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1 1 (February 29, 2024)

handle is hein.crs/goveomj0001 and id is 1 raw text is: Congressional Research Service hforrming th legislative debate sin e 1914 Farm Bill Primer: Budget Dynamics Updated February 29, 2024 Congress is considering a new farm bill because provisions in the 2018 farm bill (P.L. 115-334) began expiring at the end of FY2023 (CRS Report R47659, Expiration of the 2018 Farm Bill and Extension in 2024). In November 2023, Congress enacted a one-year extension for FY2024 and the crop year 2024 (P.L. 118-22, Division B, § 102). 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 February 2024 Baseline In February 2024, CBO released a new baseline that updates spending projections. The May 2023 baseline may remain the scoring baseline until a spring baseline is released, at the discretion of the Budget Committees. Farm bills have 5-year and 10-year budget projections according to federal budgeting practices. Converting the baseline into farm bill titles and adding funding indicated in law for other farm bill programs, CRS estimates that the baseline for all farm bill titles is $682 billion over 5 years (FY2025-FY2029) and $1,401 billion over 10 years (FY2025-FY2034) (Figure 1). Figure I. Farm Bill Titles with Mandatory Baseline (billions of dollars, 10-year projected outlays, FY2025-FY2034) Total: $1,401 billion Crop Insurance, $124 Comxmodities, $62 Conservation, $58 3 tteI 10 Source: Created by CRS using the Congressional Budget Office (CBO) February 2024 baseline for the five largest titles and amounts indicated in law for programs in other titles. The relative proportions of farm bill spending have shifted over time. In the 2024 projection, the nutrition title is 82% of the farm bill baseline, compared with about 76% in 2018. The increase in the nutrition title since 2018 (73%) reflects consequences of the Coronavirus Disease 2019 (COVID- 19) pandemic, inflation, and administrative adjustments in the Thrifty Food Plan. For the non-nutrition agriculture programs, current projections are that outlays would be $253 billion over the next 10 years (Figure 2), $43 billion or 20% greater than the projection in 2018 (CRS In Focus IF12047, Farm Bill Primer: What Is the Farm Bill?).

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