On February 20, 2003, the President signed into law the FY2003 omnibusappropriations act ( P.L. 108-7 , H.J.Res. 2 ), which includes $74.25billion in regular FY2003 funding for USDA and related agencies. Of this amount,$17.545 billion is for discretionary programs. Not included in the total is $3.1 billionin supplemental disaster assistance provided by the measure, primarily for farmersand ranchers affected by a natural disaster in 2001 or 2002. The U.S. Department of Agriculture (USDA) carries out its widely variedresponsibilities through approximately 30 separate internal agencies and officesstaffed by some 100,000 employees. USDA is responsible for many activitiesoutside of the agriculture budget function. Hence, spending for USDA is notsynonymous with spending for farmers. USDA gross outlays for FY2002 (the most recently completed fiscal year) were $79.95 billion, including regular spending and supplemental spending forhomeland security following the September 11, 2001 terrorist attacks. The missionarea with the largest gross outlays ($37.5 billion or 50% of spending) was for foodand nutrition programs -- primarily the food stamp program (the costliest of allUSDA programs), various child nutrition programs, and the Women, Infants andChildren (WIC) program. The second largest mission area in terms of total spendingis for farm and foreign agricultural services, which totaled $22.9 billion, or 31% ofall USDA spending. Within this area are the programs funded through theCommodity Credit Corporation (e.g., the farm commodity price and income supportprograms and certain mandatory conservation and trade programs), crop insurance,farm loans, and foreign food aid programs. Figure 1 U.S. Department of Agriculture Actual Gross Outlays, FY2002 USDA spending in FY2002 also included $7.0 billion (9%) for an array ofnatural resource and environment programs, approximately three-fourths of whichwas for the activities of the Forest Service, and the balance for a number ofdiscretionary conservation programs for farm producers. (USDA's Forest Service isfunded through the Interior appropriations bill, and is the only USDA agency notfunded through the annual agriculture appropriations bill.) USDA programs for ruraldevelopment ($2.72 billion in gross outlays for FY2002); research and education($2.2 billion); marketing and regulatory activities ($1.5 billion); meat and poultryinspection ($717 million); and departmental administrative offices and otheractivities ($454 million) account for the balance of USDA spending. Approximately three-fourths of total spending within the U.S. Department ofAgriculture is classified as mandatory, which by definition occurs outside the controlof annual appropriations. Currently accounting for the vast majority of USDAmandatory spending are: the farm commodity price and income support programs(including ongoing programs authorized by the 2002 farm bill and emergencyprograms authorized by various appropriations acts); the food stamp program andchild nutrition programs; the federal crop insurance program; and various agriculturalconservation and trade programs. Although these programs have mandatory status, many of these accountsultimately receive funds in the annual agriculture appropriations act. For example,the food stamp and child nutrition programs are funded by an annual appropriationbased on projected spending needs. Supplemental appropriations generally are madeif and when these estimates fall short of required spending. An annual appropriationalso is made to reimburse the Commodity Credit Corporation for losses it incurs infinancing the commodity support programs and the various other programs itfinances. The other 25% of the USDA budget is for discretionary programs, which aredetermined by funding in annual appropriations acts. Among the major discretionaryprograms within USDA are Forest Service programs; certain conservation programs;most of its rural development programs and research and education programs;agricultural credit programs; the supplemental nutrition program for women, infants,and children (WIC); the Public Law (P.L.) 480 international food aid program; meatand poultry inspection, and food marketing and regulatory programs. Funding for allUSDA discretionary programs (except for the Forest Service) is provided by theannual agriculture appropriations act. Funding for Forest Service programs isincluded in the annual Interior appropriations act. Table 1. USDA and Related Agencies Appropriations, FY1995 to FY2003 (budget authority in billions of dollars) Note: Includes regular annual appropriations for all of USDA (except the Forest Service), the Foodand Drug Administration, and the Commodity Futures Trading Commission. Excludes all mandatoryemergency supplemental appropriations. Source: House Appropriations Committee. A key distinction between mandatory and discretionary spending involveshow these two categories of