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  • You Won’t Believe What’s in the $1 Trillion Farm Bill Disaster

    The farm bill isn’t getting the attention it deserves.  Congress is likely very aware of this fact and is pouncing on a chance to get its farm bill through.  Tonight’s State of the Union address further provides cover for what Congress is about to do to the American public this week.   The House is expected to vote tomorrow on this nearly $1 trillion farm bill, which is projected to cost even more than the Obama stimulus bill.

    The House and Senate farm bill negotiators have come up with a bill that is filled with central planning policies, handouts to special interests, and wasteful spending.  The winners are the special interests.  The losers are everybody else, including taxpayers, the poor, consumers, and virtually any other group you can think of.

    Put simply, the bill picks all the bad parts of the House and Senate farm bills and leaves out any of the good provisions (and there were few good things as it was).  Here’s just a quick sampling:

    The Bill

    No Separation:  The farm bill is really the “food stamp bill.”  About 80 percent of the farm bill spending is devoted to food stamps.  Ranking Member of the Senate Agriculture, Nutrition, and Forestry Committee, Senator Thad Cochran (R–MS), explained the farm bill politics well when he argued that the farm bill should include food stamps “purely from a political perspective” since “it helps get the farm bill passed.”

    The House showed leadership by including a provision in its farm bill that would reauthorize farm programs and food stamps for different periods of time to ensure that these programs would at least be considered on different schedules in the future.   This would allow both programs to be considered on their own merits, making real reform a possibility and helping to take politics out of the farm bill and replacing it with the interests of the American people.

    In a shocking move, the House gave up this important common sense reform that has wide support:

    • The public overwhelmingly supports separation.
    • There is diverse support for separation in the media, from The Washington Post to The Wall Street Journal.
    • Representative Marlin Stutzman (R–IN) led a group of 27 House members who sent a letter to the farm bill conferees expressing strong support for separation.

    House Caves on Food Stamp Spending. Food stamp spending has quadrupled since FY 2000 and doubled since 2008. The House bill would have reduced spending by about $39 billion, while the Senate would have reduced spending by only $4 billion. The reported “compromise” is about $8 billion, which is $31 billion less (80 percent less) than what the House sought.

    Broad-Based Categorical Eligibility Loophole Is Ignored. This problematic policy, put in place in 2000 and pushed heavily by the Obama administration, allows food stamp recipients to enroll in the program even if they have $1 million in the bank.  Food stamp recipients could have an unlimited amount of assets, but if their income is low enough, they could still receive food stamps. Congress had the opportunity to eliminate this policy, which would have resulted in $12 billion in savings over a decade, but chose instead to turn a blind eye to it.

    No Real Work Requirement.  Congress had the opportunity to implement a strong work requirement, putting food stamps on course to promote self-sufficiency for able-bodied adults. But the work provision in the bill is nothing more than a mere work “suggestion.” A strong work requirement is the most crucial reform for food stamps, but Congress has failed to include such a policy.

    Requires the Christmas Tree Tax. The bill directs the USDA to lift the stay that is blocking the mandatory assessment (i.e. “tax”) on Christmas trees.

    Virtually Unlimited Taxpayer Liability. There are two new programs that have been added to replace direct payments, one of which covers even minor losses for farmers.  The potential costs of these programs could skyrocket based on even modest changes in commodity prices.  This is why the House bill had a price ceiling, or cost cap, limiting the exposure that taxpayers would have to pay out for these unknown and costly programs.  The new bill doesn’t appear to have such a cost cap—basically, taxpayers are faced with a blank check while farmers are being covered for virtually any risk.

    No Taxpayer Reforms for the Crop Insurance Program.  Taxpayers pay about 62 percent of the premiums for farmers in the crop insurance program.  Other farm programs have a cap on the amount of subsidies received.  Even the direct payment program had a $40,000 cap.  Neither the House nor Senate bill had this reform, so it isn’t a surprise that it wasn’t included in the bill.

    However, it is a surprise that one reform in the Senate bill that could have adjusted the premium levels for farmers with adjusted gross income of $750,000 or more appears to have been excluded.

    Repeal of the Catfish Inspection Program is Taken Out. There may be no better poster child for what’s wrong with the farm bill than the fact that the $14 million a year, duplicative and unnecessary USDA catfish inspection program wasn’t repealed.   The House would have repealed the program, and the GAO, not always known for strong recommendations, has consistently suggested to Congress that the program should be repealed.

    The list could go on, and as this 949-page bill is examined, there will certainly be more bad news.  Unfortunately, the House is set to vote on this massive bill less than 48 hours after the text was made available.  Apparently, we won’t know what’s in the farm bill until after we pass it and the public is harmed by its policies.

    Posted in Capitol Hill, Economics, Front Page [slideshow_deploy]

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