Farm Bill Would Increase Spending 47%

House and Senate farm subsidy supporters are pushing to enact the first big farm bill since 2008. Democratic and Republican supporters say that this year’s legislation will be a reform bill that cuts spending. Hogwash.

Last year, House farm subsidy supporters proposed a bill that would spend $950 billion over the next 10 years, while the Senate proposed a bill that would spend $963 billion. By contrast, when the 2008 farm bill passed, it was projected to spend $640 billion over 10 years. Thus, the proposed House bill would represent a 48 percent spending increase over the last farm bill, while the Senate bill would represent a 50 percent increase.

A new estimate of the House bill finds that it would spend $940 billion over 10 years, which would be a 47 percent increase over the 2008 farm bill. This new estimate is shown in the chart alongside the estimate of the 2008 farm bill.

The CBO score of the 2008 farm bill is here. Scores for the 2012 farm bill proposals are reported in this CRS report. And the new score of the House bill is here.

Since the 2008 farm bill, we’ve had five years of moderate inflation, which has eroded the value of dollars by about 8 percent. Thus, the 2013 House farm bill would increase real spending by 39 percent compared to the 2008 farm bill.

The Republican-controlled House Agriculture Committee says that its bill “saves taxpayer’s money,” “reduces deficit spending,” and “repeals outdated government programs.” That sounds good, and the GOP bill is officially scored to “save” $33 billion over 10 years. But that savings is against the CBO baseline of $973 billion in farm bill spending over 10 years, so the House bill can be said to “cut” spending by 3 percent.

Given today’s huge federal deficits, a 3 percent “cut” by Republicans is a joke in itself. But that’s only a cut against baseline, and since baseline spending has soared in recent years it’s no cut at all.

Consider, for example, that in 2008 CBO estimated that farm bill spending in 2014 would be $67 billion. But CBO is now estimating that farm bill spending in 2014 will be $99 billion. Thus, spending in this single year is $32 billion or 48 percent higher than the politicians promised it would be back in 2008. So you can see that the proposed GOP “cut” of $33 billion over 10 years is incredibly lame.

Despite the fact that politicians are claiming that the proposed new farm bill cuts spending, it’s just a mirage created by rising baselines. The truth is that the House farm bill would spend 47 percent more over 10 years than the last farm bill, or 39 percent more in inflation-adjusted dollars. 

For background, see this new study by Sallie James and this essay on the history and failures of farm subsidies. Also note that three-quarters of “farm bill” spending is for food subsidies, which you can read about here. And if you’re in D.C., come and hear about the farm bill at our Capitol Hill event at noon Thursday.