USDA faces billions in cuts

Politico

2 days ago

Presented by Bayer
With help from Jordan Wolman
QUICK FIX
— The Trump administration is looking to cut nearly $7 billion from agriculture funding for fiscal 2026.
— The Senate is back in Washington and gearing up for a fight over reconciliation cuts to SNAP spending.
— The Energy Department has expanded the range of companies that can claim federal clean fuel production tax credits, a win for biofuels proponents and producers.
IT'S MONDAY, JUNE 2. Welcome to Morning Agriculture. I'm your host Grace Yarrow, missing my local Joanns. Send tips and your preferred craft suppliers to [e-mail]. And don't forget to follow us at @Morning_Ag.
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ICYMI: The Conversation kicked off with Dr. Oz
In the premiere episode of The Conversation, Dasha Burns sat down with Dr. Mehmet Oz — now leading the Centers for Medicare and Medicaid Services — for a candid talk on drug prices, potential Medicaid cuts and why he's getting early morning calls from President Donald Trump. Plus, POLITICO's Jonathan Martin dished on the Ohio governor's race (featuring Elon Musk, Vivek Ramaswamy and former Ohio State football coach Jim Tressel), and Kyle Cheney unpacked Trump's legal battle over 'Liberation Day' tariffs.
Watch the full episode on YouTube. And don't miss a moment — subscribe now on Apple Podcasts or Spotify to get new episodes when they drop.
Driving the day
FACING DOWN USDA CUTS: The Trump administration is requesting $23 billion for USDA for fiscal 2026, a cut of nearly $7 billion from the current year, according to budget documents released late Friday.
The proposal follows President Donald Trump's release earlier this month of his 'skinny budget,' which outlined proposals for billions of dollars in cuts to food, forest and conservation programs and increased funding for the 'Make America Healthy Again' initiative.
This more detailed release signals the spending priorities of the White House, which may not be fully embraced by Congress.
The details: If Agriculture Secretary Brooke Rollins and the Trump administration get their way, USDA would deeply reduce nearly all of the department's major initiatives, from the Risk Management Agency to Rural Development to the Forest Service to the Office of Civil Rights.
The budget request seeks to eliminate programs like the Source Water Protection Program, Dairy Business Innovation initiatives, direct loans for rural single-family housing, conservation technical assistance and the Rural Business-Cooperative Service.
The request aims to reduce the Farm Service Agency, which supports farm loans, conservation and disaster assistance, by $372 million. It would shrink the Natural Resources Conservation Service from $916 million to $112 million. The Forest Service would decrease from $16.8 billion last year to $4 billion, as Rollins looks to transfer wildland fire management appropriations to Interior to create a new U.S. Wildland Fire Service. USDA's research arm would also take a budget hit.
And more: The sweeping cuts would extend to other key areas. The budget request calls for cutting its SNAP funding allocation by more than half, along with child nutrition programs, as GOP lawmakers are looking to slash SNAP spending by up to $300 billion.
And the Special Supplemental Nutrition Program for Women, Infants and Children would receive nearly $300 million less than it did last year.
Read more on the budget plans from our Jordan Wolman here.
Happening next: The House Appropriations Ag subcommittee will meet on Thursday morning to mark up its Ag-FDA funding bill. The full House Appropriations committee will then consider the bill the following week.
On The Hill
SENATE'S SNAP FIGHT LOOMS: Congress is back this week, and the Senate is gearing up for a tough fight on agriculture and nutrition policy.
Senate Republicans are already looking at a 'do-over' of the bill, or taking out some provisions of the reconciliation package House Republicans passed before last week's recess, to ensure it can pass the chamber's parliamentary guidelines.
Some conflicts: Controversial comments that Sen. Joni Ernst (R-Iowa) made in defense of the GOP bill during a town hall on Friday continued to reverberate on Sunday talk shows.
One audience member, during a discussion of Medicaid and SNAP spending cuts, shouted at the senator: 'People are going to die.'
'Well, we all are going to die,' Ernst responded. (She's since posted a sarcastic apology video.)
Sunday best: OMB Director Russ Vought defended Ernst's comments and Republicans' megabill during an interview on CNN's 'State of the Union' Sunday.
He called worries like those from Ernst's constituents 'totally ridiculous,' arguing that it's 'very important to institute' work requirements for programs like Medicaid and SNAP.
Meanwhile, Sen. Raphael Warnock (D-Ga.), a member of the Senate AG Committee, bashed the plans on NBC's 'Meet The Press.'
'This is an unfunded mandate at a time when Donald Trump's tariff tax is literally raising the cost of groceries,' Warnock said Sunday.
MAHA CONFLICT: Agriculture lobbying groups and ag policy leaders on Capitol Hill are continuing to fight a Make America Healthy Again assessment as the White House's MAHA Commission gears up to release a full policy recommendation this summer, especially in light of errors found in the report's citations.
One GOP Hill aide, granted anonymity to discuss the fallout from the report, called HHS Secretary Robert F. Kennedy Jr. a 'Democrat who profited handsomely off junk science.'
'While his report and his rhetoric are not new, it is astonishing the president and some aides continue to support him,' the aide added.
ICYMI: Calley Means, a key architect of the Trump administration's MAHA goals, pushed back on ag groups' complaints that they weren't listened to in the drafting of the MAHA Commission's initial assessment. He also insisted that the commission's policy work will not impact farmers.
'There is ZERO plan - and in fact it would be insane - to do anything rash to hurt the American farmer,' Means wrote on X in response to MA's Monday edition last week.
AROUND THE AGENCIES
BIOFUELS NEWS: The Energy Department on Friday expanded the range of companies and producers that can claim the clean fuel production tax credit under Democrats' climate law. It's a win for biofuels proponents in the agriculture world on a tax incentive that was the subject of intense debate during the Biden administration, our Kelsey Tamborrino writes for Pros.
The Trump administration announced it was updating the modeling tool used to determine eligibility to claim the credit, which it said would account for new feedstocks and methods of production like ethanol from corn wet-milling and natural gas from coal mine methane.
Guidance surrounding how to claim the clean fuels tax credit, created under the Inflation Reduction Act, was intensely debated as former President Joe Biden's administration grappled with pressures from environmental and ag advocates.
The Biden administration ultimately proposed guidance for the credit in its final weeks, but left key decisions for the next administration.
The reconciliation bill passed by House Republicans would dismantle key elements of the climate law's tax incentives, but would update and extend the clean fuel production tax credit that is set to expire at the end of 2027.
Row Crops
— USDA is sending more than 150 firefighters and support personnel to help with the response to fast-moving wildfires across Canada, the department announced Friday.
— The Senate Agriculture Committee will hold a hearing Tuesday on the nomination of Michael Boren to be Agriculture undersecretary for natural resources and environment. Boren is facing new scrutiny from the Forest Service, this time for diversion of a geothermal stream to a home on his Idaho ranch, as Marc Heller writes for POLITICO's E&E News.
— ICYMI: A group of retired generals and admirals, known as Mission: Readiness, sent a letter to Congress opposing cuts to SNAP, arguing that the proposed House budget would hurt the nation's military readiness.
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