Against long odds, House Republicans rallied to pass President Donald Trump’s big tax and spending package on a party-line vote, 215 to 214, last month. Now, Majority Leader John Thune, R-South Dakota, is pushing his chamber to complete work on its version by July 4.
How that huge piece of legislation will look when it comes out of the Senate, where the GOP holds a 53 to 47 majority, remains to be seen. Some senators, like Wisconsin Republican Ron Johnson, have pledged to block the bill from advancing unless it contains much bigger spending cuts to reduce the federal deficit. Sen. Rand Paul, R-Kentucky, has also complained about the lack of significant spending cuts and Sen. Josh Hawley, R-Missouri, is opposed to some of the changes in Medicaid.
The reconciliation process allows the bill to pass the Senate with a simple majority, bypassing the threat of a Democratic filibuster. But any Senate changes to the bill would send the modified version back to the House where it could face additional challenges.
For now, the House package includes major wins for farmers that had originally been considered for a new farm bill. That includes a $56.4 billion increase for farm bill programs like higher reference prices in the Price Loss Coverage program and increased premium subsidies for the supplemental coverage option in crop insurance. The bill also would bring Inflation Reduction Act conservation funding into the farm bill baseline while removing restrictions that limit the dollars to climate-smart practices.
Historic SNAP changes included
However, the farm bill spending comes with historic changes to the Supplemental Nutrition Assistance Program. Anti-hunger groups argue portions of the bill could remove millions from the program and ultimately increase hunger.
Some of the policies include setting stricter work requirements for able-bodied adults without dependents, saving taxpayers $92.5 billion over 10 years, according to the Congressional Budget Office. Under the bill, the age range for work requirements would extend from 54 to 64 and the definition of dependent child would change from under 18 to under 7.
One cost-saving measure would prevent future benefit increases through adjustments in the Thrifty Food Plan, which is based on food costs. In 2024 about 41 million people used SNAP, which offers about $6.16 per day in benefits.
Republicans also included a controversial proposal to shift more costs of the program benefits and administration to the states—a change that Democrats argue states can’t afford.
Currently, the federal government covers 100% of the program benefit costs, while splitting administrative costs 50-50 with states. Under the bill, states would be required to cover 75% of the administrative costs. Additionally, they would cover some of the benefit costs with the share determined by SNAP error rates.
Under the proposal, all states would start in 2028 at a 5% cost-share. States with error rates between 6% and 8% will have to contribute 15% of the cost. States with 8% to 10% error rates will have to pitch in 20%, and states with error rates 10% or higher will be responsible for 25% of the match.
Together, the SNAP changes would remove more than 3 million Americans from the program in an average month, reducing spending by more than $92 billion over 10 years, according to an analysis by the nonpartisan Congressional Budget Office.
Tax changes benefit farmers
The bill would increase the Section 199A deduction for business income from 20% to 23% and boost business expensing provisions. The Section 179 allowance would allow businesses to write off up to $2.5 million of the cost of equipment and software, with the limit phased down as spending exceeds $4 million. The bill also would increase the estate tax exemption to $15 million per person, $30 million for a married couple, and index it to inflation.
The 45Z credit for clean fuel producers would not only be preserved, but also extended in the bill. Biofuel producers and farm groups have argued that the credit needed to be longer to give the market and industry more certainty.
The bill already faces major hurdles in the Senate where some members of the agriculture committee appear weary of including the SNAP state cost-share proposal. The Senate’s bill must also adhere to the Byrd rule, which could restrict how it handles farm bill provisions.
Impact on future farm bills?
Former Secretary of Agriculture Dan Glickman, who served under President Bill Clinton, thinks this process of splitting the rural/urban coalition that passed prior farm bills is cause for concern. He was also a former Kansas congressman who served on the House ag committee.
“For over 50 years, we’ve had this coalition of urban and rural interests, farm and consumer interests working together to get farm bills passed. But this particular reconciliation bill—which is in effect, somewhat of a farm bill as it affects farm policy—no longer has that urban/rural coalition.
“I think it’s going to make it a lot harder to pass farm bills in the future,” he said on Agri-Pulse Newsmakers.
Former Secretary of Agriculture Mike Johanns, who served under President George W. Bush, and agrees that the urban/rural coalition appears to be broken and that the cuts to SNAP in the reconciliation package will be a “red line” for Democrats. Johanns was a former U.S. senator and governor in Nebraska.
“When I was in the Senate, it was getting harder and harder to get a farm bill done, just because there were so many stakeholders pulling at the farm bill,” Johanns said on the same show. “Some people wanted less spending; some people wanted more spending and the problem we were running into was keeping the coalition together.”
“As I look to the future, I must admit I’m a bit pessimistic that you (can) put that back together,” he added. However, he emphasized that “the pendulum does swing. What looks pretty bleak today can change tomorrow. But this was a pretty significant departure from how you traditionally got the farm bill done.”
Editor’s note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.com.
