Programs Without a Budget Baseline at the End of the 2008 Farm Bill
Released: 2014-04-11T00:00:00

Farm Bill Programs Without Baseline After FY2012

The 2008 farm bill (the Food, Conservation, and Energy Act of 2008, P.L. 110-246 )—as extended by the American Taxpayer Relief Act of 2012 ( P.L. 112-240 )—authorized most federal farm and food policies through the end of 2013. The Congressional Budget Office (CBO) baseline—a projection at a particular point in time of what future federal spending on mandatory programs would be under current law—serves as a benchmark for assessing changes. When new bills affect mandatory spending, the impact (score) is measured as a difference from the baseline.

Some 2008 farm bill programs had baseline beyond the end of the farm bill, while others did not. This funding issue—and the difficult budget dynamics that it caused for developing the 2014 farm bill—was identified by the chief economist of the House Agriculture Committee in early 2009. It was mentioned in Agriculture Committee hearings beginning in 2010.

From a budget perspective, programs with a continuing baseline are assumed to go on under current law, and have their own funding if policy makers want them to continue.

However, 37 provisions or programs that received mandatory funding in the 2008 farm bill did not have baseline beyond the end of the farm bill and were not assumed to continue under budget rules. These programs spanned most titles of the 2008 farm bill and could have cost between $9 billion to $14 billion to extend for five years, depending on the estimation approach ( Table 1 ). These amounts were nearly 3% of the $484 billion five-year baseline available to write the 2014 farm bill, or 14% of the $100 billion five-year baseline if the nutrition title was excluded.

Notable programs among this group were certain agricultural disaster programs, specialty crop research, organic research and certification, beginning/socially disadvantaged farmer programs, rural development, bioenergy, farmers market promotion, and some conservation programs.

Determining Programs That Do Not Have Baseline

CBO develops the budget baseline under the supervision of the House and Senate Budget Committees. Normally, a program that receives mandatory funding in the last year of its authorization will be assumed to continue in the baseline as if there were no change in policy. This allows major provisions such as the farm commodity programs or nutrition assistance to be reauthorized without assuming that funding will cease or following zero-based budgeting.

However, some programs may not be assumed to continue in the budget baseline beyond the end of a farm bill because:

the program did not receive new mandatory budget authority during the last year of a farm bill, or the baseline during the last year of a farm bill is below a minimum $50 million scoring threshold that is needed to continue a baseline, or the Budget Committees and Agriculture Committees did not agree to give the program a baseline in the years beyond the end of the farm bill—either to reduce the program's 10-year cost at the time the farm bill was written, or to prevent it from having a continuing baseline.

Status in the 2014 Farm Bill of the 2008 Farm Bill Programs Without Baseline

The enacted 2014 farm bill provides 29 of these 37 programs with new mandatory funding that totals more than $6.2 billion over the five-year period FY2014-FY2018 ( Table 1 ). A few programs even received permanent baseline for the second five years, including the Specialty Crop Research Initiative and the Rural Energy for America Program, or were incorporated into other programs.

The enacted law provides more mandatory funding to more of these 37 programs than either the House or Senate proposals. The combination of House-passed farm bills ( H.R. 2642 ) would have provided about $4.9 billion of mandatory funding (over five years) to 14 of the programs. The Senate-passed farm bill ( S. 954 ) would have provided more than $4.5 billion of mandatory funding for 25 of the programs ( Table 1 ).

The funding offset for these provisions comes from the larger reductions in mandatory spending in the 2014 farm bill, mostly from reductions in the farm commodities title.

The one-year extension of the 2008 farm bill in the American Taxpayer Relief Act of 2012 ( P.L. 112-240 ) did not provide any additional mandatory funding for any of the 37 programs without baseline. Therefore these programs did not have any mandatory funding in FY2013. In lieu of mandatory funding, the one-year farm bill extension made numerous "authorizations of appropriations" to allow discretionary funding for FY2013, but this did not provide funding. Discretionary funding could have been provided (but was not) by the appropriations committees in the FY2013 Agriculture appropriation. The proposals in 2012 that preceded the extension, but that were not enacted, did envision funding for many of these programs ( Table B-1 ).

Appendix A. Identification of Programs in the 2008 Farm Bill Without Budget Baseline After FY2012

The programs without baseline in the 2008 farm bill can be grouped in several ways: by title of the farm bill, by the degree of uncertainty in the cost, and by the duration of the use of mandatory funding. Additional details about the provision of mandatory funding for each program are provided in Table A-1 .

Programs Grouped by Title of the 2008 Farm Bill

Programs without baseline beyond FY2012 are spread among 12 of the 2008 farm bill's 15 titles ( Table A-1 ). The title with the most such provisions is the energy title (8), followed by conservation (5), nutrition (5), and horticulture and organic agriculture (5).

The ranking among the titles is much different based on the dollar amounts that might be needed to continue the provisions in the next farm bill. The title with the largest cost to extend programs without baseline is agricultural disaster assistance ($4.8 billion to $9 billion, depending on the estimation approach), followed by conservation ($2.1 billion to $2.7 billion), energy ($1.1 billion to $1.2 billion), and research ($383 million).

Programs Grouped by Degree of Cost Uncertainty

Farm bill funding typically is specified as either (1) a fixed dollar amount or (2) "such sums as necessary" to operate a program under specified provisions (the "type" column in Table A-1 ).

