What Farmers Should Know About the 'Big, Beautiful Bill'

With no Farm Bill in sight, Republican lawmakers are hoping to use the budget reconciliation process to improve farm safety net programs. The U.S. House of Representative recently passed a budget package by a 215 to 214 vote. Now, the Senate will work to draft its version of a budget reconciliation package. Here’s what farmers should know:

What is reconciliation?

President Donald Trump is pushing hard for what he has dubbed a “big, beautiful bill.” It includes extending tax cuts enacted during his first administration, making additional tax cuts, increasing spending for immigration enforcement and upping the defense budget.

The Congressional Budget Act of 1974 allows Congress to quickly advance certain budget and tax legislation through a simple majority vote. Notably, a reconciliation vote is not subject to a filibuster in the Senate. Under normal budget proceedings, opponents can stall legislation unless 60 of the 100 senators vote to move on. By using reconciliation, Republicans are hoping to push through legislation on their terms since they have the majority in both chambers of Congress.

This reconciliation process starts when the House and Senate each approve a budget resolution. Those resolutions dictate the amount of revenue each committee needs to raise and the amount of spending each needs to cut.

The House Agriculture Committee was instructed to cut $230 billion from the programs it oversees.

On May 14, the committee passed a spending proposal on a party-line vote that included higher reference prices for commodities and more crop insurance premium support.

How did the House Ag Committee achieve its cuts and increase farm safety net spending?

While the Ag Committee was only required to cut $230 billion, members voted to cut nutrition spending by about $300 billion. Those cuts were achieved by imposing stricter working requirements on recipients and limiting future benefit increases. States will also be expected to cover a greater share of costs to offset the loss of federal funds. This was done in large part to make more money available for farm safety net programs.

The House Ag Committee’s budget increases statutory reference prices between 10% and 20% for all covered commodities. Premium subsidies for crop insurance increase between 6% and 9%, depending on coverage level. The Supplemental Coverage Option, or SCO, premium subsidy jumps from 65% to 80%.

The bill also includes language that could lead to year-round E15 sales.

Committee Chair Glenn “GT” Thompson, R-PA, says the bill ensures the Supplemental Nutrition Assistance Program, or SNAP, works the way Congress intended. He contends the committee’s budget offers “commonsense solutions” that will help build a stronger, more resilient rural America.

“We preserve the [SNAP] program’s ability to serve the most vulnerable long into the future,” Thompson said shortly after the committee vote. “At the same time, we’re strengthening the farm safety net and delivering critical support to the farmers, workers and communities that keep America fed.”

Does the reconciliation bill replace the Farm Bill?

The reconciliation bill does not replace the Farm Bill. Lawmakers can only use reconciliation to change mandatory or entitlement spending levels. These are programs that are permanently funded per congressional legislation.

Discretionary spending, or programs not permanently enshrined into law, can’t be changed. Non-budgetary legislation cannot be enacted or changed through reconciliation either.

Based on the current political climate, it seems unlikely that Republicans can pass a Farm Bill without at least some Democratic support. There is little indication the parties are ready to compromise in light of the massive nutrition funding cuts Democrats have adamantly opposed.

Ranking Member Angie Craig, D-MN, blasted her Republican colleagues for following through with the nutrition cuts. She said it will force states to slash food assistance while funding tax breaks for wealthy individuals and large corporations.

“This bill shatters the farm bill coalition, making the path to passing a full, five-year farm bill much harder because there will be no full farm bill to pass. The Republicans tore off bits and pieces of it and left the rest at the wayside,” Craig said in a press release following the committee vote. “Republicans voted to take food from families struggling to afford groceries and give more handouts to those at the very top. That is a damn shame.”

What happens next?

The Senate will now follow a budgeting process similar to the House, with each committee making cuts as directed by the Senate’s budget resolution. Notably, the Senate Ag Committee is only required to cut $1 billion in spending, a far cry from the $230 billion required in the House budget. This means the budget passed by the Senate Ag Committee could be vastly different from the House version.

If and when the Senate passes its budget, the two chambers will hold a reconciliation conference to resolve differences between the two bills. Given the vast disparity in required spending cuts between the House and Senate, this could prove to be a messy process. Still, with Trump demanding Congress pass his priorities, lawmakers may be more motivated to craft a compromise. What they agree to remains the trillion-dollar question.

EDITOR’S TAKE:

Does anyone really fully understand Washington politics? One thing is clear, however, that Republicans will use the reconciliation process to push through the President’s agenda. It is also clear that farmers/ranchers will have a better safety net, but it is very unlikely a Farm Bill will be passed anytime soon. Why? Food and nutrition programs, primarily SNAP funding, have forever been a part of the Farm Bill. This provision has typically brought bi-partisan support for the legislation. The reconciliation bill, by putting work requirements and restrictions on SNAP recipients, has created a very real chasm between the two parties. At some point, they will likely overcome those differences, but don’t hold your breath until after the 2026 mid-term elections. That will be an inflection point for policy decisions and any potential bi-partisan efforts going forward. In the meantime, it is our belief that congress will pass the reconciliation bill and put it on the President’s desk sometime this summer.

This summer would be a perfect time for your parts and service departments to reach out to farmers/ranchers in your area. Generally speaking, they will be preparing for harvest season and you could make their life just a little easier by taking care of their current vehicles. Then invite them in later for a look at your inventory when they are ready to purchase that new truck. In addition, be sure to put the inventory on AgTruckTrader.com® to whet their appetite in the interim!