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“Preserving Welfare For The Rich”: Farm Subsidies Reveal Congressional Double Standard

Congress has left me confused. Stunned, actually, as well as bewildered, chagrined and slightly depressed. The GOP-dominated House has passed a bill that defies compassion, mathematics and common sense.

OK, so there’s nothing unusual about that. Point taken.

But the recent passage of a farm bill, after months of delay, is an especially sharp example of congressional priorities — protect the rich and punish the poor, comfort the comfortable while brutalizing the afflicted. The bill will cut the Supplemental Nutrition Assistance Program (SNAP), usually known as food stamps, while preserving subsidies for farmers, most of whom could get by quite nicely without help.

By contrast, many Americans are struggling with a globalized, roboticized economy that has devalued the average worker. The new economy has forced down wages, eliminated job security and abandoned traditional perks such as pensions. It is quite possible to work 40 or 50 hours a week and still need help to put food on the table, as the managers of food pantries around the country will attest.

Yet, congressional observers are predicting that the farm bill will pass the Senate and get President Obama’s signature. While most Democrats don’t like the cuts, the current bill, they figure, is the best they can do. It takes about 1 percent from SNAP — around $800 million a year in the $80 billion-a-year program — but that’s less than conservatives had initially sought.

Still, if Republicans really care about deficits, if they really want to rein in government, if they believe people ought to stand on their own two feet and refuse the “welfare state,” why are they preserving welfare for those who need it least? Do they not see the glaring hypocrisy in their insistence on farm subsidies?

The bill does end the least politically defensible part of farm welfare: direct payments, paid to farmers whether they plant or not. But it continues a host of other unnecessary programs that cost billions — including crop subsidies and crop insurance. Indeed, the bill increases some crop subsidies, such as those to Southern peanut farmers. And the remaining programs are just as bad as the direct payments.

Take crop insurance, which has its roots in the Dust Bowl era. Though conditions have changed substantially since then — the small family farmer has virtually disappeared — crop insurance has mushroomed. In 2012, according to The Insurance Journal, taxpayers spent $14 billion insuring farmers against a loss of income. Is there any other business in America that gets that sort of benefit? Aren’t farmers supposed to be entrepreneurs willing to take risks?

This farm welfare comes at a time when agricultural income is soaring. Last year, farm income was expected to top $120 billion, its highest mark, adjusted for inflation, since 1973, the Insurance Journal said. Lots of millionaires and billionaires are on the list of those receiving the assistance.

One case of mind-boggling hypocrisy is that of U.S. Rep. Stephen Fincher, a Republican and a farmer from Frog Jump, TN, who collected nearly $3.5 million in subsidies from 1999 to 2012, according to the Environmental Working Group. In 2012, he received $70,000 in direct payments alone — again, money paid to farmers whether they plant or not. (Can anyone say “moochers” and “takers”?)

Fincher, however, supports draconian cuts to food stamps. During a congressional debate over the SNAP program, he said, without apparent irony: “We have to remember there is not a big printing press in Washington that continually prints money over and over. This is other people’s money that Washington is appropriating and spending.”

I don’t know why the cognitive dissonance doesn’t make his brain explode.

Fraud, by the way, is rampant in farm subsidies, although you’re unlikely to hear anything about it. While the occasional welfare cheat or food stamp grifter is held up as an example of widespread abuse, neither politicians nor reporters talk much about the fraud involved in agricultural programs. You have to burrow into reports from the Government Accountability Office for that. They point to millions stolen by farm cheats.

It’s enough to make you wonder what the food stamp critics are really upset about. Government spending? Or giving the working poor a little more to eat?

 

By: Cynthia Tucker, The National Memo, February 2, 2014

February 3, 2014 Posted by | Agriculture, Farm Bill | , , , , , , , | 3 Comments

“So Much For Reform”: The Only Winners In The Farm Bill Are Farmers And Big Insurance

Late Monday, House and Senate negotiators finalized a bipartisan compromise on the five-year farm bill, a warm-and-fuzzy-sounding Frankenstein-like amalgamation of crop subsidies, food stamps, and various handouts to industries loosely related to agriculture. The 949-page House-Senate compromise, two years in the making, will likely go up for a House vote on Wednesday and a Senate vote next week.

“We’ve got a bill that makes sense, works for farmers and ranchers and consumers and families that need help, and protects our land and water and our wildlife,” Sen. Debbie Stabenow (D-Mich.), chairwoman of the Senate Agriculture Committee, tells Reuters.

