CBO Releases Updated Estimate of Farm Bills
Update: This blog has been updated to include numbers from the CBO score of the House farm bill.
As we have written previously, the American Taxpayer Relief Act extended the provisions of the 2008 farm bill for one year, despite both chambers producing farm bills and the Senate passing its one. Lawmakers have until January 1 to come to a compromise and avoid reverting to the 1949 permanent farm bill, which would have major negative implications for deficit reduction and agriculture policy.
In an effort to work toward a bipartisan agreement, leaders in both the House and Senate have committed to moving farm bills in the coming weeks. The Senate Agriculture, Nutrition, and Forestry Committee will mark up S. 10 tomorrow, and the House Agriculture Committee will take up its bill on Wednesday. The major difference between the two bills is how they deal with nutrition programs -- the House version would cut $21 billion from nutrition programs, compared with $4.1 billion in cuts in the Senate bill -- as well as the design of crop insurance programs and the replacement for direct commodity payments.
|2014-2023 Savings/Costs (-) in the Farm Bills (billions)|
|New Senate Estimate||New Senate Estimate w/ Sequester Repeal||New House Estimate||New House Estimate w/ Sequester Repeal|
|Crop Insurance Programs||-$5||-$5||-$9||-$9|
|Subtotal, Farm Programs||$14||$20||$13||$19|
The Congressional Budget Office has revised its cost estimates of the Senate bill, finding that the legislation would reduce spending by $18 billion over the 2014-2023 period compared to curent law. An earlier estimate of the Senate bill this year showed the legislation would save $13 billion. CBO estimates the new House bill will save $33 billion over ten years relative to current law and $40 billion assuming that the sequester is repealed.
The CBO also included a savings estimate if Congress passed legislation repealing the sequester. Eliminating this portion of the sequester and subsequently enacting the Senate farm bill would produce $24.4 billion in savings under the revised baseline, increasing the bill's deficit reduction by one-third.
Leaders in both chambers seem hopeful about moving a farm bill under regular order well before the January 1 deadline, and the Agriculture Committees have produced serious draft legislation that could both reduce the deficit and modernize our outdated agriculture programs. We hope that they are aggressive in achieving savings, as agriculture reforms are an area of consensus in terms of deficit reduction.