Last week the House of Representatives unexpectedly failed to pass a new 5-year farm bill. Without legislation, policies covering everything from crop insurance and commodity subsidies to conservation programs and food stamps will revert to the 1949 farm bill -- the last permanent one written into law.
While the Senate passed its $955 billion bill earlier in June with 66 votes, the $940 billion House version was more contentious. Democrats objected to $20.5 billion in cuts to food stamp programs over the next 10 years, with the President threatening a veto, and Republicans objected partly to a $9 billion increase in crop insurance spending.
Both bills represent lost opportunities to fundamentally reform farm subsidy programs. One way to do that would be to follow the recent Simpson-Bowles proposal recommending elimination of direct and countercyclical payments along with crop insurance.
That would generate savings of at least $40 billion over 10 years while still implementing programs designed to protect farmers from dramatic risks. The Simpson-Bowles proposal also avoids cuts to the food stamp program and echoes a similar bipartisan proposal from the Domenici-Rivlin Debt Reduction Task Force.