The U.S. House of Representatives passed a nearly $1 trillion farm bill on Wednesday that cuts food stamps and ends a costly direct subsidy to farmers, while expanding government-backed crop insurance programs.
The Senate is expected to vote as early as next week on the sprawling legislation, which is more than a year overdue. The leaders of the House and Senate agriculture committees have said they expect President Barack Obama will sign the bill.
The vote was 251-166 and the measure had solid backing from the House GOP leadership, even though it makes smaller cuts to food stamps than they would have liked. The bill would cut about $800 million a year from the $80 billion-a-year program, or around 1 percent. The House had sought a 5 percent cut.
The legislation would continue to heavily subsidize major crops while eliminating some subsidies and shifting them toward more politically defensible insurance programs.
The plan, which the Congressional Budget Office estimates will cut spending by $16.6 billion over 10 years from current levels, reflects the clout of rural and urban allies who succeeded in keeping farm subsidies and nutrition programs together over Republican objections. Supporters said the bipartisan bill showed political differences can be bridged. Opponents said the bill was rushed to a vote to avoid criticism about its cost.
Here are the details according to Bloomberg News -The bill governs farm subsidies, which encourages planting of soybeans, cotton and other crops by lowering costs for commodity processors including Bunge Ltd. The legislation subsidizes crop-insurance provided by companies such as Ace Ltd. (ACE) and funds purchases at Kroger Co. (KR) and other grocers with food stamps, its biggest cost.
The legislation would cut food-stamp spending by $8.6 billion over 10 years, though additions to other programs bring nutrition-aid cuts down to $8 billion — one-fifth of the $40 billion sought by Republicans and fought by Democrats and food retailers.
Total savings would be $23 billion over 10 years, higher than the budget-office estimate, after automatic cuts in all federal spending tied to an earlier budget deal are included, according to agriculture committee staff.
Crop-growers facing loss of $50 billion in subsidies retained about two-thirds of it through other aid, according to the Congressional Budget Office. Conservation initiatives would lose $6 billion, largely through consolidation of existing programs. Crop insurers that paid out $17 billion after the severe 2012 were largely unscathed.
The bill ends the possibility, for at least five years, of U.S. farm policies reverting to a 1949 law that would potentially double milk prices.