“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 lobbyists — urged 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.
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
“Republican Alternative To Obamacare”: Pay More, Get Less, Put The Insurance Companies Back In Charge
Boy, can Democrats have fun with the new Republican alternative to Obamacare. It puts the health insurance companies back in charge and raises costs for almost all Americans. In particular, it substantially raises costs and threatens to cut coverage for the half of all Americans who get health insurance at work. Seniors, the group that Republicans have scared witless about Obamacare, would lose the real benefits they receive under Obamacare. The proposal from three Republican senators is a golden opportunity for Democrats to contrast the specific benefits of the Affordable Care Act (ACA) with what a repeal-and-replace agenda would really mean for Americans’ lives and health.
When it comes to the politics of health care reform, my first adage is “the solution is the problem.” That is because once you get past vague generalities, like lowering costs and making coverage available, to proposing specifics, people will look to see how the proposals impact them personally. This is why health reform is such a political nightmare. Unlike most public policy issues, the impact is very understandable and real.
With the ACA as the law of the land, in analyzing the Republican proposal we must compare its impact to the law it would repeal. The pre-ACA model of health insurance is irrelevant. Here is how the Republican plan would impact people, compared with the ACA:
People who get health insurance at work – bottom line: pay more for worse coverage.
Almost half of all Americans (48 percent), or 148 million people, obtain health insurance at work. The Republican plan would tax 35 percent of the average cost of health insurance benefits at work. This is a big tax increase on working people and is extraordinarily unpopular, as the Obama campaign used to devastating impact on John McCain. And while people would pay more, they would get less coverage, as the GOP plan would allow insurance companies to once again limit the amount of benefits they will pay out in one year and return to the day when employers could offer bare-bones plans.
While taxing health benefits would apply to all employer-provided coverage, the Republicans would give the 30 percent of people who work for businesses who employ fewer than 100 workers a tax credit. That might balance out the increased taxes for some people. However, doing so would create a huge set of economic distortions, as employers might seek to keep firm size under the 100-employee threshold.
Individuals who buy coverage on their own or who are uninsured – bottom line: insurance companies could again deny coverage for pre-existing conditions and offer bare-bones coverage, while the cost of decent coverage would go up for most people.
This is the group that the ACA is most aimed at helping, including the 5 percent of Americans who buy private health insurance and the 15 percent who are uninsured, totaling 64 million people. The ACA offers income-based subsidies to these people when they earn between 100 percent and 400 percent of the federal poverty level (FPL) and enrolls people under 133 percent of FPL in Medicaid, when states agree.
The Republican plan is toughest, in comparison with the ACA, on the lowest-income people and on the higher-income middle class, compared with Obamacare. But many families in between will do worse too.
The Republican plan would wipe out the expansion of Medicaid to people earning less than 133 percent of FPL, a provision the Supreme Court has made optional. It would cut back on Medicaid, ending the federal government’s offer to pay 90 percent of the cost of expanded coverage and replacing that with the federal government paying what it has paid historically, which is between half and three-quarters of the cost of Medicaid, with poorer states getting a bigger share. Crucially, the funding would only be for pregnant women, children and parents with dependent children who earn under the poverty level, as opposed to the ACA’s funding of all adults up to 133 percent of FPL. That means many fewer people covered and states getting less Medicaid money. Republican governors may not complain, but you can bet hospitals will. Adults without dependent children would not be covered by federal Medicaid, which means millions will stay uninsured or lose coverage they now have, unless states pay for coverage without federal support.
For individuals not covered by Medicaid or employees of firms with fewer than 100 workers, the Republican plan would replace the ACA’s sliding-scale subsidies, which now go to 400 percent of FPL, with a subsidy that is the same for everyone of the same age who is under 200 percent of FPL and lowersubsidies for people from 200 percent to 300 percent. In addition, the subsidies would be higher for older people than younger. The Republican plan also would take away the requirements that insurance plans offer decent benefits and free preventive care and charge women the same prices as men for coverage, along with every other consumer protection, with the exception of keeping in place no lifetime caps for covered benefits.
Comparing the value of the Republican plan subsidies vs. the ACA subsidies for the people who would still qualify depends on income, age, and family size. Generally, it appears that the Republican subsidies are much less than the ACA for people under 150 percent of the FPL ($35,000 for a family of four) and much less than the ACA for younger people, but more for older people. However, insurance rates for younger people would go down some at the expense of older people, who insurance companies could charge a lot more than under ACA. And families with incomes above $70,000 for a family of four would lose subsidies entirely.