Stabenow may be correct that the farm bill will make it to President Obama’s desk — “it’s expected to sail through the House and Senate in the coming days — mostly because lawmakers want to get it over with already,” says The Washington Post‘s Ed O’Keefe. But it’s not exactly great for farmers and families that need help or other consumers.

The bill cuts spending by about $23 billion versus current funding levels, with more than $8 billion of that coming from cuts to food stamps, formally called the Supplemental Nutrition Assistance Program (SNAP). It amounts to roughly a $90-a-month cut to 850,000 households. That’s far less than the $40 billion in SNAP cuts in the House version, but roughly twice the reduction in the Senate bill.

Another $6 billion comes from combining 23 conservation programs into 13. Other programs being cut include the “Red Meat Safety Research Center.” But the biggest supposed saving — $19 billion — is from ending direct payments to farmers (and some landowners who don’t actually farm), which cost taxpayers about $5 billion a year.

So that sounds like shared sacrifice, right? Not exactly. Most of the money from the direct payments is being shifted to subsidized crop insurance programs. “It’s a classic bait-and-switch proposal to protect farm subsidies,” Vincent H. Smith, a professor of farm economics at Montana State University, tells The New York Times. “They’ve eliminated the politically toxic direct payments program and added the money to a program that will provide farmers with even larger subsidies.”

On the other hand, the farm lobby is lining up behind the package. “The bill is a compromise,” says Ray Gaesser, president of the American Soybean Association. “It ensures the continued success of American agriculture, and we encourage both the House and the Senate to pass it quickly.” The American Farm Bureau Association — the big muscle of the farm lobby, employing 52 Washington lobbyistsurged quick passage of the bill.

The House and Senate conferees also loosened limits on how much individual farmers can receive in subsidies and loans in a given year, to $125,000 per person from $50,000 in the earlier bills. “If what we’ve heard proves true, the deal will result in virtually unlimited farm program payments continuing to inure to the nation’s largest and wealthiest mega-farms,” says Traci Bruckner at Nebraska’s Center for Rural Affairs.

@ChadPergram : Club for Growth on farm bill: It’s a “Christmas Tree” bill where there’s a gift for practically every special interest group out there..

For an in-depth look a the politics of the farm bill, read Molly Ball’s excellent article at The Atlantic. Her thesis is that the big losers here are Republicans, since rural Red State GOP stalwarts are feeling betrayed by the intra-party fighting over the bill between the “more urban, libertarian, ideological strain” of the party represented by the Tea Party and the traditional faction that represents rural and farming interests. But it’s also pretty clear who the winners are: Farmers and insurance companies.

When America’s programs of crop subsidies began during the Great Depression, more than 20 percent of employed workers made their living on farms, earning a third of what Americans pulled in for non-farm work, Ball notes. Now, farmers make up only two percent of the U.S. workforce, and farming households earned $84,400 on average in 2010, 25 percent higher than the national average.

“Farm subsidies are welfare for the well-to-do,” argued the Cato Institute’s Tad DeHaven and Chris Edwards at The Hill. Farmers booked record profits in 2012, despite severe droughts, thanks largely to federally supported crop insurance. According to the Environmental Working Group (EWG), taxpayers pick up 62 percent of the average farmer’s crop insurance premiums. And the feds pay insurers directly, too, to the tune of $1.3 billion a year.

“In 2012, the Corn Belt’s unprecedented drought led to an insurance payout of $18 billion in crop indemnities — $14 billion of it taxpayer-funded,” Ball adds. “The insurance companies, in what should have been a terrible year for them, made a profit.” This has created a strange coalition that includes Cato and the conservative Heritage Foundation plus liberal groups like the EGW. They disagree on food stamps, she says, but “left and right alike charge that programs billed as a safety net to protect farmers from the vicissitudes of nature are instead an increasingly cushy hammock.”

The outlook is mixed for consumers. Efforts to stabilize or boost prices for farmers isn’t great for shoppers in the short run — a program to limit sugar imports and domestic production is designed to keep sugar prices artificially high. But new rules will force meat packagers to say where the animal was raised and slaughtered, a boon to label-watchers.

And in the long run, as Agriculture Secretary Tom Vilsack told the Farm Bureau’s annual meeting last week, the one percent of Americans who grow the nation’s food supply “ought to be celebrated.” Their toil lets the rest of the country pursue other work, he said. “The country ought to be reminded of it, and every farmer in this country should be valued, appreciated, and thanked.”

