A Test For The New Bipartisan Majority

Tired of "All Trump, All The Time"? This post is for you. (But it's not an easy read.)

Congress re-convenes, majority party paralyzed.

1. The House of Representatives will be in session for twelve days in June, before being in recess for two weeks.

2. The House of Representatives will be in session for twelve days in July, before being in recess for the entire month of August.

When Marjorie Greene (R-GA) brought a motion to remove Speaker Mike Johnson from his position last month, the transference of power to a bipartisan majority was finally formalized. The House overwhelmingly rejected Greene’s motion, with 163 Democrats joining 196 Republicans to provide support for the Speaker by a margin of 359 - 43.

Following the vote, Minority leader Hakeem Jeffries (D-NY) was explicit about the power shift that had just taken place :

“Our decision to stop Rep. Marjorie Taylor Greene from plunging the House of Representatives and the country into further chaos is rooted in our commitment to solving problems for everyday Americans in a bipartisan manner. We need more common sense and less chaos in Washington, D.C.”

Unfortunately, “common sense and less chaos in Washington, D.C.” still seems more aspirational than operational. While MAGA extremists have been exposed as a powerless and poorly organized minority faction within the House, they have nevertheless inflicted real damage on the norms and procedures of the institution. And their presence on powerful Congressional Committees portends a continuing effort to “burn the whole place down,” in former Speaker Kevin McCarthy’s memorable words.

The new bipartisan majority, a temporary alliance of traditional Republicans and centrist Democrats, may be able to cobble together enough votes to avert crises. But it is far from a unified governing force. No one is more aware of this than Speaker Johnson.

With the Republicans’ bare majority irretrievably fractured, and his impotence exposed, Mr. Johnson has turned his attention to formulating plans for next year. In an interview last month with Semafor’s Kadia Gorba, he revealed that he “is preparing Republicans for quick, large-scale action if they win unified control of government in November . . . a far-reaching bill aimed at addressing a wide range of issues at once.”

Hey, who can blame a guy for imagining how he’ll win at Wimbledon next year, rather than prepare for the match he’ll surely lose next week? The upcoming match on the Congressional calendar is a bill that’s far beyond the Speaker’s ability to even influence, let alone control. It’s HR 8467 — the FFNSA, which must pass by September 30.

What the heck is the FFNSA?

Garnering less media attention than Kristi Noem’s dog Cricket, but of immeasurably more importance, the FFNSA is the “Farm, Food and National Security Act of 2024” — usually referred to as:

The Farm Bill.

Wait! Don’t leave yet!

Tune into your favorite cable TV news network anytime, and chances are you’ll find yet another discussion of something related to Donald Trump. Whether it’s The Verdict, his other indictments and trials, his rally rants, or his social media ravings, nothing sucks up so much broadcast oxygen. Even coverage of the wars in Ukraine and Gaza are relegated to Page Two status — leaving little time for discussion of more mundane matters, like the allocation of $1.5 trillion of taxpayer money.

Given Americans’ limited attention spans, there are few political topics that inspire less interest among pundits and activists than the Farm Bill. This is partly due to its subject matter: Agriculture. But it’s also an enormously complex and tediously detailed piece of legislation. The bill’s summary alone, as provided by the House Agriculture Committee, is 42 pages long.

Our intent here is to provide some background context.

To whatever extent there is any media coverage of the Farm Bill debates over the next couple weeks, it will likely focus on unexpected alliances between progressives and far-right budget-cutting conservatives. As the Congressional Research Service notes:

“The omnibus nature of the farm bill can create broad coalitions of support among sometimes conflicting interests for policies that individually might have greater difficulty achieving majority support in the legislative process.”

It remains to be seen how these alliances will intersect with the larger bipartisan coalition that recently emerged in the House of Representatives. Congress could do as it did last year and just pass an extension of the current bill. But as becomes clear below, there are powerful interests on the Republican side who want a new bill now. And that presents an opportunity for House Democrats to insist that their priorities be protected.

---

So, exactly what is the Farm Bill?

“The farm bill is an omnibus, multiyear law that governs an array of agricultural and food programs. . . . (It) typically is renewed about every five years.”

“. . . Farm bills traditionally have focused on farm commodity program support for a handful of staple commodities—corn, soybeans, wheat, cotton, rice, peanuts, dairy, and sugar. Farm bills have become increasingly expansive in nature since 1973, when a nutrition title was first included. Other prominent additions since then include horticulture and bioenergy titles and expansion of conservation, research, and rural development titles.”

—Congressional Research Service, Feb. 29, 2024

The bill itself is divided into twelve sections, or Titles.

These are: Commodities, Conservation, Trade, Nutrition, Credit, Rural Development, Research/Extension, Forestry, Energy, Horticulture, Crop Insurance, and finally the catch-all Miscellaneous. The title names alone suggest that each is worthy of extended analysis and discussion. Obviously, that’s outside the scope of what’s possible here.