Seniors and the disabled on Medicare – bottom line: seniors would pay more for prescription drugs and preventive care.
By repealing the ACA, the Republican plan would take away its two concrete benefits for seniors. One is that preventive care services are now free under Medicare (as they are under all insurance). The other is that the ACA is lowering drug prices for seniors by slowly closing the “donut hole,” under which seniors must pay the full cost of prescription drugs even though they are paying premiums for drug coverage. In other words, the Republican plan is simply bad news for seniors, the constituency that they have scared the most about Obamacare… groundlessly.
It is not surprising that Republicans have been reluctant to come up with a replacement for Obamacare. It’s much easier to throw darts – or bombs – at the ACA than to come up with a replacement that meets Republican ideological tenets of less regulation and less government. Any plan that meets the ideological test will be much worse for people in ways they can understand. It is our job to explain it to the public clearly: pay more, get less, put the insurance companies back in charge. This debate is not simply the political game Republicans want to make it. It is about our health and our lives.
By: Richard Kirsch, The National Memo, January 29, 2014
“All Right, There Are Two Republican Parties”: From The Comically Rote To The Grimm Series
Republican pundits have been arguing recently that immigration reform could splinter the party ahead of the 2014 elections. They shouldn’t be worrying about immigration. The Republicans’ response to President Obama’s State of the Union showed that the G.O.P. is actually two parties, or perhaps even more.
There were three organized responses — one official, one Tea Party, one libertarian — and one impromptu response involving the buffoonish behavior of a Congressman from Staten Island. (More about that in a minute.)
The Stepford Response: The official rebuttal, delivered by Representative Cathy McMorris Rodgers of Washington, was comically rote and devoid of real content.
Ms. Rodgers started with the obligatory summation of her humble beginnings — a “nation where a girl who worked at the McDonald’s Drive Thru to help pay for college can be with you from the United States Capitol.” These tired stories — which Mr. Obama also tossed into his speech — are nearly as old as the republic.
She then went on to say: “The most important moments right now aren’t happening here. They’re not in the Oval Office or in the House chamber. They’re in your homes. Kissing your kids goodnight. Figuring out how to pay bills. Getting ready for tomorrow’s doctor visit. Waiting to hear from those you love serving in Afghanistan, or searching for that big job interview.”
Everyone with a heart values those moments. They happen to be exactly the same kind of moments that Mr. Obama evoked in his State of the Union. The difference is that the president offered a series of proposals about how to improve the lives of Americans and address the fundamental inequality in the country. Ms. Rodger offered none, just the usual misty-eyed evocations of the “real America” that are meant to imply that the rest of us do not belong.
The Storm the Castle Response: Representative Mike Lee of Utah delivered a spirited Tea Party rebuttal. He launched an attack on “ever-growing government” and celebrated the way that the original Boston patriots, who held the Original Tea Party, did not just stop there.
“It took them 14 long years to get from Boston to Philadelphia, where they created, with our Constitution, the kind of government they did want,” Mr. Lee said, glossing over what happened during those years — a full-blown, bloody revolution. I guess he’s not preaching that for now.
Mr. Lee talked a lot about inequality, which he blamed entirely on Washington, and mostly on Democrats, as if the kind of de-regulation that he presumably favors did not produce an out-of-control financial industry whose irresponsibility and excesses almost destroyed the economy.
The Non-Threatening Insurgent: Senator Rand Paul, the self-appointed leader of libertarians, delivered an extremely amiable speech.
He started, of course, with what seems to be his all-time favorite quote, Ronald Reagan saying that “government is not the answer to the problem, government is the problem.” And he salted his speech with folksy sayings. We should not “reshuffle the deck chairs on the Titanic,” he said, although I wasn’t entirely sure what he was talking about. Listening to Mr. Paul is entertaining. “It’s not that government is inherently stupid,” he said, “although it’s a debatable point.”
But he has an odd sense of cause and effect. He said the recession, mass unemployment and the stock crash of 2008 were “caused by the Federal Reserve,” because it encouraged banks to give money to people who could not pay it back. But he left out the fact that it was the lifting of financial regulations on the banks that actually spurred them to do dangerous things, like offer risky loans. So when Mr. Paul talked about nixing other “burdensome, job killing regulations,” I got worried.
