Emily Hatch is a law student in the HLS Food Law & Policy Clinic and a guest contributor to this blog.
On February 15, 2023, the Congressional Budget Office (CBO) released its most recent budget baseline for “USDA Farm Programs,” which projects a ten-year baseline cost for the relevant farm bill programs of over $1.4 trillion (about $140 billion each fiscal year). The baseline is a policy tool that helps legislators and stakeholders understand the budgetary impacts of potential policy changes by analyzing projected costs of certain farm bill programs. Because Congress and stakeholders use the baseline to guide policymaking decisions, it provides an important backdrop and reference point for the development of the next farm bill.
For congressional budget novices, some brief background may be helpful in understanding how the baseline will inform this year’s farm bill negotiations. The CBO was established by the Congressional Budget Act of 1974. It is a nonpartisan office that provides Congress with research and technical analysis regarding the federal budget. This analysis includes an annual Budget and Economic Outlook report, as well as baseline projections for a number of selected programs. The programmatic baselines may be released up to three times per year. They indicate what spending on the relevant programs will look like for the next ten years, assuming that the programs remain unchanged. Baselines thus serve as a benchmark against which Congress can measure the budgetary effects of proposed legislation, which might have a “positive score”—meaning that the bill would increase spending relative to the baseline—or a “negative score”—meaning that the bill would decrease spending relative to the baseline. Proposed legislation can also be budget-neutral, meaning that the bill’s projected cost is the same as the benchmark set by the baseline.
The Farm Programs baseline includes projected costs only for the farm bill’s mandatory spending programs. Mandatory spending covers expenditures that are treated as entitlements, so the programs receive funding as needed from the Treasury as soon as Congress passes the farm bill. Nutrition assistance—including the Supplemental Nutrition Assistance Program (SNAP)—and commodity programs—such as the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs—make up the bulk of the farm bill’s mandatory spending budget, which also includes crop insurance and conservation programs. In contrast to mandatory spending programs, discretionary spending programs only receive funding if Congress allocates it through the annual appropriations process. Farm bill discretionary spending includes rural development, research, and trade programs, among others.
Once the relevant congressional committees develop consolidated drafts of the farm bill, CBO will score those proposed bills. At that point, negotiations will proceed over where to increase and decrease farm bill program spending. In the meantime, though, the baseline itself has given rise to preliminary policy commentary. In February, Chairman G.T. Thompson of the House Committee on Agriculture and Ranking Member John Boozman of the Senate Committee on Agriculture, Nutrition, and Forestry released statements expressing concern about increases in SNAP spending that are reflected in the new baseline. Responding to those cost concerns, Senator Dusty Johnson introduced a bill that would impose more stringent work requirements on some SNAP recipients.
But as Senate Committee on Agriculture, Nutrition, and Forestry Chairwoman Debbie Stabenow pointed out in a recent hearing on USDA’s nutrition programs, SNAP spending increases during economic downturns in order to meet increased food insecurity. The new baseline also reflects long-overdue updates—mandated by the 2018 Farm Bill—to the Thrifty Food Plan (TFP), a food plan used as a basis for SNAP allotments that estimates the cost of a healthy diet for a “reference” family of four. Although such cost and enrollment increases mean that the proportion of mandatory spending dedicated to SNAP has increased relative to that of other programs, this counter-cyclical change does not affect those other programs’ budgets. Rather, the anticipated decreases in commodity spending reflect projected changes based on higher commodity prices, which will decrease the total cost of price support payments issued through programs like ARC and PLC.
Because SNAP is critical to preventing food insecurity, FBLE strongly advocates expanding rather than restricting access. FBLE’s Food Access and Nutrition Report describes a number of legislative opportunities related to SNAP, including interventions like eliminating the eligibility time limit for able-bodied adults without dependents (ABAWD), removing the waiting period for immigrants, and updating the eligibility formula and benefit calculation. The report also discusses opportunities for modernizing SNAP technology and promoting access to healthier food options for SNAP recipients. Many of these suggestions are in line with the Biden Administration’s 2024 federal budget request, which highlights the SNAP program as a priority.
Instead of targeting SNAP, legislators concerned about the efficiency of farm bill programs should focus on reforming commodity programs and crop insurance. FBLE’s Farm Viability Report describes how, as currently administered, those programs primarily benefit the largest and wealthiest producers. For example, ARC and PLC compensate farmers for drops in commodity pricing, guaranteeing a certain minimum income. But as the report explains, ARC/PLC payments tend to go to large monoculture producers that are more capable of weathering price fluctuations. Likewise, federal crop insurance premium subsidies disproportionately benefit very large farming operations and disincentivize proactive risk-management efforts. These inefficiencies could be addressed through interventions like lowering the adjusted gross income cap for receiving commodity payments or implementing means testing for the federal crop insurance subsidy program. In short, Congress should act to redirect farm bill funding to producers who need it the most while preserving SNAP’s vital food insecurity safety net.
The views and opinions expressed on the FBLE Blog are those of the authors and do not necessarily reflect the official policy or position of FBLE. While we review posts for accuracy, we cannot guarantee the reliability and completeness of any legal analysis presented; posts on this Blog do not constitute legal advice. If you discover an error, please reach out to contact@farmbilllaw.org.
