The Farm Bill Meets the Fiscal Cliff

///The Farm Bill Meets the Fiscal Cliff
Working for a Better Texas

By Jeanie Donovan

The 2008 Farm Bill expired on September 30, 2012, after the House and the Senate were unable to reach agreement on new legislation.  Since then, Congress’ focus has largely shifted away from the Farm Bill to the pending “fiscal cliff” that could take effect on January 1, 2013. However, the reauthorization of the Farm Bill is one place where lawmakers could look to make spending cuts that would allow them to avoid the fiscal cliff.  Therefore, policy analysts and Washington insiders have speculated that the Farm Bill debate will get wrapped up into the fiscal cliff negotiations.  Experts have also pointed out that the issues and arguments at the heart of the Farm Bill debate are representative of the larger fiscal debate.  Any agreement or compromise on the Farm Bill may inform the resolution of larger policy issues regarding the federal safety net.

The Farm Bill is a massive piece of legislation that is reauthorized by Congress every five years.  In addition to funding conservation programs, the Farm Bill’s main components are food-related safety net programs:

  • Food stamps (SNAP) for low-income Americans
  • Crop insurance payments  (protection from crop failure or price decline)
  • Commodities (disaster insurance and subsidized loans for commodity farmers)

Total spending authorized by the last Farm Bill was estimated by the Congressional Research Service (CRS) to be $284 billion over five years (2008-2012). The size and nature of the Farm Bill’s major programs bring it to the center of the debate over the role of the government and the provision of a safety net for the most vulnerable Americans.  Some income support and crop insurance programs for farmers ensure that one bad growing season, like the drought this summer, doesn’t put a producer out of business.  SNAP benefits ensure that when a parent loses a job, they are still able to put food on the table for their children. In fact, the SNAP program lifted over 146,000 Texas households above the poverty line in 2010, following the Great Recession.

Despite the importance and success of these safety net programs in protecting Americans during difficult economic times, major cuts have been proposed by Congress in the drafting of the Farm Bill.  The size, focus, and projected impacts of the cuts vary in the versions of the bill drafted by the House and the Senate.  The House Agriculture Committee bill included a total of $35 billion in cuts over the next decade, with $16 billion of the cuts coming from the SNAP program.  The Senate-passed version included a total of $23 billion in spending cuts with SNAP cuts totaling $4 billion over 10 years.  The discrepancy between the two versions is one of the main disputes that stalled the Farm Bill negotiations prior to the election.

A similar debate is occurring in the fiscal cliff negotiations.  How deeply should safety net programs be cut? What is the role of the federal government in ensuring that basic needs are met?  The answers to these questions in Washington will have a significant impact on the strength of the safety net that supports many Texas children, senior citizens, working poor, and disabled.

Many economists argue that to bring down the federal deficit the federal government must both increase revenue and decrease total spending by finding savings in the budget through making strategic cuts to programs.  However, making major cuts to safety net programs is risky and irresponsible given the slow pace of economic growth. For millions of Americans, programs like SNAP bridge the gap between the rising cost of living and their ability to support their families working low-wage jobs. That is why every special committee that has examined ways to reduce the federal deficit so far has exempted SNAP and the other federal nutrition programs from budget cuts.

The Congressional Budget Office (CBO) estimates that SNAP enrollment will return to 2008 levels by 2022, as more Americans gain employment and financial security.  The savings will materialize without any changes to the current program structure. The outcome of both the fiscal cliff and Farm Bill negotiations will determine whether the country is willing to give millions of struggling Americans the support they need to get back on their feet.

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all. CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds to reach their full potential. We dare Texas to be the best state for hard-working people and their families.

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