The House Agriculture Committee is relying on made-up math to pay for a huge increase in crop subsidy and crop insurance spending, said analysts during a think tank discussion on Wednesday. “It makes voodoo economics look great,” said moderator Josh Sewell of Taxpayers for Common Sense, a budget watchdog group.
Nan Swift of the R Street Institute, an advocate of free market economics, said the suspect finances of the farm bill could inspire opposition among fiscal conservatives in the House and prevent a floor vote. “They’ve created an enormous hurdle by being greedy,” she said.
The Republican-controlled committee approved its bill, 31-21, with four Democratic crossover votes, on May 24. It calls for a $53 billion increase in crop subsidy and crop insurance outlays, a $30 billion cut in SNAP spending, and the repudiation of a Biden administration initiative on climate mitigation. According to the House plan, increased spending on the farm safety net would be offset by restricting USDA access to a $30 billion reserve fund. The Congressional Budget Office has said the savings would be only $8 billion.
“You have one committee trying to … force CBO to make up math,” said Swift during a discussion organized by the American Enterprise Institute. “They should be ashamed,” said Vince Smith, agricultural director at the AEI, which espouses free enterprise.
The Trump and Biden administrations used the USDA reserve fund to send tens of billions of dollars in trade war and pandemic relief payments to farmers. While the reserve is tapped from time to time for emergency farm aid, now “people are treating that as an entitlement, something we can spend every year,” which is an unprecedented change in attitude, said Joe Glauber, former USDA chief economist.
Members of the Senate Agriculture Committee would employ the same technique as the House panel to stretch the value of windfall funding for climate mitigation. They would shift the money into the USDA’s conservation programs. Under congressional budget rules, increased spending on conservation in the near term would mean a higher baseline in the future for conservation funding, now running at about $6 billion annually.
“One-time dollars are going to be used forever,” said Swift. The 2022 climate, healthcare, and tax law earmarked $20 billion for USDA conservation programs with a priority on climate mitigation practices. The House farm bill would allow the money to be spent on any conservation practice, regardless of whether it captured carbon or reduced greenhouse gas emissions.
“I don’t think we’ll see a farm bill for quite a while,” said agricultural economist Barry Goodwin of North Carolina State University. He cited persistent disagreements between Republicans and Democrats in Congress over elements of the legislation.
To watch a video of the AEI discussion, click here.