OMAHA (DTN) — Vice President JD Vance on Tuesday broke a 50-50 tie in the Senate to pass President Donald Trump’s centerpiece legislation on tax cuts and spending, the “One Big Beautiful Bill.”
The bill also includes several farm bill provisions that will improve the farm program safety net.
In the big picture, the bill makes permanent some of President Trump’s 2017 tax cuts and extends others in the process. The bill also makes deep cuts to social programs such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The bill adds as much as $175 billion for border and immigration enforcement.
Congress is trying to get the bill to the president’s desk by July 4, though there are differences between the House version passed in May and the Senate bill.
The House passed its version of the bill in May on a 215-214-1 vote. Republicans hold a razor-thin margin in the House, but conservatives likely now will be asked to accept the Senate version of the bill. The House made steeper cuts to spending than the Senate.
GOP leaders in the Senate cut some late deals this week to secure votes, such as excluding certain states from having to pay a share of food assistance even though they have the highest error rates for payment in the country.
TAX PROVISIONS
The Senate bill makes permanent a 20% deduction for qualified business income for smaller businesses. The Senate language is different from the House, which increases the qualified business income deduction to 23%.
When it comes to buying equipment, the bill reinstates 100% bonus depreciation from 2025-2030 and also increases the Section 179 deduction for smaller businesses to $2.5 million.
The bill would increase the estate tax exemption to $15 million for single tax filers and $30 million for married couples starting in 2026 and the exemption would be indexed for inflation.
The Senate version also adds a provision that would allow income tax resulting from the sale of farmland to a qualified farmer to be paid in four annual installments instead of all at once. Such farmland must have been in agriculture production for the past 10 years to qualify and must remain in agriculture for 10 years after the sale occurs.
The Senate also extends the 45Z Clean Fuel Production Credit. Under the bill, only feedstocks from the U.S., Canada and Mexico would qualify for the tax credit. The Senate bill extends the 45Z through the end of 2029, compared to the House bill that extends the credit through 2031.
The Senate also expanded the Small Agri-Biodiesel Producer credit from 10 cents to 20 cents a gallon.
In another late move on the bill, senators removed some tax provisions that would have penalized wind and solar developers for using materials from China. To receive some other tax breaks, the Senate bill will require wind and solar projects to be placed in service by the end of 2027 to qualify.
The National Council of Farmer Cooperatives also noted the Senate provides permanent tax relief to cooperatives through the Section 199A provision.
The National Cattlemen’s Beef Association pointed to tax relief on estate taxes, Section 199A and the Section 179 deduction. NCBA also noted the Senate bill doesn’t include “controversial provisions” such as public land sales or eminent domain. NCBA called on the House to pass the bill and send it to the president.
For individuals, the bill also increases the standard income deduction as well as the child tax credit for couples and exempts taxes on tips for people through 2028.
AG PROVISIONS IN THE BILL
The bill includes improvements to the farm safety net with as much as $68.3 billion in program changes over 10 years.
That includes raising reference prices under the Price Loss Coverage program (PLC) and the Agriculture Risk Coverage (ARC) program. For the current crop year, the Senate bill has language that USDA will provide producers with the higher calculated payment rate in 2025 for ARC or PLC. Producers would then go back to choosing which program they prefer in 2026 and beyond. The Senate change will add more than $54 billion to PLC and ARC over 10 years.
Crop insurance programs would see about $6.3 billion in increased spending over 10 years, with higher subsidies for some supplemental area-based plans and other improvements to premium support.
Disaster relief programs at USDA for livestock are improved at a cost of about $2.9 billion over 10 years.
The Dairy Margin Coverage (DMC) is increased, and the bill also reduces crop-insurance premiums for farmers.
Another provision would boost economic assistance to textile mills as well.
Payment limits would increase from $125,000 to $155,000 for individuals, and then the payment limit would increase based on an inflation index. The bill also removes income caps for farmers or entities that draw 75% or more of their income from agriculture or forestry.
The bill also has provisions that would allow USDA to enroll up to 30 million new base acres for farmers based on the production history of that ground.
In conservation, the bill takes back as much as $16 billion from the Inflation Reduction Act (IRA) and rolls those funds into the 10-year budgets for USDA’s main conservation programs. Still, the CBO forecasts that move as a nearly $1.8 billion in cuts compared to what the IRA and farm bill funding could have provided for conservation programs.
Other provisions in agriculture would double funding for USDA trade promotion programs as well.
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DTN