Since over 90% of the bill’s $1.5 trillion authorized spending goes to only three of these, we’ll concentrate on describing them:

1. Nutrition (Title IV)

2. Commodities (Title I)

3. Crop Insurance (Title XI)

   

---

1. Nutrition (Title IV)

“The U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP)—formerly, the Food Stamp Program—provides low-income participants with electronic benefits that are used like debit cards to purchase eligible food items in authorized retail food stores. Over the program’s long history, policymakers have implemented numerous changes in program design in response to the political, economic, and budgetary environment”

—U.S. Department of Agriculture, Economic Research Report Number 243

There is an argument to be made that Title IV should not be part of the Farm Bill at all. The mammoth SNAP program accounts for over 75% of expenditures authorized by the Farm Bill. However, it is qualitatively different from the next three largest in that it is a federal anti-poverty program, rather than an agriculture support program.

Because it assists about 14% of all Americans (approx, 42 million people), in every geographic area of the country, and is fairly easy to understand, Title IV generally draws the most attention whenever the Farm Bill is being renewed.

The average monthly benefit in FY 2019 (following the last renewal in 2018) was about $125 per person. Using his authority to periodically reevaluate the SNAP benefits formula, President Biden approved increases during the pandemic when the average reached a high of about $260 in November, 2022. The most recent available data (February 24, 2024) lists the average as about $189 per person.

—Source: USDA, SNAP Data Tables

Typically, when the Farm Bill is being considered, there are arguments over eligibility, adequacy of benefit amounts, restrictions on what foods can be purchased, and work requirements. While worthy subjects for debate, such disputes tend to distract attention from the other titles where substantial benefits flow in far greater amounts to far fewer recipients.

The proposed Republican House version of this year’s Farm Bill would limit the White House’s authority to raise SNAP benefits. According to the Congressional Budget Office, this change would cost recipients nearly $30 billion in enhanced food assistance over the next 10 years. This “saving” would then be used to pay for increases in Title I Commodities “reference prices”. (See next section: Commodities).

In other words, the 42 million low-income recipients of SNAP benefits would receive less so that farm subsidy recipients, most of whom have incomes above the national average, would receive more. (USDA data show that only about 23 percent of farms with yearly revenues of less than $100,000 receive federal subsidies, but 69 percent of farms above that income threshold do. At the very top end, 50 people on the Forbes 400 list of the wealthiest Americans received farm subsidies between 1995 and 2014.)

---

2. Commodities (Title I)

“Title I of the 2018 Farm Act authorizes USDA’s Farm Service Agency to administer a variety of producer support programs, many of which carry over from the 2014 Farm Act with minor adjustments.

The two largest Title I programs, Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC), pay producers who have eligible historical base acres when prices and/or yields of covered commodities fall below a certain amount, regardless of their current planting decisions. The Nonrecourse Marketing Assistance Loan Program (MAL) offers financing options to producers facing low prices.”

—USDA, Economic Resource Service, Feb. 28, 2024

• As stated above, there are three main commodity programs: PLC, ARC and MAL. Again, trying to keep things relatively simple, we’ll consider just the first of these, as it has the highest participation rate.

Price Loss Coverage (PLC)

PLC program payments are issued when the effective price of a covered commodity is less than what is called the Statutory Reference Price (SRP) for that commodity.

That is, the program pays farmers when commodity prices drop below a certain level. The higher the level is set, the higher the potential payment from the program, and the greater the likelihood that farmers will get it.

The SRP for each of 14 specific commodities is defined in Title I. For example, in the version of the Farm Bill proposed by the House Ag Committee, the SRP for Rice, Seed Cotton and Peanuts would be raised as follows:

Rice: from $14.00 to $16.90, an increase of nearly 21%

Seed Cotton: from $0.37 to $0.42, an increase of about 13.5%.

Peanuts: from $535 to $630, an increase of almost 18%.

According to the Environmental Working Group, the increase to reference prices for these three commodities means that farmers of those crops would get automatic payments every year because levels would be set so high that farmers would get payments no matter what:

“Reference prices determine whether farmers receive a payment from these commodity programs. Increasing reference prices to the levels proposed by the House farm bill would mean most farmers who participate in the programs, including most peanut, rice and cotton farmers, will get paid every year over the five-year lifetime of the farm bill.(See Figure 3.)”

—Environmental Working Group, May 21, 2024

While not every covered commodity will produce this kind of guaranteed payment, the examples above illustrate how great the potential benefits may be for some recipients. And not incidentally, they also illustrate how fierce the lobbying by producers of different crops inevitably becomes. All fourteen reference prices would see substantial increases.

Covered commodities include wheat, corn, sorghum, barley, oats, seed cotton, long- and medium-grain rice, certain pulses, soybeans/other oilseeds, and peanuts. The largest payments go to farmers of corn, wheat, cotton, rice, soybeans, and peanuts. And over 70% of payments made under PLC and its companion ARC go to producers of just three crops: wheat, corn and soybeans.

---

3. Crop Insurance (Title XI)

“Provides insurance products through the Federal Crop Insurance Program (FCIP) to indemnify producers against losses in yield, crop revenue, margin, whole farm revenue, and other types of losses. FCIP is administered by the Federal Crop Insurance Corporation (FCIC). Under FCIP, private-sector insurance companies sell and service the policies, while USDA’s Risk Management Agency (RMA) approves the premium rates, administers premium and expense subsidies, approves and supports products, manages FCIC, and reinsures the companies.”

