Farm Measures Would Limit Trump’s Bailout Money in a Trade War

President-elect Donald Trump faces limits on his ability to make farmers whole in a trade war under farm legislation Congress is considering.

A bipartisan cohort of lawmakers want to rein in a pot of money Trump’s first administration used to compensate farmers decimated by the then-president’s trade confrontation with China.

Senate Agriculture Committee Chair Debbie Stabenow (D-Mich.) on Monday offered a farm bill package that would require congressional approval of certain Agriculture Department discretionary spending supporting the farm economy. While Congress will be hard-pressed to reach a deal on the $1.5 trillion legislation informing nutrition and farm policy after Republicans panned Stabenow’s release, both parties have criticized payments from the agency’s Commodity Credit Corporation since lawmakers reinstated its discretionary spending authority in 2018.

“If Congress wants to have more say in trade policy, it gives Congress a larger role for sure,” said Jennifer Ifft, a professor at Kansas State University’s agricultural economics department, of the proposal.

The proposals championed by Stabenow and House Agriculture Chair GT Thompson (R-Pa.) would would require explicit congressional approval for uses of the Commodity Credit Corporation’s Section 5 authority, which funds programs including agricultural price supports.

Trump’s first administration used the authority to send $23 billion in payments to farmers hit with retaliatory export tariffs. He ran on setting tariffs even higher during his 2024 campaign, which could ignite a similar retaliatory response from other countries.

Democrats criticized how those payments were distributed. The Biden administration, for its part, angered Republicans by using the authority to fund climate-focused grants.

Budget Factors

Though House Republicans proposed the limit to account for other spending in their farm bill, the Congressional Budget Office found the estimated savings doesn’t cover the measure’s full cost.

Stabenow said Monday she supported efforts to override the estimates. While her farm bill text directed the office to score spending under the authority at $6.7 billion each fiscal year through 2033, the House package text doesn’t specify a scoring number.

Stabenow Releases Farm Bill Draft as GOP Prepares Extension

Thompson said in a brief Nov. 13 interview he didn’t plan to change the farm bill’s limit on Section 5 authority after Republicans swept control of the House, Senate, and White House.

He said uses of the authority similar to Trump’s first-term farm payments would be appropriate, but that specifics would ultimately determine congressional approval.

Republican Sen. Chuck Grassley (Iowa) also maintained the importance of curbing spending under the authority despite Trump’s use of the fund to bail out farmers.

“The rules on the Commodity Credit Corporation are too liberal,” Grassley, an Agriculture committee member, said on a call with reporters. “It gives the executive branch too much power to spend money.”

Grassley, whose bill (S. 2244) proposed the authority limit, said he wants Trump to consider how tariffs affect farmers because retaliatory tariffs “tend to single out agricultural products.”

Sen. Amy Klobuchar (D-Minn.) didn’t immediately respond to requests for comment on whether she supports the proposal. Klobuchar will be the most senior Democrat on the agriculture panel once Stabenow retires at the end of this year and is the favorite to become the committee’s ranking member.