I once saw a very conservative member of Congress, someone I respect and with whom I have worked on many issues, tell a room full of free-market activists that he considers himself 99 percent free market capitalist and 1 percent socialist – when it comes to agricultural subsidies.
This is a pretty common mentality in Washington, so I was disappointed but not surprised last week when the Senate Agriculture Committee passed a massive $480 billion farm bill on a 12-4 vote – with all four no votes opposing the bill because they wanted to spend even more.
Quite simply, ag subsidies have become a third-rail entitlement and are out of control.
The Senate Farm Bill manages to outspend President Obama’s budget for farm bill programs by $10 billion. While the bill does finally eliminate direct subsidy payments to farmers, saving $44.6 billion, it keeps in place lavishly subsidized crop-insurance programs. According to the GAO, the federal taxpayer already picks up the tab for 62 percent of crop insurance premiums, to the tune of $7.3 billion last year.
The Senate Farm Bill also creates a brand new entitlement program for so-called “shallow losses.” Under the new program, if a farmer’s revenue from a crop drops 11% below its five-year average, taxpayers will make up the losses. The program has a projected cost of $29.2 billion over the next decade.
The 900-page bill is also chock-full of the usual corrupt, special interest provisions that sneak into farm bills. The watchdog group Taxpayers for Common Sense has already found several special interest provisions benefiting the cotton industry with above-market guaranteed prices and trade protections.
Perhaps the most shocking outrage in the Senate Farm Bill, however, came not from Chairwoman Debbie Stabenow (D-Mich.) but from Dick Lugar (R-Ind.). Lugar, in a tough primary fight for his political life, teamed up with retiring Democrat Kent Conrad (D-ND) to offer an amendment vastly expanding the bill’s energy title with additional spending. -- Lugar apparently thinks he can buy favor with voters by outspending his profligate colleague Debbie Stabenow with $800 million in expanded energy subsidies.
The Lugar-Conrad amendment funds programs that direct taxpayer dollars to ethanol and other biofuels, including $216 million for the Biomass Crop Assistance Program (BCAP). As Agriculture Inspector General Phyllis Fong testified, BCAP has “suffered from hasty implementation that did not include management controls adequate to prevent abuses.” BCAP was slated for elimination last year in the House.
The Lugar-Conrad amendment also spends $241 million for the Rural Energy for America Program (REAP) which is a Solyndra-style program of grants and loans for renewable energy and energy efficiency projects. Over the past couple of years REAP has become a slush fund for Agriculture Secretary Tom Vilsack to funnel tax dollars to subsidize ethanol blender pumps. Given Vilsack’s obvious affinity for ethanol, the increase in REAP funds will likely be used to prop up that failed industry.
Unfortunately, it appears the bill that passed the Senate Agriculture Committee is headed for passage in the full Senate later this month.
The House must do better.
Elected on a wave of concern about out-of-control federal spending, the House should make clear that any Farm Bill provisions that create new entitlements or extend corrupt special-interest energy giveaways will be dead on arrival.
The current farm bill expires at the end of September and this should be the Congress that finally ends corporate welfare for farmers and the usual larding up of “must-pass” bills. It’s time for Republicans to stand up for the free market, even when it comes to agriculture.
Phil Kerpen is the president of American Commitment and the author of "Democracy Denied: How Obama is Bypassing Congress to Radically Transform America - and How to Stop Him."