I like farmers and am glad when rural America gets the tools it needs to survive. But the Farm Bureau and other members of the farm lobby appears to have gotten their money’s worth in this Congress. On the other hand, it’s called the farm bill — so it’s not exactly a breach of truth in advertising.

 

By: Peter Weber, The Week, January 28, 2014

February 2, 2014 Posted by | Agriculture, SNAP | , , , , , , , | Leave a comment

“Free To Be Hungry”: Conservatives Believe That Freedom Is Just Another Word For “Not Enough To Eat”

The word “freedom” looms large in modern conservative rhetoric. Lobbying groups are given names like FreedomWorks; health reform is denounced not just for its cost but as an assault on, yes, freedom. Oh, and remember when we were supposed to refer to pommes frites as “freedom fries”?

The right’s definition of freedom, however, isn’t one that, say, F.D.R. would recognize. In particular, the third of his famous Four Freedoms — freedom from want — seems to have been turned on its head. Conservatives seem, in particular, to believe that freedom’s just another word for not enough to eat.

Hence the war on food stamps, which House Republicans have just voted to cut sharply even while voting to increase farm subsidies.

In a way, you can see why the food stamp program — or, to use its proper name, the Supplemental Nutritional Assistance Program (SNAP) — has become a target. Conservatives are deeply committed to the view that the size of government has exploded under President Obama but face the awkward fact that public employment is down sharply, while overall spending has been falling fast as a share of G.D.P. SNAP, however, really has grown a lot, with enrollment rising from 26 million Americans in 2007 to almost 48 million now.

Conservatives look at this and see what, to their great disappointment, they can’t find elsewhere in the data: runaway, explosive growth in a government program. The rest of us, however, see a safety-net program doing exactly what it’s supposed to do: help more people in a time of widespread economic distress.

The recent growth of SNAP has indeed been unusual, but then so have the times, in the worst possible way. The Great Recession of 2007-9 was the worst slump since the Great Depression, and the recovery that followed has been very weak. Multiple careful economic studies have shown that the economic downturn explains the great bulk of the increase in food stamp use. And while the economic news has been generally bad, one piece of good news is that food stamps have at least mitigated the hardship, keeping millions of Americans out of poverty.

Nor is that the program’s only benefit. The evidence is now overwhelming that spending cuts in a depressed economy deepen the slump, yet government spending has been falling anyway. SNAP, however, is one program that has been expanding, and as such it has indirectly helped save hundreds of thousands of jobs.

But, say the usual suspects, the recession ended in 2009. Why hasn’t recovery brought the SNAP rolls down? The answer is, while the recession did indeed officially end in 2009, what we’ve had since then is a recovery of, by and for a small number of people at the top of the income distribution, with none of the gains trickling down to the less fortunate. Adjusted for inflation, the income of the top 1 percent rose 31 percent from 2009 to 2012, but the real income of the bottom 40 percent actually fell 6 percent. Why should food stamp usage have gone down?

Still, is SNAP in general a good idea? Or is it, as Paul Ryan, the chairman of the House Budget Committee, puts it, an example of turning the safety net into “a hammock that lulls able-bodied people to lives of dependency and complacency.”

One answer is, some hammock: last year, average food stamp benefits were $4.45 a day. Also, about those “able-bodied people”: almost two-thirds of SNAP beneficiaries are children, the elderly or the disabled, and most of the rest are adults with children.

Beyond that, however, you might think that ensuring adequate nutrition for children, which is a large part of what SNAP does, actually makes it less, not more likely that those children will be poor and need public assistance when they grow up. And that’s what the evidence shows. The economists Hilary Hoynes and Diane Whitmore Schanzenbach have studied the impact of the food stamp program in the 1960s and 1970s, when it was gradually rolled out across the country. They found that children who received early assistance grew up, on average, to be healthier and more productive adults than those who didn’t — and they were also, it turns out, less likely to turn to the safety net for help.

SNAP, in short, is public policy at its best. It not only helps those in need; it helps them help themselves. And it has done yeoman work in the economic crisis, mitigating suffering and protecting jobs at a time when all too many policy makers seem determined to do the opposite. So it tells you something that conservatives have singled out this of all programs for special ire.

Even some conservative pundits worry that the war on food stamps, especially combined with the vote to increase farm subsidies, is bad for the G.O.P., because it makes Republicans look like meanspirited class warriors. Indeed it does. And that’s because they are.

By: Paul Krugman, Op-Ed Columnist, The New York Times, September 22, 2013

September 24, 2013 Posted by | Poverty, Public Policy | , , , , , , , | Leave a comment

   

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