduction. The net reduction is composed of some titles receiving more funding than in the past, while other titles receive less. Titles with reductions provide budgetary offsets to pay for titles with increased spending, and the rest of the savings go to deficit reduction. Budgetary savings totaling $26.3 billion are scored in the nutrition, farm commodity subsidies, and conservation titles. Additional funding totaling $9.8 billion is provided for the crop insurance, research, bioenergy, horticulture, rural development, trade, and forestry titles. The enacted 2014 farm bill saves less (is projected to spend more) than either the House-passed or Senate-passed proposals. Over 10 years, the House-passed proposal would have reduced spending by $51.9 billion (-5.3%); the Senate-passed proposal would have reduced spending by $17.9 billion (-1.8%).