WASHINGTON, Feb. 18, 2015 – Congressional critics of crop insurance are citing the rising cost estimates for the 2014 farm bill’s commodity programs to justify slashing growers’ premium subsidies. Sen. Jeff Flake, R-Ariz., and Rep. John Duncan, R-Tenn., rolled out a proposal last week to eliminate premium subsidies for revenue policies that have the harvest price option (HPO).

Flake said that arguments that the farm bill would save money turned out to be “all hat and no cattle.” Drew White, a policy analyst with Heritage Action, a conservative group that advocates cuts to farm programs, said the latest Congressional Budget Office estimates on farm bill spending confirm critics’ concerns that the farm bill was going to cost significantly more than was forecast at the time it was drafted. (CBO’s cost estimates at that point were developed off of commodity prices that were at a higher level. As White notes, it was pretty well understood at the time that the programs were likely to cost more than the estimates were showing.)

“We want to emphasize to House and Senate staff that is there’s an opportunity with this bill to take a solid interim step as we move forward to curb the cost and protect the American taxpayer,” White said at a news conference with Flake and Duncan.

One mystery surfaced at the news conference: The CBO estimate of the 10-year cost savings from ending the HPO premium subsidies has doubled since last year to nearly $19 billion,

even though the drop in commodity prices means that it should cost less to insure crop revenue, said Vince Smith, an economist with the American Enterprise Institute. He had no explanation for why CBO had raised the estimate so significantly.

The chairmen of the House and Senate Agriculture committees, Rep. Mike Conaway, R-Texas; and Sen. Pat Roberts, R-Kan., have pledged to protect crop insurance from cuts.


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