What Tax Cuts May Mean to the Farm Bill

Debate already underway on the 2018 Farm Bill will be complicated by uncertainty over what the new tax law may mean for the federal budget.

Some analysts expect economic expansion, but the Joint Tax Commission has forecast that the bill could add as much as $1.5 trillion to the national debt over the next 10 years.

The bill will trigger PAYGO, which is a rule that prohibits new spending if it adds to the federal deficit. Sen. John Hoeven (R, N.D.) has said the Senate and House have agreed to waive PAYGO rules for agriculture if the economy doesn’t grow as much as expected, but skeptics are not convinced.

By one estimate, the House and Senate ag committees would need $15 billion a year to honor requests to double ag research spending, restore cuts in conservation programs, expand cotton and dairy supports, realign the county yields used in determining Agriculture Risk Coverage (ARC) subsidies, institute higher reference prices for Price Loss Coverage (PLC) payments, and reallocate base acres.

“Farm bills are all about finding the money,” said economist Joe Glauber.

House Agriculture Committee Chairman Michael Conaway says the House could debate the 2018 Farm Bill, which expires in September, as early as this month or next. He said that farm-state lawmakers “are going to have some hard decisions to make” in coming weeks.

Senate Agriculture Committee Chair Pat Roberts said lawmakers are ahead of schedule compared to previous bills. Ag lobbyists say the Farm Bill timeline already has slipped as issues such as health care and tax reform have become priorities.

Sources: Williston (N.D.) Herald, Successful Farming, Southwest Farm Press