House Ag Committee Approves Budget Measure; House Ways and Means Approves Section 199A Extension

House Ag Committee Approves Budget Measure Including Farm Bill Elements

After two days of intense discussion and debate, the House Agriculture Committee this week approved a spending package that reduces Supplemental Nutrition Assistance Program spending while also extending and updating key farm bill programs, including the Dairy Margin Coverage program.

The bill, which passed the committee Wednesday, cuts $290 billion from nutrition assistance spending over the next 10 years by gradually requiring states to cover program costs using a sliding scale based on their payment error rates. Some of the resulting savings are targeted at increasing spending on commodity programs, crop insurance and other farm bill programs such as trade, research, animal health programs.

In our statement Wednesday, we thanked the committee for extending the DMC program through 2031, providing dairy producers with much-needed continuity. The package also bases the program’s production history calculation on a farmer’s highest production year out of 2021, 2022, or 2023, an update to better reflect recent farm production levels. The bill also includes NMPF’s request to fund mandatory USDA dairy processing plant cost surveys every two years, which will better inform future make allowance conversations

The legislation ultimately will be folded into a broader budget reconciliation package that will include an extension of current tax policies while increasing funding for border security and national defense (see story below).

House Ways and Means Committee Approves Section 199A Extension
In tax policy, the House Ways and Means Committee also worked this week on its part of the overall budget reconciliation bill. The measure approved Wednesday by the panel extends many provisions of the 2017 Tax Cuts and Jobs Act, including the Section 199A deduction for pass-through business income, a goal sought by NMPF and other farm organizations.

In addition to making the 2017 tax cuts permanent, the Section 199A business income deduction would also increase from 20% to 23%, lowering the top tax rate for individuals with farm or small business income to 28.5% from the current 29.6%.

Now that House committees of jurisdiction have completed their work, the Budget Committee must vote to combine these various elements into one large package. The committee met this morning but does not yet have the votes to move forward due to conservative objections with portions of the bill. Republican leaders are expected to negotiate with members throughout the weekend, with the goal of reconvening the Budget Committee on Monday to advance the bill. If this happens, the full House may vote on the package before the end of next week.