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Mr. Chairman and Members of the Subcommittee, I appreciate the opportunity to discuss the Conservation Reserve Program (CRP). My statement this morning will briefly describe how the Congressional Budget Office (CBO) baseline for the CRP is constructed and how we interpret various Administration actions and budget rules as they relate to estimating the budgetary impact of this program.

The CBO baseline currently assumes that, beginning in fiscal year 1996, CRP contracts will not be extended when they expire. Although some have suggested that the baseline projections should assume extension of the existing contracts, CBO has no basis for assuming that contracts will be extended, and indeed the law governing baseline projections does not require such an assumption. Consequently, over the next five years, the baseline shows spending for the CRP declining from a high of $1.8 billion in 1995 to about $735 million in 1999 as contracts covering almost 30 million acres expire.

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