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1 1 (June 16, 2023)

handle is hein.crs/govelzb0001 and id is 1 raw text is: Congressional Research Service Maam Inforrningl Ih egislative eate sin e 1914 Farm Bill Primer: Budget Dynamics Updated June 16, 2023 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. Farm Bills from a Bud get 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. Supplemental funding in recent years is not part of the baseline but may influence policy expectations. 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 Bils' 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 2023 Baseline In May 2023, CBO released the baseline that will be used to score bills during the 2023 legislative session. Farm bills have 5-year and 10-year budget projections according to federal budgeting practices. Converting the May 2023 baseline into farm bill titles and adding funding indicated in law for other farm bill programs, the baseline for all farm bill titles is estimated at $725 billion over 5 years (FY2024-FY2028) and $1,463 billion over 10 years (FY2024-FY2033, Figure 1). Figure 1. Farm Bill Titles with Mandatory Baseline 10-year projected outlays, FY2024-FY2033, billions of dollars Commodities, $69 Crop Isurance, $101 Conservation, $60 Trade, $5. 1m __10__ Source: Created by CRS using Congressional Budget Office (CBO) May 2023 Baseline and amounts indicated in law for programs in other titles. The relative proportions of farm bill spending have shifted over time. In the 2023 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 would be $240 billion over the next 10 years (Figure 2), 14% greater than at enactment in 2018.

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