The Senate Agriculture Committee is scaling back the state cost-share requirement for the Supplemental Nutrition Assistance Program in the House budget reconciliation bill but retaining key boosts to farm bill programs, including increases to reference prices and a voluntary base update.
Committee Chair John Boozman, R-Ark., outlined the details of the agriculture portion of the Senate's budget reconciliation bill to the rest of the GOP conference Wednesday afternoon. The bill text came out later Wednesday evening.
Senate Ag's changes would yield a net spending reduction of $144 billion over 10 years, according to the panel. The Congressional Budget Office estimated the agriculture provisions in the House version of the One Big Beautiful Bill Act would cut spending by $238 billion through 2034. The Senate bill would provide an extra $67 billion for farm bill programs, using savings from SNAP.
Both the House and Senate bills would raise Price Loss Coverage reference prices by 10% to 20%, and the Agriculture Risk Coverage guarantee would be raised to 90%
Under both bills, the new PLC reference prices would be $6.35 a bushel for wheat, $4.10 a bushel for corn, $4.40 a bushel for sorghum, $5.45 per bushel for barley, $2.65 a bushel for oats, $16.90 a hundredweight for rice, $10 a bushel for soybeans and 42 cents a pound for seed cotton.
Both bills also would allow producers to enroll as many as 30 million new base acres that would be eligible for PLC or ARC coverage. The payment limit for commodity programs would also be raised from $125,000, where it has been set since the 2014 farm bill, to $155,000 and index the new cap for inflation.
For dairy producers, the Dairy Margin Coverage program coverage limits would be raised from the first 5 million pounds of milk to the first 6 million pounds of milk.
Both measures also would roll Inflation Reduction Act conservation funding into the farm bill baseline, resulting in a permanent increase in spending levels for four major programs. The $12 billion in additional funding would increase the future baseline for those programs by 32%, according to committee staff.
There are a few differences with the House bill, committee aides noted. For one, the Senate version doesn't include a cost-saving floor under the PLC reference price for corn. Not including that floor would cost an estimated $4 billion over 10 years.
The Senate bill, unlike the House bill, would also boost the escalator provision for PLC reference prices. The reference price for any given year can now rise up to 85% of the previous five-year average of market prices. The Senate bill would raise that limit to 88%.
Under the Senate bill, farmers who buy the supplemental coverage option on their insurance policies also would be allowed to enroll in ARC.
Both bills include new funding for trade promotion assistance at USDA, but to comply with Senate budget rules the Senate version would create a new program, to be called the Supplemental Agricultural Trade Promotion Program, to augment the existing Market Access Program and Foreign Market Development Program. The Senate bill's new program would receive $285 million a year.
The House Ag Committee achieved most of its savings through a controversial proposal to shift some costs of SNAP benefits to the states for the first time. Currently, the federal government pays for all SNAP benefits, but splits administrative costs 50-50 with states.
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Under the House reconciliation bill, states would have to cover 75% of the administrative costs in addition to some of the cost of benefits. The cost-share would be determined by the state’s SNAP error rate. All states would be responsible for 5% as a baseline, but that could go up to 25% depending on error rates.
The Senate proposal would remove the baseline 5% for states, and cap the potential cost-share at 15%. States with an error rate between 6% to 8% would be responsible for 5% of the costs. This would increase to 10% for states with error rates between 8% and 10%, while those with error rates above 10% would be responsible for 15% of the costs.
Boozman told reporters that many states already have error rates below 6%, and would therefore not be responsible for those additional costs. The policy would not kick in until 2028, which he said gives states time to address error rates and increase efficiency.
The Senate proposal would maintain the increase in administrative costs included in the House version. In some states, counties are actually responsible for some, if not all of the administrative costs. Given some of the limitations on how counties can adjust their budgets and revenue, some county leaders have raised concerns about how this change would impact SNAP services.
Similar to the House version, the Senate bill would also change the work requirement for able-bodied adults without dependents. The House bill would require parents of a child seven or older to meet the work requirements, but the Senate version would increase that threshold to 10 years old. Able bodied adults would also need to continue working through 64 to qualify for benefits.
After the House bill passed, several senators said they had issues with the state cost-share proposal, and would oppose similar efforts in the Senate. Boozman said he felt his proposal was well-received in the committee.
“It's the best of both worlds in the sense that it allows the states the efficiencies to make it such that they don't have to worry with that,” Boozman said of the cost-share proposal. “But we still recoup the money, so we've gotten around that.”
Boozman said he believed the cost-sharing provision alone would save about $53 billion.
Sen. John Hoeven, R-N.D., who also sits on the agriculture committee, explained their proposal would incentivize states to address their error rates without imposing a major cost, but would still generate federal savings. But he noted some senators, particularly those from states with high error rates, still had some concerns.
Overall, he thought it was well-recieved and that there was consensus in the conference. Hoeven said he thinks the Senate could finalize their proposal this week based on how the meeting went.
Similar to the House bill, the Senate proposal also limits SNAP benefits to U.S. citizens, lawful permanent residents, Cuban citizens or nationals. The Senate bill also requires all future updates to the Thrifty Food Plan be cost-neutral, with annual adjustments for inflation.
The House version also included enough savings to offset the cost of moving some farm bill programs into reconciliation.
Republicans set a July 4 deadline to complete reconciliation, and leaders are still aiming for that goal. Sen. Markwayne Mullin, R-Okla., said he believes the chamber could get all committee text out by the end of next week, with a vote teed up for the end of the month.
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