Redistributed as a Service of the National Library for the Environment*
98-201: Appropriations for FY1999: U.S. Department of Agriculture and Related Agencies
Ralph M. Chite, Coordinator
|Total Budget Authority||$60.75||$70.84||$67.90||$63.09||$53.12||$49.55||$55.94|
Note: Includes funding for the Food and Drug Administration and Commodity Futures Trading Commission. Excludes USDA Forest Service. Emergency supplemental spending of $5.89 billion is not included in the FY1999 total.
Sources: Congressional Budget Office and House Appropriations Committee.
Although they have mandatory status, the food and nutrition programs are funded by an annual appropriation based on projected spending needs. Supplemental appropriations generally are made if and when these estimates fall short of required spending. An annual appropriation is also made to reimburse the Commodity Credit Corporation for losses it incurs in financing the commodity support programs and the various other programs it finances. Historically, the farm commodity support programs were a larger portion of the USDA budget than they are currently. Spending levels among these programs were erratic and unpredictable, making total USDA spending highly variable. Some of this unpredictability was lessened by the enactment of the 1996 farm bill, which fixes the level of spending on direct payments to program crop producers, and no longer ties these payments to market conditions.
The other 25% of the USDA budget is for discretionary programs, which are determined by funding in annual appropriations acts. Among the major discretionary programs within USDA that are funded by the annual agriculture appropriations act are its rural development programs, research and education programs, agricultural credit, the supplemental nutrition program for women, infants, and children (WIC), the Public Law (P.L.) 480 international food aid program, meat and poultry inspection, and food marketing and regulatory programs. FY1998 funding levels for all USDA discretionary programs (except for the Forest Service) were provided by the FY1998 Agriculture, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act (P.L. 105-86), and by the FY1998 Supplemental Appropriations Act (P.L. 105-174). For more information on FY1998 funding, see CRS Reports 97-201 and 98-478.
Status of FY1999 Agriculture Appropriations
2. Congressional Action
on FY1999 Appropriations
for the U.S. Department of Agriculture and Related Agencies
|Subcommittee Markup Completed||House Report||House Passage||Senate Report||Senate Passage||Conference Report||Conference Report Approval *||Public Law*|
|Vote of 373-48
|Vote of 97-2
*The conference report on H.R. 4101 was vetoed by the President on October 7, 1998. FY1999 appropriations for USDA and related agencies were ultimately included in the Omnibus Consolidated and Emergency Appropriations Act, 1999 (P.L. 105-277, H.R. 4328), which was approved by the House on 10/20/98 by a 333-95 vote, by the Senate on 10/21/98 by a vote of 65-29, and signed into law on October 21, 1998.
FY1999 Agriculture Appropriations Action
The conference agreement on the FY1999 omnibus appropriations bill (P.L. 105-277/H.R. 4328) was signed into law on October 21, 1998. The measure contains $55.9 billion in regular FY1999 appropriations for USDA and related agencies and $5.9 billion in emergency funding to help farmers recover from natural disasters and low crop prices.
The House and Senate earlier had approved a separate conference agreement for FY1999 USDA appropriations (H.R. 4101) on October 2 and October 6, 1998, respectively. However, the President vetoed the measure on October 7, because the emergency spending provisions in the bill did not include a Senate Democratic leadership-supported increase in loan rates (price guarantees) for farmers. The vetoed measure included $55.9 billion in new budget authority, and $4.2 billion in emergency assistance.
Republican leadership opposed any increase in loan rates, but instead agreed to an increase in the amount of emergency farm assistance provided from $4.2 billion in the vetoed bill (H.R. 4101) to $5.9 billion in P.L. 105-277. A budget emergency was declared for this amount, which by definition requires no budgetary offsets for the new spending. (See "Emergency Supplemental Farm Assistance" below for details.
The $55.9 billion in regular (non-emergency) FY1999 appropriations for USDA and related agencies in P.L. 105-277 is about equal to the House-passed level of H.R. 4101, $1.3 billion below the Senate-passed level (S. 2159), and nearly $3 billion below the Administration request. Of this amount, $42.25 billion is for mandatory programs and $13.69 billion for discretionary spending.
