Following the release of the Congressional Budget Office’s (CBO) score of the Farm, Food, and National Security Act of 2024, House Committee on Agriculture Chairman Glenn “GT” Thompson (PA-15) issued the following statement:
"Bringing about a five-year farm bill is a long process, one filled with multiple steps and a lot of hard work. Today’s score from CBO is part of that process, but shows me there is still more to be done to make certain the bill - one that has been consistently praised by those across the agriculture value chain - can be brought across the finish line.
"Unfortunately, the score relies on the same methodology that has led CBO to underestimate Commodity Credit Corporation (CCC) outlays by more than $60 billion over the past seven fiscal years. I will continue to work with the Budget Committee and CBO to bring about a clear-eyed, defensible interpretation of restricting Section 5 discretionary authority.
"The Farm, Food, and National Security Act was built by rural America, for rural America. Its historic investments in the farm safety net, biosecurity, trade promotion, agricultural research, conservation, and so much more deliver certainty in times of crisis, when disastrous regulatory and Democratic policies are eroding the American dream. The continuous grandstanding and inaction of Senate Democrats is not working to honor the men and women who feed, fuel, and clothe our great nation. I implore Chairwoman Stabenow to release text so we can begin good faith conversations on producing a bicameral, bipartisan farm bill before years’ end."
Background:
The Congressional Budget Office’s (CBO) May 2023 baseline of USDA Farm Programs forecasts outlays of $1 billion per year in ‘Other Administrative CCC Spending,’ totaling $10 billion over ten years. That spending is primarily attributed to authority granted from Section 5 of the CCC Charter Act. The February 2024 baseline update forecasts annual outlays that range from $1 billion to $3 billion and total $17 billion over ten years. The June 2024 baseline mirrors the falling outlays described in the February 2024 baseline update, with a different total amount of $12 billion over ten years. Despite three significant changes across 13 months to CBO’s baseline, projections of spending under Section 5 for the next ten years remain significantly lower than historic outlays would suggest.
From fiscal years 2012 to 2017, Congress restricted the Secretary’s discretionary use of the CCC Charter Act. Since the restriction was dropped in fiscal year 2018, spending under Section 5 has averaged $10.7 billion annually. The Trump Administration used Section 5 to spend $28 billion on the Market Facilitation Program (MFP) in response to Chinese retaliatory tariffs and $20.5 billion on the Coronavirus Food Assistance Program (CFAP) in response to pandemic-related market disruption. This spending resulted in the need for $14 billion in off-cycle replenishment authorized by the Coronavirus Aid, Relief, and Economist Security (Cares) Act. The Biden Administration has funded at least 15 programs across various mission areas, totaling more than $12 billion. Despite a modest increase in the February 2024 baseline update, CBO’s forecasts of outlays since 2018 have been off by more than $60 billion.
Even when eliminating the completely unpredictable event that was COVID-19, an average of outlays over the six years since Section 5 authority was restored yields annual average Section 5 outlays of $7.3 billion. Considering a 10-year history, annual average Section 5 outlays are $6.4 billion, including four years of $0 in outlays while Section 5 authority was eliminated.
With outlays under authority granted by Section 5 of the CCC since 2018 averaging anywhere from $6.4 billion to $10.7 billion, and outlays in the June 2024 baseline averaging $1.2 billion, along with clear indications from both political parties of the intent to fully maximize spending under this authority, the forecast of Section 5 outlays does not match reality.
