April 16, 2014

House Farm Bill Fails and Chaos Reigns

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

Last week the House of Representatives unexpectedly failed to pass a new 5-year farm bill. Without legislation, policies covering everything from crop insurance and commodity subsidies to conservation programs and food stamps will revert to the 1949 farm bill -- the last permanent one written into law.

While the Senate passed its $955 billion bill earlier in June with 66 votes, the $940 billion House version was more contentious. Democrats objected to $20.5 billion in cuts to food stamp programs over the next 10 years, with the President threatening a veto, and Republicans objected partly to a $9 billion increase in crop insurance spending.

Both bills represent lost opportunities to fundamentally reform farm subsidy programs. One way to do that would be to follow the recent Simpson-Bowles proposal recommending elimination of direct and countercyclical payments along with crop insurance.

That would generate savings of at least $40 billion over 10 years while still implementing programs designed to protect farmers from dramatic risks. The Simpson-Bowles proposal also avoids cuts to the food stamp program and echoes a similar bipartisan proposal from the Domenici-Rivlin Debt Reduction Task Force.