Near midday Wednesday, the United States Senate narrowly passed the massive, near 1,000-page budget reconciliation package. The bill aims to reshape federal spending, making steep cuts to food assistance and healthcare for low-income people, extending tax cuts that disproportionately benefit the wealthy, and adding well over $3 trillion to the federal deficit over the next decade.

President Trump dubbed the package, which includes the much of his domestic policy agenda, the “Big, Beautiful Bill,” urging lawmakers to approve the package before a self-imposed July 4 deadline. Following a marathon amendment process that lasted through the night, Senate Republicans passed the bill with the narrowest possible margin, requiring Vice President JD Vance to cast the tie-breaking vote.

“The big not so beautiful bill has passed,” said Sen. Rand Paul, R-Ky., who joined Sens. Susan Collins, R-Maine, and Thom Tillis, R-N.C., in voting with Democrats against the package.

With significant changes from the Senate, the bill now heads back to the House where Speaker Mike Johnson, R-La.,  already struggled to corral his caucus into supporting the massive spending bill—some who were concerned over cuts to social programs and others who objected to increasing the federal deficit. Arguably the driving force behind passage is an extension of the tax cuts passed in 2017, which would expire without action.

While July 4 is a self-imposed deadline, the bill also carries a provision to increase our nation’s debt limit by $5 trillion. This needs to pass by mid-August to avoid a damaging default.

Both Minnesota senators voted against the package and have been vocal in their critiques, with Sen. Amy Klobuchar, D-Minn., dubbing cost shifts to states the ‘Big Beautiful Betrayal.’

“In nutrition assistance alone, this bill shifts tens of billions of dollars onto the states, creating chaos for state budgets and hardship for families,” she said on the Senate Floor speaking on a point of order. “It’s hurting local grocery stores. It’s hurting our farmers, and it’s all done to pay for tax cuts to the wealthy. I say to our colleagues, vote for families over billionaires.”

The bill would newly require states to cover a portion of SNAP benefits and shoulder additional costs for administration—moving from a 50-50 cost share to a 25-75 cost share. For counties, they have already started sounding the alarm about the need to increase property taxes should the bill pass.

MFU President Gary Wertish has criticized cuts to SNAP.

“As farmers, it’s part of our job to feed everybody, and it’s something we’re proud to do,” he said during a press event with state officials. “However, recent proposals to cut billions from the federal SNAP program threaten families and the broader agricultural system. The SNAP program is a safety net. The farm bill is a safety net for farmers when times aren’t good, but it’s also a safety net for families.”

According to an estimate from the nonpartisan Congressional Budget Office (CBO), upwards of 10 million more Americans would lose their health insurance over the next decade if the bill becomes law, with an additional 4 million losing coverage due to the expiration of tax credits for farmers and others who purchase health insurance on the individual market (expanded premium tax credits).

This could be devastating for rural hospitals, particularly given that they disproportionately serve patients covered by Medicaid. According to one estimate, Medicaid spending in rural areas could decrease by as much as $119 billion over the next decade.

Beyond significant SNAP cuts, the Senate-passed reconciliation package makes incremental improvements to the farm safety-net and extends the 45Z Clean Fuel Production Credit through 2029. The bill includes an important provision to only allow feedstocks from the U.S., Canada, and Mexico in an effort to curb importing used cooking oil. Farm program changes include increasing reference prices for the Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC) programs, allowing a dual enrollment option in 2025. The bill also adds to Dairy Margin Coverage (DMC), reduces crop insurance premiums, and allows for 30 million new base acres. In total, these changes would cost around $67 billion over 10-year horizon, changes that are paid for through cuts to the nutrition title.

“There are some meaningful provisions in this bill,” said NFU President Rob Larew in a statement ahead of the Senate vote. “It strengthens the farm safety net, invests in biofuels and conservation, and extends key tax incentives. But these gains are paired with harmful tradeoffs—most notably, cuts to SNAP and Medicaid and new, broader loopholes in farm program payment limits.”

Grassley pulls payment limit amendment

On Tuesday, Sen. Chuck Grassley, R-Iowa, pulled an amendment that would have forced a vote on payment limits. The Senate bill would increase farm program payment limits from $125,000 to $155,000 and remove income caps from farmers who draw more than 75 percent of their income from farming. In addition to preventing these changes, Grassley’s amendment would have required farmers “actively engaged” in farming to provide at least 25 percent of the total management hours or 500 hours annually.

Standing apart from many agriculture organizations, National Farmers Union shared support for the Grassley amendment, stating that it would “[close] loopholes and better target support to family farmers and ranchers. These improvements are essential to restore fairness.”

“Farm policy should unite us,” continued NFU President Rob Larew. “We urge lawmakers to redouble their efforts to deliver a farm bill that works for everyone.”

USDA cuts expected

While all eyes are on reconciliation, the standard budgeting process has also kicked off in Washington with the Trump administration calling for additional steep cuts to United States Department of Agriculture (USDA) programs.

As part of the annual federal budget process, the president submits a budget proposal to Congress outlining their funding priorities. While the proposal does not determine final funding allocations, it signals the administration’s policy goals and launches the negotiation process with Congress, who ultimately controls federal spending.

The President’s latest proposal includes a $259 million cut to the USDA’s Farm Service Agency (FSA) salaries and expenses, which would result in a 32 percent reduction in full-time FSA staff nationwide. In Minnesota, staffing is estimated to drop from 423 employees in 2024 to 319 in 2026—a 24.5 percent decrease.

The Rural Development Office in Minnesota is also projected to lose one-third of its staff through the proposal, while the Natural Resource Conservation Service (NRCS) would face heavy reductions as well.  Several USDA programs would also be eliminated entirely including State Mediation Grants, the Emergency Conservation Program, Urban Agriculture Innovative Production and the Grassroots Source Water Protection Program. In addition to staffing losses, if enacted, this budget could force many USDA offices to close or consolidate. The Minnesota Farm Service Agency is encouraging producers to apply early for USDA programs and monitor local office changes.

As always, this is just a snapshot of legislative developments, if you have questions, thoughts, or concerns, please reach out at (320) 232-3047 (C) or stu@mfu.org.