With only a few exceptions, the $55.9 billion provided to USDA and related agencies in P.L. 105-277 is nearly identical to amounts provided in the vetoed conference agreement on H.R. 4101. The major differences are that P.L. 105-277 provides $23.3 million more for the President's Food Safety Initiative spread out among FDA and several USDA agencies, and $15 million more for rural empowerment zones and enterprise communities programs within USDA's rural development programs.
Total non-emergency budget authority in P.L. 105-277 for USDA and related agencies is significantly higher than the $49.55 billion appropriated in FY1998, which is mainly attributable to a change in the formula for determining how much is required to reimburse the Commodity Credit Corporation for its net realized losses. (See "Farm Commodity Programs" below for details.) A significant portion of the $1.1 billion difference between the total amounts provided in H.R. 4101 and S. 2159 is in the amount provided for food stamps. The House based its projections on more recent economic forecasts that show lower average participation and benefits than previously were projected.
The following is a review of the major USDA and related agencies provisions of P.L. 105-277, the House- and Senate-passed bills (H.R. 4101 and S. 2159), and the Administration request for FY1999 funding. (See Table 3 at the end of this report for a program-by-program comparison of P.L. 105-277 with the House and Senate bills, the FY1999 request, and actual FY1998 appropriations.)
Emergency Supplemental Farm Disaster and Economic Assistance
Several regions of the country, have been experiencing low farm commodity prices (primarily for wheat, corn, soybeans, and cotton) and/or natural disasters this year (particularly in the Northern Plains and the South). This has had the effect of significantly reducing farm income. P.L. 105-277 provides $5.893 billion in supplemental assistance, primarily to mitigate the effects of low crop prices and natural disasters. Conferees included language which declares a budget emergency for this expenditure, which by definition means that no budgetary offsets will be required for this new spending.
The amount provided for farm assistance in P.L. 105-277 is similar to a proposal announced by House Republican leadership on September 17, except that it contains an additional $1.7 billion more than what was originally proposed. Included in the final total of $5.9 billion in emergency farm assistance provided by P.L. 105-277 are:
Disaster payments will be made to a producer regardless of whether the farmer had an active crop insurance policy. However, if a farmer waived crop insurance coverage in 1998, he would be required to obtain crop insurance in the next two crop years as a condition for receiving a disaster payment. Because the federal government pays the entire premium for the farmer for the basic level of crop insurance coverage, this mandatory requirement to obtain insurance is estimated to cost the government an additional $66 million, which is factored into the $5.9 billion supplemental appropriation. Conditions of eligibility for the disaster payments were left to the discretion of the Secretary of Agriculture.
Other emergency farm assistance provisions in P.L. 105-277 include: $50 million in disaster assistance to help western Alaska fishermen recover from poor salmon returns; $40 million in additional salaries and expenses for the Farm Service Agency (FSA), the USDA agency that administers farm commodity, disaster and loan programs; and $31 million in budget authority to support $540 million in additional direct and guaranteed FSA farm operating loans; and $3 million in dairy disaster assistance.
A provision not included in the conference agreement, but strongly supported by the Administration and Senate Democratic leadership during the debate, was a temporary increase in the loan rate (price guarantees) for certain farm commodities. One attempt to raise the loan rates for grains and cotton was defeated during Senate floor action on S. 2159. Another attempt was defeated when the Senate tabled a similar amendment to the Interior appropriations bill (S. 2237). The President vetoed the conference agreement on FY1999 agriculture appropriations because its emergency provisions did not include an increase in the loan rates. Senate Democrats supported an increase saying it was needed to adequately address farm financial problems. Republican leadership opposed a proposed one-year increase in loan rates because of its estimated cost ($5 billion) and because it believed that it would fundamentally undermine the policy changes made by the omnibus 1996 farm law.
For more details on the implementation of the emergency provisions, see CRS Report 98-952, The Emergency Agricultural Provisions in the FY1999 Omnibus Appropriations Act.
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