Growing cost of nutrition aid may spark new farm bill battle

Ballooning cost estimates for the Supplemental Nutrition Assistance Program are likely to paint a bigger target on the farm bill’s nutrition title when lawmakers start drafting the bill in the next Congress.

The Congressional Budget Office’s new estimates for farm bill spending project SNAP will cost about $531 billion from fiscal 2024 through FY28, the five-year period expected to be covered by a new farm bill.

By comparison, the entire nutrition title of the 2018 farm bill was projected to cost just $326 billion over five years at the time it was enacted, according to the Congressional Research Service, and that estimate for FY19 for FY23 includes the cost of some smaller nutrition programs in addition to SNAP.

The increased SNAP cost is due to the combination of the COVID pandemic, which pushed more people into the program, and increases in benefits. In 2021, the Biden administration announced an update to USDA’s basic estimate of eating costs, called the Thrifty Food Plan, which is used to calculate SNAP benefits.

In 2018, nutrition spending was expected to account for 76% of total farm bill spending, but that share will wind up significantly higher as a result of the increase in SNAP costs because the cost of other major sections of the bill has been largely flat.

The commodity title, which was estimated to cost $31 billion between FY19 and FY23, is projected to cost about $28.6 billion between FY24 and FY28, according to CBO.

Crop insurance was estimated to cost $38 billion in the 2018 farm bill; CBO expects crop insurance to cost $39.2 billion from FY24-28.

The Senate rejected House GOP efforts to cut SNAP spending in both the 2014 and 2018 farm bills, and Republicans controlled the Senate in 2018. The 2018 law was a double defeat for House Republicans, since the final law not only omitted the cuts they wanted but also authorized the Thrifty Food Plan update that increased basic SNAP benefits.

Average SNAP enrollment dropped from 40.7 million in fiscal 2018 to 35.7 million in FY19, only to jump to 41.2 million by the current fiscal year. The average monthly SNAP benefit has increased from $129.83 a month in FY19 to $238.25 in FY22. That increase in average benefits includes both the impact of the Thrifty Food Plan update as well as emergency allocations that Congress authorized during the COVID-19 pandemic. Those emergency allocations are still in effect for 35 states and the District of Columbia. The extra benefits will end when the presidential emergency declaration expires. 

Former House Ag Committee Chair Collin PetersonCollin Peterson, a former House Agriculture Committee chairman and Minnesota Democrat who now advises some Midwest farm organizations on agricultural policy, expects Republicans to try again to cut SNAP in the next farm bill. Republicans are widely expected to win control of the House in November. Democrats currently control the House 220-208. There are seven vacant seats, five of which are held by Republicans.

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The Foundation for Government Accountability is a conservative group that, along with the Heritage Foundation, has long pushed for tightening rules to cut the program’s cost. Heritage has called for cutting SNAP by $111 billion over 10 years by tightening work requirements.

The top Republican on the House Agriculture Committee, Glenn “GT” Thompson of Pennsylvania, is in line to chair the panel, if Republicans take control of the House, and has repeatedly raised concern about the cost of SNAP and the Thrifty Food Plan update.

“What frustrates me most at this moment is my Democrat colleagues have already drawn a line in the sand­ — this program will not be touched in the next reauthorization of the farm bill,” Thompson said at an April hearing on SNAP. “How can we be so certain everything in Title IV (the nutrition title) is perfect? Or untouchable?”

Signaling the possibility of another tussle over SNAP work requirements, Thompson said that waivers of the work rules were “clearly keeping employable individuals idle and disengaged.”

Anti-hunger advocates argue that the increased benefits still aren't as high as they need to be. "I don't think most people think $5.50 a day is an adequate budget for food, even if it's supplementary," said Ellen Vollinger, SNAP director for the Food Research and Action Center, referring to what the average benefit would be once the pandemic-related allocations end. 

There also are likely to be efforts to expand the program by ensuring college students can get benefits and making Puerto Rico fully eligible for the mainland program. Puerto Rico currently operates SNAP through a block grant; funding doesn't fluctuate by need. 

It’s far from clear a farm bill that cuts SNAP could even get to Biden’s desk. The legislation would need 60 votes to pass the Senate, and Republicans aren’t expected to have that many seats even under the most optimistic scenarios for the party. Of the 35 Senate seats up for election this year, just three to five races are rated as toss-ups by major analysts; the Senate is currently divided 50-50.

Meanwhile, CBO has reduced its estimate of the cost of commodity programs — which are designed to trigger when market prices fall — due to a surge in commodity prices that started in 2020.

CBO estimates farmers will receive just $480 million in Price Loss Coverage payments in FY23 and $422 million in FY24. That’s down from the $838 million and $2.3 billion CBO had previously estimated in 2021 for those years. PLC payments trigger when market prices fall below the program's reference prices. The Agriculture Risk Coverage county-level program, which triggers payments based on fluctuations from a moving five-year average, is expected to pay out a total of just $76 million for FY23 and FY24. 

CBO expects farmers to receive an average of $6 a bushel for their 2022 corn crop but just $4.45 in 2023 and $4.10 in 2024 before remaining relatively flat in ensuing years. Market prices are expected to decline sharply for other commodities as well. As a result, total PLC payments for all commodities are expected to rise to $5 billion by FY27 and FY28.

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