Farm Bill Stalled in Congress

Yesterday, a group of farmers and farm state lawmakers gathered in Washington to rally for the passage of a farm bill, on which progress has stalled according to the New York Times. The Senate earlier this summer passed a bill on a 64-35 vote with bipartisan support. Two weeks later, the House Agricultural Committee released a companion bill containing many similarities but with greater cuts in nutrition programs. So far, the House bill has not been brought to the floor, and it appears more likely that lawmakers will rely (subscription required) on a one-year extension rather than a five-year bill. It seems likely that the one-year extension would simply maintain the status quo.

For background, both bills repeal direct crop payments, saving $44 billion over ten years, and replace them with an ostensibly less expensive insurance program that triggers payments when gross revenue falls below a specified amount (referred to as a "shallow loss" program). This would result in net savings of $19 billion in the Senate bill and $23 billion in the House bill, the difference being due to different thresholds for triggering payments.

The major difference between the House and Senate versions is on nutrition programs. Both target a provision that allows a bump up in benefits for food stamp recipients that recieve minimal energy assistance, raising the energy assistance threshold from $1 to $10; however, the House bill goes further by also restricting "catagorical eligibility," (eligibility based on being in other programs) to cash assistance programs. This provision saves an additional $12 billion.

Ten-Year Savings/Costs (-) in the Farm Bills (billions)
  Senate House
Commodity Programs $19 $23
Conservation Programs $6 $6
Crop Insurance Programs -$5 -$10
Other -$2 -$1
Subtotal, Farm Programs $19 $19
Nutrition Programs $4 $16
Total $23 $35

Source: CBO 

We have said that neither farm bill goes far enough in terms of savings, and there is a danger that the shallow loss program could well exceed its projected cost if there is a drop in crop prices. Still, the savings in either bill are not insignificant. Considering the large similarities, the two chambers should be able to come to some sort of agreement--one that is more aggressive on savings like the 2011 House Republican budget or the President's budget--rather than just continue the more costly status quo.