CBO Update Confirms, Adds To Farm Bill Savings
On April 14, more than two months after enactment of the Agricultural Act of 2014 (the Farm Bill), the Congressional Budget Office (CBO) released its revised estimates of the spending baseline for farm policy.
During the long debate on the Farm Bill, proponents touted savings that the Farm Bill was expected to produce — $23 billion in reduced spending in total and $15 billion in savings from the “farm” portions of the Farm Bill alone (titles other than nutrition programs).
Throughout this same long debate, paid critics and opponents of the Farm Bill wailed claiming that the savings would never materialize — specifically that the new farm policies that were to replace direct payments to farmers would in fact spend more.
Question: So what did CBO say in its first baseline update after the Farm Bill?
Answer: For the policies that replaced direct payments (ARC and PLC), the overall estimated cost for the 10-year period 2014-2023 is expected to be $2.915 billion LESS than originally estimated. In addition, for crop insurance, spending under the new baseline is reduced by another $694 million. Together, these represent a 24% increase to the original $15 billion in estimated savings under these “farm” portions of the Farm Bill.
Only time will tell if in fact these savings come to pass, but it is certainly good news in the present, and builds on the record of success created by recent farm bills.
The 2002 Farm Bill’s safety net ended up spending roughly $36 billion less than what was predicted at the time of its passage. The 2008 Farm Bill had a similar positive result. Here’s hoping the positive start on this new 2014 Farm Bill continues as it provides an important and stable foundation for an industry that could not be more important to the welfare of our nation.