Congressional Oversight vs. Administrative Discretion Gone Wild? The Case of the Commodity Credit Corporation
American Enterprise Institute
January 03, 2023
Key Points
- The Commodity Credit Corporation (CCC) is a federally owned entity that exists to fund mandatory farm bill programs, but under current statute, the secretary of agriculture has broad discretionary authority in spending excess CCC funds.
- In recent years, the secretary of agriculture has used or considered using CCC funds to reimburse farmers for losses related to the Trump-era trade wars, subsidize the installation of high-ethanol pumps at gas stations, and implement climate-smart conservation programs.
- The programs supported by CCC discretionary funds to both farms and nonfarm businesses often explicitly contradict congressional intent, and currently there are few limits on the potential scope of these policies.
Introduction
Congress’s primary tool for establishing agricultural policy is the omnibus farm bill. In recent years, however, major changes in farm policy have occurred outside the five-year farm bill process. Since 2017, one of the costliest and most consequential tools affecting the financial safety net for agricultural producers has been the secretary of agriculture’s exercise of discretionary spending authority under the Commodity Credit Corporation (CCC) Charter Act.
Increased reliance on CCC Charter Act authority undermines congressional primacy in setting agricultural policy. New or expanded programs funded under Charter Act authority also greatly increase the cost of the federal farm financial safety net while at times appearing to be guided primarily by political considerations. Vesting such power in the secretary of agriculture will likely increase farm safety-net spending and extend farm supports to new beneficiaries far from the farm gate. In addition, by undercutting the legislative farm bill process, Charter Act authority undermines bipartisan efforts to create a more cost-effective farm safety net focused on managing risk instead of maximizing government payments for the politically favored. Lawmakers should thoroughly evaluate the CCC Charter Act’s role in federal farm policy.