May 13, 2008
CBO has issued a cost estimate for H.R. 2419, the Food, Conservation, and Energy Act of 2008. Under the legislation, most of the policies would extend only through 2012; following baseline construction rules for mandatory programs, however, we assume that expiring programs are continued indefinitely. (Note to those who favor including all expiring tax provisions "in the baseline": this example demonstrates how the baseline is intended to work in conjunction with the budget scoring process. Programs that are assumed to continue in the baseline, despite their official expiration, are also treated that way in the budget scoring process.)
Relative to CBOs March 2008 baseline projections, we estimate that enacting H.R. 2419 would increase direct spending by about $3.6 billion over the 2008-2018 period, assuming that the legislation would remain in effect throughout that period. JCT and CBO estimate that revenues would increase under the legislation by $0.7 billion over the same period. On balance, those changes would produce net costs (increases in deficits or reductions in surpluses) of about $2.9 billion over the 11-year period, relative to CBOs most recent baseline projections. Over the 2008-2012 period when the act would be in effect, spending on the programs it covers would total about $307 billion. Of that sum, $209 billion is for nutrition programs, $35 billion is for agricultural commodity programs, and $25 billion is for conservation programs.
Relative to CBO's March 2007 baseline assumptions, enactment of H.R. 2419 would increase direct spending by $0.5 billion over the 2008-2017 period. (Fiscal year 2017 is currently the last year used for budget enforcement in the Senate under S. Con. Res. 21, the Concurrent Resolution on the Budget for Fiscal Year 2008.) JCT and CBO estimate that revenues would increase under the legislation by $0.7 billion over the same period. On balance, those changes would produce net savings (reductions in deficits or increases in surpluses) of about $0.1 billion over the 10-year period, relative to CBOs March 2007 baseline projections
In addition, enactment of H.R. 2419 would affect spending subject to appropriation action. However, CBO has not completed an estimate of the potential discretionary costs of the act.
Finally, let me publicly thank the CBO staff who have been working on the farm bill. They have been doing yeoman's work under extremely demanding conditions.