spending are treated in the budget process. Congressgenerally controls spending on mandatory programs by setting rules for eligibility,benefit formulas, and other parameters rather than approving specific dollar amountsfor these programs each year. Eligibility for mandatory programs is usually writteninto authorizing law, and any individual or entity that meets the eligibilityrequirements is entitled to the benefits authorized by the law. Spending fordiscretionary programs is controlled by annual appropriations acts. The thirteensubcommittees of the House and Senate Appropriations Committees originate billseach year which decide how much funding to devote to continuing current activitiesas well as any new discretionary programs. Administration's Request. As the first step in the FY2003 appropriations process, the BushAdministration released its budget request on February 4, 2002. Within the budget,the Administration requested FY2003 budget authority of $74.062 billion for the U.S.Department of Agriculture and related agencies (which includes all of USDA exceptthe Forest Service, and also includes the Food and Drug Administration and theCommodity Futures Trading Commission.) The $74.062 billion requested forFY2003 is $814 million above the FY2002 enacted appropriation of $73.187 billion. (The FY2002 enacted level includes two supplemental appropriations acts ( P.L.107-117 and P.L. 107-206 ), making nearly $500 million in net supplementalappropriations to various USDA programs, and FDA and CFTC ,in response to theSeptember 11, 2001 terrorist attacks.) The requested $17.421 billion for discretionary accounts was $1.145 billionabove the total FY2002 discretionary appropriation of $16.276 billion. Accountingfor $368 million of the requested increase in discretionary spending for USDA andrelated agencies is the Administration's assumption of a legislative proposal thatwould require all federal agencies to assume the full cost of accruing employeepensions and retiree health benefits beginning in FY2003, which ultimately was notadopted by appropriators. (1) Table 2. Congressional Action on FY2003 Appropriations for the U.S. Department of Agriculture and Related Agencies (1) The 107th Congress adjourned without passage of H.R. 5263 or S. 2801 by its respective chambers. The 108th Congress considered the FY2003 appropriations for USDAand related agencies in the context of an omnibus appropriations bill ( H.J.Res. 2 ) whichthe Senate amended and passed on January 23, 2003. House Action. The agriculture subcommittee of the House Appropriations Committee and the full HouseAppropriations Committee completed their respective markups of the FY2003agriculture bill for USDA and related agencies on June 26 and July 11, 2002,respectively. The bill ( H.R. 5263 ) and report ( H.Rept. 107-623 ) werefiled by the full committee on July 26, 2002. No floor action was held on the bill. Total appropriations in H.R. 5263 , as reported, were $74.306billion, of which $17.601 billion were for discretionary programs, and $56.705billion for mandatory USDA programs. The $17.601 billion for discretionaryprograms was exactly equal to the 302b allocation given to the subcommittee by thefull committee, and $180 million above the President's request for FY2003. Thediscretionary level in the House bill was $1.325 billion higher than the regularFY2002 appropriations, including supplementals. When the 108th Congress convened in early January 2003, the full Houseadopted a continuing resolution ( H.J.Res. 2 ), which also was intendedto serve as a vehicle for completing final funding decisions on the 11 remainingregular appropriations bills, including agriculture. Although the House-adoptedversion of H.J.Res. 2 was a temporary resolution extending fundingthrough January 31, 2003, the Senate-amended version was an omnibusappropriations measure that included the full-text of each of the outstanding regularbills, as amended. Until H.J.Res. 2 was enacted, FY2003 spending forUSDA and related agencies was governed temporarily by eight continuingresolutions enacted periodically over the first five months of FY2003, Senate Action. The SenateAppropriations Committee completed subcommittee and full committee markupduring the week of July 22, 2002, and reported its version of the FY2003 agricultureappropriations bill ( S. 2801 , S.Rept 107-223 ) on July 25. S. 2801 , as reported, provided total funding of $74.66 billion, which was$354 million above the House bill, $598 million above the Administration request,and $1 billion above the FY2002 enacted level including supplementals. Of the totalamount provided in S. 2801 , $17.98 billion was for discretionaryprograms, compared with $17.6 billion in the House bill, $17.4 billion in theAdministration's request and $16.55 billion provided in FY2002. The 107th Congress adjourned without completing action on S. 2801 or any other FY2003 agriculture spending bill.