The most interesting thing about his comments was how much milder they were than last year, when he said that the true bipartisanship of Washington was the failure of both of the main political parties in pretty much every area. Is he running for president?
The Class Clown Response: Although not an official or even unofficial rebuttal, Rep. Michael Grimm of Staten Island’s comments after the State of the Union seem to say…something…about the Republican Party.
In a post-address interview, Michael Scotto of NY1 dared to stray from the topic at hand, asking Mr. Grimm about a federal investigation into his campaign fund-raising.
Mr. Grimm grew so irritated that he threatened to throw Mr. Scott off the balcony, or alternatively to “break you in half. Like a boy.” He tossed in at least one profanity and informed Mr. Scotto that “you’re not man enough, you’re not man enough.” It’s not clear what for.
Mr. Grimm at first tried to explain his behavior by saying that it wasn’t fair to add questions about the criminal case to an interview on the State of the Union. After several hours of everyone pointing out how ridiculous that was, NY1 said Mr. Grimm finally apologized.
By: Andrew Rosenthal, Opinion Pages, The New York Times, January 29, 2014
“Just The Tip Of The Iceberg”: The Real Scandal With Tough-Guy Rep Michael Grimm
Rep. Michael Grimm (R-N.Y.), a two-term Staten Island congressman with stints in the Marines and FBI, grabbed our attention after President Obama’s State of the Union address on Tuesday night. More specifically, he grabbed NY1 reporter Michael Scotto after Scotto asked him about a bubbling campaign finance scandal, memorably uttering these words, caught on the rolling camera’s video (watch http://youtu.be/425ysh-24wo):
Let me be clear to you, you ever do that to me again I’ll throw you off this f—ing balcony…. You’re not man enough, you’re not man enough. I’ll break you in half. Like a boy. [NY1]
Alright, that’s probably a sentiment a lot of politicians have wanted to convey to a reporter. But now, thanks to Grimm’s threats, everybody knows that he is embroiled in, and touchy about, something to do with allegedly illegal campaign donations. Before we get to that story, Grimm decided to address his partial-on-camera outburst with this statement:
I was extremely annoyed because I was doing NY1 a favor by rushing to do their interview first in lieu of several other requests. The reporter knew that I was in a hurry and was only there to comment on the State of the Union, but insisted on taking a disrespectful and cheap shot at the end of the interview because I did not have time to speak off-topic. I verbally took the reporter to task and told him off because I expect a certain level of professionalism and respect, especially when I go out of my way to do that reporter a favor. I doubt that I am the first member of Congress to tell off a reporter, and I am sure I won’t be the last.
MSNBC’s Benjy Sarlin sarcastically cuts to the PR lesson:
Well this careful apology should ensure this Michael Grimm story goes away fast pic.twitter.com/vMymkxViuZ
But here’s the story Scotto was asking Grimm about in the Capitol rotunda: Last week, the FBI arrested Grimm’s fundraiser (and ex-girlfriend) Diana Durand on charges of illegally contributing more than $10,000 to Grimm’s 2010 campaign through straw donors. Here’s how the New York Daily News describes the alleged “donor swapping”:
The swapping works like this: A donor who gives the maximum to Candidate A then donates to Candidate B — and in return, a donor or friend of Candidate B gives an identical amount to Candidate A. [NY Daily News]
In one case described by the Daily News, Candidate A was Bert Mizusawa, a GOP House candidate in Virginia, and the maxed-out donor was Washington lawyer Bazil Facchina; Durand was the second alleged donor, and Grimm Candidate B. The newspaper said its review of 2010 federal campaign finance record found at least another 20 such transactions involving Grimm and fellow candidates in California, South Dakota, Illinois, and Virginia.
The Daily News investigation implicates Grimm personally in one questionable transaction, but he’s not listed in the Justice Department indictment. But Grimm has been under investigation for two years, and Durand is merely the newest wrinkle. In August, Ofer Biton — a former top aide to Israeli Orthodox Rabbi Yoshiyahu Pinto — pleaded guilty to visa fraud; in early 2012, The New York Times reported that Biton and Grimm allegedly sought illegal campaign donations from Pinto followers, including large cash contributions and donations from undocumented immigrants.
