Posted by: Phillip Fraas
March 06, 2007

Early last month, Congress received the President's budget proposals for fiscal year 2008, which begins October 1 of this year; and the package is now being examined by the congressional budget committees, which have the task of putting together the congressional budget resolution for fiscal 2008 spending. This budget resolution will contain spending instructions that will affect the way the new farm bill is drafted.

THE CONGRESSIONAL BUDGET PROCESS: Here's how the congressional budget process works. The budget committees are now holding hearings and receiving the recommendations from the other committees that actually draft spending legislation. Then, the budget committees mark-up a "concurrent resolution" on the fiscal 2008 budget later this month or early April.

The concurrent resolution is not like appropriations bills or the farm bill, which actually authorize Executive Branch agencies to spend money. The concurrent resolution is just an internal document within Congress that sets limits on later spending legislation such as appropriations or the farm bill. Further, the resolution doesn't spell out precisely how much money to allocate to each piece of legislation. It just tells the committees with spending jurisdiction how much can be spent in each budget category, and leaves it to them to craft programs that meet the budget limits it imposes.

Once the budget committees come up with a proposal, the House and Senate vote on it and then meet in conference to resolve any differences they have on the resolution. Once conference is completed, the final version of the resolution is supposed to be presented for approval by both houses no later than April 15. Typically, Congress doesn't quite meet that deadline. As often than not, however, Congess does complete its work on the budget by mid May.  

THE BUDGET FOR THE FARM BILL: The President's February budget package included his recommendations for funding the new farm bill. And, just last Thursday, March 1, the House Committee on Agriculture submitted its recommendations to the House Committee on the Budget for fiscal 2008 agricultural spending legislation, including the farm bill. The Senate Committee on Agriculture, Nutrition, and Forestry can be expected to take similar action very soon.

The President's budget proposed a modest increase in spending over the current "baseline," which is the amount that budget experts estimate will be spent in the future if the current farm bill programs continue without change. The President's budget projects the 10-year baseline for the farm bill (for fiscal years 2008 through 2117) at $619 billion, and would increase that number by $5 billion if its farm bill proposals become law.

The biggest part of the farm bill spending by far is for nutrition programs, primarily food stamps. USDA projects the 10-year cost of the farm bill nutrition programs to be $436 billion.

By contrast, spending on the farm income and price support programs during this period is projected by USDA to be $75 billion, and USDA proposes cutting those programs by $4.5 billion. And, of importance to those with a direct interest in the farm bill programs, the USDA proposal would shift money among these programs--reducing spending on marketing loans and counter-cyclical payments, cutting spending further by tightening payment limits, and then funneling some of the savings into increased direct payments.

Last week's budget recommendations of the House Agriculture Committee released to the public did not include specific dollar recommendations. But, the four-page letter signed by both the Chairman and Ranking Republican did make clear the Committee's preference for just extending the the current farm bill programs without change. Also, it asks the House Budget Committee for an increase in its spending authority over the baseline to accommodate additional funding requested by the Administration in such areas as renewable energy, MILC payments, support for fruit and vegetable producers, and expanded soil and water conservation efforts.   

Assuming that the Senate Agriculture Committee seeks similar additional budget resources too (which is likely), the stage will be set for the budget committees to act on how much money the new farm bill should get. Given that the budget committees will be faced with the daunting task of reducing budget deficits, it will be no easy task for them to find the extra money the agriculture committees will want. If they do, the farm bill process will be much easier than if they keep the current baseline or even reduce it. If the latter happens, the agriculture committees will have to make tough farm bill choices: Money for renewable energy or for conservation? New funding for fruit and vegetable producers, or in the alternative keeping the current protection these growers have from grain and cotton growers who receive farm bill benefits planting their crops? The list of tough choices could go on and on.

 All the agriculture committees can do now is wait for the budget resolution to pass. Then, they can start working on the farm bill knowing how much they can spend. Then, they will know whether they are going to have a long hot summer or not. Stay tuned.   

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