Budget Reconciliation Bill Advances

OMAHA (DTN) -- The House Budget Committee late Sunday passed a budget reconciliation measure that would increase farm program spending by $60 billion over 10 years but also cut the Supplemental Nutrition Assistance Program (SNAP) by $300 billion over the same time.

In a rare Sunday night meeting, four Republican members of the committee who had voted against the budget package on Friday changed their votes to "present." The committee vote was 17-16 with all Democrats in opposition and the four "present" votes. The bill should get a full floor vote before the end of the week. The Senate would then take its turn at passing the package.

Rep. Chip Roy, R-Texas, posted on X after the vote that the bill would advance the timeline for Medicaid work requirement "and reduces the availability of future subsidies under the green new scam."

Still, Roy stated, "But the bill does not yet meet the moment -- leaving almost half of the green new scam subsidies continuing." And Roy said the bill still leaves in a "perverse funding structure" for Medicaid.

Also joining Roy in voting "present" were GOP Reps. Josh Brecheen of Oklahoma, Andrew Clyde of Georgia and Ralph Norman of South Carolina. Rep. Lloyd Smucker, R-Pa., the committee's vice chairman, had voted "no" on Friday due to a procedural requirement that would allow the bill to again be brought up again. Smucker voted for the bill on Sunday night.

In referring to the "green new scam," as Roy described it, the bill strips away a long list of tax incentives for electric vehicles and renewable energy passed in 2022 in the Inflation Reduction Act. Still, the bill maintains and expands on the 45Z Clean Fuels Production Tax Credit that the biofuel industry considers critical going forward in creating lower carbon fuel. Under the bill, the 45Z would extend through Dec. 31, 2031, and would exclude foreign feedstocks from qualifying for the tax credit.

Dubbed the "One Big Beautiful Bill," the reconciliation package will now go to the House Rules Committee on Wednesday with the full House expected to take up the bill and vote on it Thursday before the House is scheduled to leave for a Memorial Day break. Roy and Norman also happen to sit on the House Rules Committee.

Republicans can only afford to lose two votes for the bill to pass.

In tax policy, the bill maintains lower tax rates passed in 2017 but also re-establishes 100% bonus depreciation for equipment purchases and increases the deduction for qualified business income from 20% to 23%.

The House Agriculture Committee last week advanced a smaller version of the farm bill as part of the package that improves the farmer safety net, but cuts nutrition spending as well. The House Ag provisions provide a net savings of $230 billion over 10 years. Some parts of the farm bill were not dealt with in the package such as Rural Development and forestry programs.

For farm programs, the bill increases reference prices for the Price Loss Coverage (PLC) program while also raising protection levels under the Agricultural Risk Coverage (ARC) program. Dairy Margin Coverage (DMC) also is expanded.

Payment limits for individuals and entities would increase from $125,000 to $155,000.

The bill creates a mechanism to add 30 million base acres, reflecting that large tracts of farmland have gone into production, but those acres have been excluded from commodity programs. Eligibility to enroll those acres will be limited based on planted acres and an allocation formula USDA will use to spread out enrollment.

See, "Six Tax Changes Made for Farm Businesses in the 'One Big Beautiful Bill'," https://www.dtnpf.com/…

Also see, "House Ag Committee Passes Farm Bill Reconciliation Package Along Party Lines," https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

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