Even with those allegations, Grimm’s constituents re-elected him in 2012, 48 percent to 43 percent. He first won election in the GOP wave of 2010, unseating freshman Democrat Michael McMahon by about three points. But let’s face it, campaign finance violations fall into the category of “boring but important,” with an emphasis on boring. Threatening to murder a reporter with your bare hands? Not boring.
And that’s not even the most colorful story in Grimm’s recent past. (No, I’m not talking about this one.) In 2006, after leaving the FBI, he opened up a health food restaurant with an alleged mobster with ties to the Gambino crime family. And in 2011, Evan Ratliff wrote about FBI undercover operations in The New Yorker, including some eyebrow-raising allegations about Grimm from a New York City Police officer who was moonlighting as a bouncer. At the time, July 1999, Grimm was an FBI agent, apparently dating a married woman.
According to the NYPD officer, Gordon Williams, Grimm and the woman entered a nightclub in Queens, Caribbean Tropics, around midnight and ran into the woman’s estranged husband. Williams broke up the ensuing altercation, but says Grimm and the husband returned at 2:30 a.m. for a standoff in the club’s garage, with Grimm waving a gun around, screaming he was going to kill the guy, and saying: “I’m a fucking FBI agent, ain’t nobody going to threaten me.” Ratliff then recounts this epilogue:
Grimm left the club, but at 4 a.m., just before the club closed, he returned again, according to Williams, this time with another FBI agent and a group of NYPD officers. Grimm had told the police that he had been assaulted by the estranged husband and his friends. Williams said that Grimm took command of the scene, and refused to let the remaining patrons and employees leave. “Everybody get up against the fucking wall,” Williams recalled him saying. “The FBI is in control.” Then Grimm, who apparently wanted to find the man with whom he’d had the original altercation, said something that Williams said he’ll never forget: “All the white people get out of here.” [New Yorker]
Completely accurate or not (Grimm says not), that’s a pretty juicy story. And not many people would know about it if Grimm had kept his temper in check Tuesday night.
By: Peter Weber, The Week, January 29, 2014
“Obama’s Best State Of The Union Speech”: Pretty Sure The Last Three Years Of His Presidency Won’t Be Boring
With a strong, optimistic beginning and an unforgettable ending, that may have been President Obama’s best State of the Union speech. Apparently none of the commentators who have been saying his presidency is on its last legs bothered to let him know.
He opened with a portrait of the country – not an America gripped by crisis or mired in despondency, but a sunny place where unemployment is falling, school test scores are rising, housing prices are recovering, deficits are shrinking and manufacturing jobs are coming home. “I believe this can be a breakthrough year for America,” Obama said. The big problem, he said, was the performance of the people sitting before him in the House chamber: “We are not doing right by the American people.” He went on to excoriate Congress for its insistence on trench warfare, challenged his opponents to “focus on creating new jobs, not creating new crises” and pledged that if Republicans won’t work with him, he will take executive action where possible.
But the president’s tone throughout the speech was buoyant, not sour. His defense of the Affordable Care Act was an observation that House Republicans’ first 40 useless votes to repeal the law really should suffice. Even when he bludgeoned the GOP over long-term unemployment benefits or the minimum wage, he did it with a smile. His argument for equal pay and family leave? “It’s time to do away with workplace policies that belong in a ‘Mad Men’ episode.” His call for raising the federal minimum wage to $10.10? “Join the rest of the country. Say yes. Give America a raise.”
There was much that Obama did not say. I heard only one vague, substance-free sentence about domestic surveillance. There was no real discussion of foreign policy until the speech neared the one-hour mark, and the really tough problems where U.S. ideals and interests are out of alignment – Egypt, for example – were not grappled with. The specific executive actions he has vowed to take are significant but not earth-shaking – with one exception: Obama promised to use his authority to regulate carbon emissions. If he is as serious about tackling climate change as he said tonight, this may turn out to be one of the most important speeches of his presidency.
The end of the speech, a tribute to wounded Sgt. 1st Class Cory Remsburg, was an indelible moment. To end with such a powerful story of bravery and resilience gave emotional depth to the overall theme of the speech: America is back. I don’t know how much of his agenda Obama will achieve. But I’m pretty sure the last three years of his presidency won’t be boring.
By: Eugene Robinson, Opinion Writer, The Washington Post, January 29, 2014
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