Ag Policy Blog
Chris Clayton DTN Ag Policy Editor

Friday 10/25/13

By the Numbers: Breaking Down the House and Senate Farm Bills

Let's talk about some mind-numbing numbers on the farm bill.

That said, there are two great sources for numbers and reports, the Congressional Budget Office and the Congressional Research Service

It's always an odd thing with Congressional Budget Office numbers. One, the CBO scores the costs of all legislation on a 10-year projection. Of course, the farm bill is a five-year piece of legislation, though sometimes it is six years or seven years until a new one is enacted. Sometimes, the CBO score is a guessing game because the report may only show how a piece of legislation increases or decreases a budget score compared to the 10-year baseline. Thus, you have to know the baseline before you can begin to understand the impact.

Heading into next week's conference talks, the Congressional Research Service issued a new report breaking down some of the financials on the farm bill. The report offers a little bigger picture on the farm bill by breaking down the individual titles and where the House and Senate differ fiscally in their respective versions of the legislation.

So here we go:

The Congressional Budget Office projected in May that if the 2008 farm bill were allowed to just carry forward that it would cost $973 billion until Fiscal Year 2023.

The breakdown goes like this:

Nutrition programs: $764 billion, or 79% of the total.

Crop insurance: $84 billion, 8.6%

Conservation: $62 billion, 6.3%

Commodity programs: $59 billion, 6%

Trade, $3.4 billion, Horticulture, $1.1 billion, Miscellaneous, $1.4 billion.

Sequestration has trimmed that CBO baseline by $6.4 billion, putting the 10-year score at $966 billion and change.

Sequestration is confusing to factor in because of the way the House and Senate Ag Committees are making cuts. For instance, sequestration includes a $408 million a year cut to Direct Payments, totaling $4 billion in cuts over 10 years. Yet, both committees eliminate Direct Payments, a program that now cost about $4.5 billion annually.

Thus, the budget score shows the Senate farm bill would reduce the baseline by $17.9 billion over 10 years. Senators, however, roll in the sequestration cut to say the bill would save $24.3 billion.

The House bill would reduce the baseline by $51.9 billion over 10 years, or $58.3 billion with sequestration factored in.

Nutrition is a Ten-fold Problem

The Senate score on nutrition is $3.9 billion, or a .5% cut over 10 years.

The House bill cuts $39 billion, or 5.1%.

Farm Cuts are an AGI Proposition

For everything outside of nutrition, the Senate cuts $13.9 billion over 10 years, a 6.7% cut from the baseline. The House cuts $12.9 billion, a 6.2% cut.

The difference? The Senate bill has the amendment from Sens. Tom Coburn, R-Okla., and Dick Durbin, D-Ill., to reduce the premium subsidy on crop insurance for people making $750,000, or $1.5 million for married couples. That provision is projected to save $1 billion over 10 years.

Overall, however, the House and Senate do distribute their cuts in farm programs in slightly different manner. Yet, the fact that the House and Senate have a relatively narrow gap on everything but nutrition programs reflects that almost everything outside of the nutrition cuts is well within the ballpark for negotiations.

Breaking down individual titles,

The differences in budget scores over 10 years include:

Nutrition: The Senate spends $760.48 billion over 10 years while the House spends $725.4 billion. The difference is $35 billion.

Commodity programs: The CBO baseline for commodity programs is $58.76 billion. Senate spends $41.3 billion, cutting projected commodity programs by $17.4 billion; The House spends $40 billion with a net cut for commodities of $18.7 billion. Difference: House cuts $1.3 billion more.

Conservation programs: The Senate spends $58 billion over 10 years, cutting $3.51 billion from the baseline; The House spending $56.7 billion and trims $4.83 billion. Difference: House cuts $1.32 billion more.

Crop insurance: The Senate spends $89.1 billion over 10 years, increasing crop insurance by $5 billion; The House spends $93 billion, increasing crop insurance by $8.9 billion. Difference: House boosts spending by $3.9 billion.

Other title differences between the two bills:

Trade: The House and Senate are in alignment here. Both spend $3.58 billion over 10 years.

Horticulture: The baseline is $1.06 billion. The Senate spends $1.311 billion, or $250 million above the baseline. The House spends $1.616 billion or $555 million above the baseline.

Energy: The CBO baseline is $243 million. The Senate spends $1.1 billion, a boost of $880 million over 10 years. The House sticks with the CBO score of $243 million.

Research: The baseline was $111 million over 10 years. Both committees offer significant boosts. Senate spends $892 million over 10 years while the House spends $871 million.

Rural Development: The Senate spends $241 million over 10 years while the House spends $109 million, a difference of $132 million.

When you get down to the bottom line, the Senate farm bill scores out at $955 billion over 10 years while the House bill would cost $921 billion.

http://www.fas.org/…

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Posted at 1:25PM CDT 10/25/13 by Chris Clayton
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