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1 1 (October 17, 2022)

handle is hein.crs/govejbc0001 and id is 1 raw text is: Congression Research Servic 5~2 Informning helegislative debate sin ce 1914 Farm Bill Primer: Budget Dynamics S October 17, 2022 Congress may consider a new farm bill in 2023 because provisions authorized in the 2018 farm bill (P.L. 115-334) begin expiring at the end of FY2023. From a budgetary perspective, many farm bill programs are assumed to continue. Supplemental funding in recent years may influence policy expectations for a new farm bill. Farm Bills from a Budget Perspective Federal spending for agriculture is divided into two main categories-mandatory and discretionary spending: * Mandatory spending is authorized primarily for the farm commodity programs, conservation, crop insurance, and the nutrition assistance programs. A farm bill authorizes outlays for mandatory programs when the law is enacted and follows budget enforcement rules. * Discretionary appropriations are authorized, but not provided, for most other programs, including rural development, research, and credit programs. A farm bill sets program parameters. Funding may be provided in subsequent appropriations acts that follow separate budget enforcement rules. Some farm bill programs have received both types of funding. Discretionary appropriations are the primary source for many programs, but mandatory spending usually dominates the farm bill budget debate and is the focus here. Importance of Baseline to the Farm Bill The Congressional Budget Office (CBO) baseline is a projection at a particular point in time of what future federal mandatory spending would be under the assumption that current law continues. The baseline is the benchmark against which proposed changes in law are measured. When a bill is proposed that would affect mandatory spending, the score (cost impact) is measured in relation to the baseline. Changes that increase spending relative to the baseline have a positive score; those that decrease spending relative to the baseline have a negative score. Increases in a bill's total cost beyond the baseline may be subject to budget constraints, such as pay-as-you-go (PayGo) rules. Reductions from the baseline may be used to offset costs for other provisions that have a positive score or used to reduce the federal deficit. The annual budget resolution determines whether a farm bill is held budget neutral or can increase or must decrease spending. Recent Farm Bills' Budget Positions Over the past two decades, farm bills have had both positive and negative scores relative to their baselines. The 2002 farm bill had a positive score and increased spending by $73 billion over 10 years under a budget resolution during a budget surplus. The 2008 farm bill was budget neutral, although it added $9 billion to outlays over 10 years by using offsets from a tax-related title. The 2014 farm bill had a negative score, reducing spending by $16 billion over 10 years. The 2018 farm bill was budget neutral and offset reductions in some titles with increases in others. CBO's May 2022 Baseline As of this writing, the official baseline to write a farm bill in 2023 does not exist. CBO is expected to release an official scoring baseline for the 2023 legislative session in the spring of 2023, which would cover the 10-year period FY2024-FY2033. Currently, the May 2022 CBO baseline is the best indicator of future funding availability. Farm bills have 5-year and 10-year budget projections according to federal budgeting practices. Using the May 2022 data and funding indicated in law for other farm bill programs, the baseline for farm bill programs is estimated at $648 billion over 5 years (FY2023-FY2027) and $1,295 billion over 10 years (FY2023-FY2032, Figure 1). Figure 1. Farm Bill Titles with Mandatory Baseline 10-year projected outlays, FY2023-FY2032, billions of dollars Source: CRS, using CBO May 2022 Baseline and amounts indicated in law for programs in other titles. The relative proportions of farm bill spending have shifted over time. In the 2022 projection, the Nutrition title is 84% of the farm bill baseline, compared with about 76% when the 2018 farm bill was enacted. Increases in the Nutrition title since 2018 reflect consequences of the Coronavirus Disease 2019 (COVID-19) pandemic, inflation, and administrative adjustments pursuant to the 2018 farm bill. For the non-nutrition agriculture programs in the farm bill, current economic projections are that program outlays Conservation, $59 Commodities, $56 Crop Ins., $80 10

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