Last week, both the House and Senate were back in session after more than a month of Congressional recess. As of posting, Congress has one week – just 4 session days – until the end of Fiscal Year (FY) 2023 on September 30.
Beginning with the start of FY2024 on October 1, funding for the federal government will – absent a continuing resolution (CR) – expire, as will the Agriculture Improvement Act of 2018, better known as the 2018 Farm Bill. Amidst this focus on appropriations, both the House and Senate Agriculture Committees are continuing to draft the farm bill, but the looming government shutdown is slowing progress.
This post looks at where things stand across all of these moving pieces as Congress enters a crucial week of fiscal negotiations that will undoubtedly impact federal food and farm policy.
As a refresher, both the House and Senate Appropriations Committees have approved their respective versions of FY2024 Agriculture Appropriations legislation. And, the two proposals could not be more different.
In late July, the House of Representatives tried to bring its FY2024 Agriculture Appropriations bill to the House floor despite an exceedingly narrow path to passage – House Freedom Caucus members wanted to see even deeper cuts, yet including deeper cuts risked losing the support of moderate GOP members. Ultimately, Speaker Kevin McCarthy (R-CA-20) was unable to bring the FY2024 Agriculture spending bill to the House floor.
Fast forward to September, Speaker McCarthy abandoned plans to bring it to the floor this month. Meanwhile, the Senate has spent the past week considering its own FY2024 “minibus” – another name for a small package of different appropriations bills. In this case, the minibus includes Military Construction and Veterans Affairs; Transportation, Housing and Urban Development; and Agriculture, Rural Development, Food and Drug Administration.
While the Senate began consideration of the minibus on September 18 with hopes of painless bipartisan approval, progress was halted when Senator Ron Johnson (R-WI), among others, objected to the Senate’s consideration of the minibus as they attempted to secure floor votes on specific amendments. This delay has not only prevented passage of the bill, but also consideration of amendments – including an essential amendment that would restore funding for the Office of Urban Agriculture and Innovative Production. Ultimately, the Senate was unable to reach an agreement this week on how to move the minibus forward, meaning that any next steps for FY2024 Agriculture appropriations are likely on hold until at least October.
Now, if you’re wondering whether this flurry of activity will help stave off a government shutdown beyond September 30, the answer is, unfortunately, no. The recent FY2024 appropriations activity merely serves to set the stage for fiscal negotiations later this fall.
The top issue facing Congress in the final week of September is whether or not it can reach an agreement to fund the government beyond September 30. While these negotiations are developing by the minute, it currently seems likely that the federal government will shutdown for an undetermined period of time beginning October 1. So what, exactly, would a government shutdown mean for agriculture?
Each agency and department throughout the federal government, including USDA, is required to develop a government shutdown contingency plan, which you can find here. As of posting, the USDA’s updated contingency plan for October 2023 has not yet been finalized. However, we expect that once posted, the USDA’s updated contingency plan will be relatively similar to the plan used during the 2018-2019 government shutdown.
While USDA will need to keep a number of employees working to handle critical functions, non-essential programs will be forced to a halt. In the past, essential activities have included but are not limited to: food safety inspections, wildfire suppression, nutrition assistance programs, and monitoring imports for pests and diseases. The number of employees that will be furloughed will depend on how long the shutdown lasts.
In particular, we anticipate that a shutdown would adversely impact farmers and ranchers who rely on county-level USDA offices of the Farm Service Agency and the Natural Resources Conservation Service. These local offices would close, and while the impact from the closures may not be felt immediately, the longer the shutdown runs the more acutely farmers and stakeholders will feel the impact.
A shutdown would also impact the timing of the 2023 Farm Bill Reauthorization. The House and Senate Agriculture Committees rely on both the USDA and the Congressional Budget Office (CBO) for the key roles they play in offering technical assistance and estimating the budget implications of various proposals. Because a shutdown would hamstring both USDA and CBO, it would also further elongate the 2023 Farm Bill reauthorization timeline. Senate Agriculture Committee Chair Debbie Stabenow (D-MI) recently said to expect Senate action on the farm bill in December.
2023 Farm Bill
Amidst all the fiscal negotiations outlined above, Congress is still trudging forward on the 2023 Farm Bill reauthorization. However, Congress will not pass a new farm bill prior to the expiration of the 2018 Farm Bill on September 30, and does not at this time intend to extend the 2018 bill beyond its expiration. The impacts of an expired farm bill vary across programs. Many USDA programs will continue – in one fashion or another – when the farm bill expires. For example, the crop insurance program will continue unaffected, as will the Supplemental Nutrition Assistance Program.
In the past, many priority programs for NSAC would have been impacted negatively without a farm bill extension. Thankfully, due to hard fought wins in the 2018 Farm Bill, most of these programs now meet a key budget requirement that provides them funding even without an extension. Absent an extension of the 2018 farm bill, we expect that programs that receive mandatory permanent funding – for example, the Local Agriculture Market Program – will be able to continue in nearly all functions, with the exception of being able to sign new contracts or agreements beginning October 1, until there is an extension or a new farm bill. Taken altogether, Congress seems to feel relatively little pressure to pass an extension until the end of 2023, since most programs will continue more or less on autopilot – absent a government shutdown – over the next few months.