For the fixed dollar amount programs (type = "fixed"), the five-year cost to continue a provision is assumed to equal the five-year sum of the funding specified in the 2008 farm bill. Given the likelihood of a "baseline farm bill"—that is, a farm bill without additional funding to increase spending—or a farm bill facing deficit reduction, many people believe that it is unlikely that any or many of these programs could see an increase above what they received in the 2008 farm bill.

Fixed-dollar funding was specified for 33 of the 37 provisions in the 2008 farm that do not have baselines beyond 2012. The total five-year amount for these 33 programs was about $2.4 billion, which is about one-fourth of the total of the provisions without baseline ( Table A-1 ).

For the "such sums as necessary" programs (type = "estimated"), CBO estimates how much the provision is expected to cost. The estimated five-year cost to extend a provision was computed under two different approaches:

the CBO cost estimates at the time of enactment of the 2008 farm bill, and the most recent CBO baseline projection based on more recent estimates.

As with the fixed-dollar amounts, these are unofficial estimates in the absence of projections by CBO that would be based on actual proposed legislation. Presenting estimates from both approaches helps provide a range of costs and indicates where uncertainty is more apparent.

Only 4 of the 37 provisions without baseline have "such sums as necessary" funding. They account for the difference in the costs between the two approaches (the two cost columns). Although fewer in number than the fixed-amount group, they account for $6.7 billion to $11.5 billion (depending on the approach), which is about 80% of the total for provisions without baseline ( Table A-1 ).

In the 2008 farm bill, Congress indicated its relative priorities for programs by the tradeoff or allocation of budgetary resources among programs. If a proposal was deemed too expensive during legislative development, its parameters may have been tightened to reduce costs. After enactment, some "such sums as necessary" programs may become more expensive than first estimated. If selected for continuation, would the program continue at its current higher cost, or be redesigned in the next farm bill to cost less? Thus, which of the two approaches is better depends on whether one believes Congress would change program parameters, for example, to reduce a program that has become more expensive than initially expected, or whether Congress would continue current program provisions and pay a higher cost than in 2008.

Programs Grouped by Duration of Use of Mandatory Funding

In terms of the length of time that mandatory funding is used, 20 provisions in the 2008 farm bill provided mandatory funding only in the early years of the 2008 farm bill (FY2008-FY2011). These are estimated to cost $6 billion to $10 billion if they are extended in the next farm bill (depending on the approach to estimate costs). Seventeen other provisions provided mandatory funding for the entire duration of the farm bill. These are estimated to cost $3.2 billion to $3.8 billion if they are extended for five years (the "term" column in Table A-1 ).

This distinction may be important for some observers because programs without full-term funding may not be prioritized as highly as programs receiving full-term funding. Some of the provisions were given short-term funding to help begin implementation or to fund a backlog of unfunded obligations. Other programs received a short-term infusion of mandatory funding and may be authorized to receive discretionary appropriations. These programs may have authority to operate for the full term of the 2008 farm bill, regardless of the duration of mandatory funding.

The provisions listed with full-term funding do not have baseline either because their cost is relatively small (less than the $50 million scoring threshold in FY2012) or because the budget scoring at the time the 2008 farm bill was enacted did not assign a cost or give the program a baseline for the second five years of the scoring window (to make the bill less expensive, as discussed above in footnote 7 ).

Some of these programs are pilot programs or are new programs without a large or established constituency (e.g., local and regional foreign food aid procurement, or the national clean plant network). Six of them are bioenergy programs, and five affect specialty crops or beginning and minority farmers. Others are relatively established programs, such as the wetlands reserve and grasslands reserve programs in conservation.

In summary, 37 programs received mandatory funding in the 2008 farm bill, but do not have any baseline for a new farm bill because their funding stopped before FY2012, their amounts are below scoring thresholds, or they were intentionally unfunded for future years. An estimated $9 billion to $14 billion would be needed to continue these programs for five more years. Congress needed to find offsets from other sources to continue them, a difficult task in a tight budget environment.

Appendix B. Status of Programs Without Baseline in the 2012 Farm Bill Extension and Proposals

The one-year extension of the 2008 farm bill in the American Taxpayer Relief Act of 2012 ( P.L. 112-240 ) did not provide any additional mandatory funding for any of the 37 programs without baseline.

In lieu of mandatory funding, the farm bill extension made numerous "authorizations of appropriation" to allow discretionary funding for FY2013, but this did not provide funding. Discretionary funding conceivably could have been provided by the Appropriations Committees in a supplemental appropriation, an omnibus appropriation, or the full-year FY2013 appropriation ( P.L. 113-6 ). But in the deficit reduction and sequestration budget environment, no discretionary appropriations were provided to any of these programs.

The gap in mandatory funding during FY2013 for many of these programs was not necessarily intended. The House and Senate Agriculture Committees envisioned providing funding for many of these programs in the five-year farm bills that were developed in 2012 ( H.R. 6083 and S. 3240 ). The Senate 2012 farm bill, S. 3240 , would have provided more than $3.021 billion of mandatory funding over five years for 26 of the programs, and the House farm bill, H.R. 6083 , would have provided more than $2.025 billion of mandatory funding for 14 of the programs ( Table B-1 ).

Even an Agriculture Committee-developed farm bill extension would have funded some of these programs in FY2013. But the enacted extension did not provide any additional mandatory funding for any of these programs.