—USDA, Economic Resource Service, Feb. 28, 2024

Aside from SNAP (Title IV), Federal Crop Insurance accounts for the greatest expenditure of Farm Bill funds — about 9% of the total. Established in 1980, Crop Insurance was intended to replace then-existing disaster relief programs. To encourage participation, subsidies of up to 30% of premium costs were offered. Still, when a major drought occurred in 1988, only 25% of eligible farmers were enrolled, and Congress had to enact targeted disaster assistance to provide relief.

That experience resulted in a robust effort to expand the program. Premium subsidies were greatly increased (up from 30% to 60%) over the next several years, and additional insurance products have been created (such as coverage on crop yields and gross revenues). Today, federal crop insurance has grown to be the largest farm subsidy program, covering more than 130 crops and about 85% of all eligible acreage,

However, it would be a mistake to characterize this as a success story.

The reality is that rather than being a safety net for farmers suffering losses because of bad weather, payments now are so large and frequent that Title XI has become a price support system itself. And like under the Title IV PLC program described above, the overwhelming majority of insurance premium subsidies go to producers of just three crops: wheat, corn and soybeans.

(One small example of how insurance has become price support is that, contrary to disaster assistance, crop insurance also covers crop prices —which always vary, not just crop yields —which decline dramatically in a disaster). Moreover, ad-hoc disaster payments generally required losses of 35% to qualify. Insurance policies cover losses over just 15%.)

But insurance is insurance, and payments are made regardless of what other subsidies the producer may receive. So it’s not uncommon for the same loss to generate payments from two (or even more) different Farm Bill programs.

Another by-product of the dramatic expansion of crop insurance is its effect on choices made by producers as to which crops will be planted and on which lands.

Because insurance is not designed to encourage any particular farming practices, it may pay for the same type of loss year after year. This can incentivize continuing to plant in ways and in places where, without insurance, the risks would be too great or the environmental costs too high.

“The growth of the crop insurance program has led to concerns that premium subsidies are distorting cropping decisions and encouraging production in marginal areas. Empirical work has focused primarily on the effects of the US crop insurance program on planted areas and the effects of insurance on input use. Early research by JunJie Wu suggested that farms that purchased insurance were more likely to produce soybeans and less likely to produce forage crops, which, in turn, Wu argued would lead to increased chemical use.”

—American Enterprise Institute, “Reforming the Farm Bill”, Oct. 2017

---

Not surprisingly, the rich get richer.

Contrary to the popular stereotype of a struggling family farm, the average income of all farm households in 2021 was $135,281, according to the USDA Economic Research Service. This was 32 percent higher than the average of all U.S. households. The median income of farm households was $92,239, which was 30 percent higher than the $70,784 median of all U.S. households. Only 2 percent of farm households have net wealth below the U.S. median household net wealth.

But while all farms are theoretically eligible, it is the largest and wealthiest who receive the most benefits. Sixty percent of Title I and Title XI subsidies go to the largest ten percent of farms. That translates to an average subsidy of $29/acre for the large farms, compared to $12/acre average for all farms.

It’s not just Progressive who are sounding the alarm.

The observation quoted above that “premium subsidies are distorting cropping decisions” is from the conservative American Enterprise Institute. And last year, the libertarian CATO Institute published a briefing paper titled Cutting Federal Farm Subsidies which made a similar point:

A review by the Organisation for Economic Co‐​operation and Development (OECD) found that “subsidized crop insurance generally has a negative impact on climate change adaptation” and that crop insurance “can have negative environmental impacts in the form of expanding crop production onto environmentally sensitive or high environmental‐​value land.”

Much of the foregoing data about disparities of subsidy payments between large wealthy producers and the average farm is also from that paper.

Near the top of this post, we quoted the Congressional Research Service’s observation that the Farm Bill “can create broad coalitions of support among sometimes conflicting interests.” While that is true, there can also be bipartisan agreement that the Farm Bill needs major revisions rather than just an update.

---

A Personal Note from the Writer

First, thank you for reading all the way to this point. Please let me know if you found it helpful, and/or if you’d like to know more about the subject.

Six weeks ago, I knew almost nothing about the Farm Bill other than that it pops up on the Congressional agenda every few years, and it’s always a big deal, at least to those with a stake in it. So when the latest Republican version of the bill was introduced, I decided to learn what I could and share it with our Feathers of Hope network.

I had no idea what I was getting into! My research led to a mind-numbing array of studies, histories, reports, charts and terms I’d never heard of. And I had purposely limited the scope to just 3 of the bill’s 12 Titles.

As I said near the top of this post, the Farm Bill is enormously complex and tediously detailed. It turns out “complex and detailed” is a simplified description. And that’s probably why it continues to expand and grow into what can only be described as boondoggle territory. It seems to me that the best anyone can hope for from this Congress is a few updates and revisions.

But let’s keep it in mind for a complete overhaul during President Biden’s second term, when Democrats once again control both Houses of Congress. — Jerry

---