2012 Farm Bill: That's a Clown Cut, Bro
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Farm Bill 2012: Over-regulation Strikes Again!
To the disappointment of those who wanted to see reform and fiscal responsibility prevail, Debbie Stabenow’s (D-Mich.) farm bill passed in the Senate on Thursday with a vote of 64-35. The proposed bill fails to reform certain programs like sugar, makes other wasteful programs like dairy even worse, and creates a whole new entitlement program for farmers, while spending 60 percent more than the last farm bill and only cutting a paltry $23 billion from the deficit over the next ten years. This farm bill will leave a wide path of destruction behind it: consumer prices will increase, costly entitlement programs will bloat, and market distortions will continue to run wild.
Americans for Tax Reform and numerous other organizations called for actual reform and spending cuts that would shrink government’s involvement in agriculture and chip away at our country’s massive deficit.
After hundreds of amendments were put forward, Senate Majority Leader Harry Reid allowed for a bundle of 73 to be voted on for the past 3 days in the Senate. Unsurprisingly, most of the best, free-market oriented amendments failed. Americans for Tax Reform highlighted some amendments that would attempt to correct some of the atrocities of the bill. The Lee Motion to Recommit, for example, would save taxpayers hundreds of billions of dollars by returning the current farm bill (which spends $969 billion) to 2008 spending levels (which spent about $600 billion). This amendment was unfortunately rejected. The Toomey Amendment, that would have brought much needed free-market reform to sugar programs, was also rejected.
However, showing some of the hoped for reform, an amendment by Sens. Tom Coburn (R-Okla.) and Dick Durbin (D-Ill.) passed that will means test crop insurance premium subsidies. The amendment, which reduced subsidies by 15 percent for farmers with an adjusted gross income of more than $750,000, garnered 66 votes. Showing their support for crony capitalism and a reluctance to cut spending, Sen. Stabenow and two-thirds of her Senate Agriculture Committee members voted against the amendment.
Senator Stabenow said, “This Farm Bill is unlike any other before it—it cuts spending, ends subsidies, improves accountability and strengthens healthy food systems. We are now closer than ever to achieving real reform in America’s agriculture policy.” This is false rhetoric. The trillion-dollar farm bill spends 60 percent more than its predecessor, enacts a new subsidy entitlement program for agri-business, and lacks any real reform. Programs that needed complete overhaul were left alone and amendments that could have corrected these oversights were struck down.
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ATR Calls for More Reform and Less Lip Service in 2012 Farm Bill
The Senate is poised to take up the 2012 Farm Bill this week. The bill, sponsored by Sen. Debbie Stabenow (D-Mich.), claims to include sweeping reform of current programs. But, despite these large claims, the new bill provides very little change, continuing to intervene in free markets, drive up consumer prices, and leave taxpayers to pick up the tab. What reform it does include is in the wrong direction. Programs badly in need of reform, such as sugar and dairy programs, are left untouched or move further away from a free market. Other reforms, such as the switch from direct subsidies to subsidized farmer insurance, will prove equally distortionary and costly to taxpayers.
Americans for Tax Reform responded with a strong letter that exposes the deep flaws in this bill, urging Senators to vote against the farm bill. In light of this legislation’s shortcomings, ATR also supports an amendment to the bill that will provide at least minor relief to the farm bill’s atrocious distortions of the sugar market, ridding programs of inefficient add-ons from the 2008 Farm Bill and including other free market-oriented provisions. The letter from ATR can be found below or you can click here to read it.
June 4, 2012
United States Senate
RE: Oppose S. 3240, the Agriculture Reform, Food, and Jobs Act of 2012
I write urging your strong opposition to S. 3240, the Agriculture Reform, Food, and Jobs Act. Despite claims of reform, this farm bill largely continues the failed farm policies of the past by dramatically increasing food prices for consumers, manipulating supply and demand, imposing new regulations, and propping up farmers and agri-businesses at the expense of taxpayers.
While the bill rightly aims to end costly direct payments, it creates an entirely new taxpayer-funded program to subsidize “shallow loss” insurance for farmers. The shallow loss program has the potential to cost taxpayers even more than the current $5 billion spent annually on direct payments, especially if commodity prices drop from their current highs. The change also eliminates transparency in government spending on agriculture, hiding the billions sent each year from taxpayers to farmers with incomes nearly double that of the average American family.
Congress is right to focus on spending cuts, however the cuts contained in Sen. Debbie Stabenow’s (D-Mich.) farm bill are insufficient, especially when considering the potential for new programs to expand. The spending cuts in S. 3240 are also substantially below targets proposed by the House of Representatives and President Obama.
Despite claiming to reform agriculture, many of the most costly programs lack reform or are simply made worse. Antiquated and convoluted sugar programs, which collectively cost consumers $3.5 billion per year in higher food prices, are left untouched. Dairy programs contain new supply management techniques to raise consumer prices, enact what is effectively a new tax on farmers, and impose new, costly regulatory mandates.
In a stagnant economy with Americans out of work and struggling to put food on the table, the last thing we need is a farm bill that makes food more expensive. With Americans demanding fiscal responsibility from Congress, the last thing we need is a new costly and less transparent farm subsidy program. And with an opportunity to truly reform farm programs toward free-markets for the better, the last thing we need is reform in name only. But this is exactly what Sen. Stabenow's farm bill brings.
I strongly urge you to vote against S. 3240 and instead work to craft a free-market farm bill that does not artificially distort markets to the extreme detriment of taxpayers and consumers. If you have any questions, please contact Kelly William Cobb at (202) 785-0266.
President, Americans for Tax Reform
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Less Waste, More Transparency in Government Broadband Loans
Americans for Tax Reform and seven other free-market institutions signed a letter that urges legislators to prevent waste of tax dollars on broadband infrastructure in the new Farm Bill. The Rural Utilities Service (RUS) was given billions of taxpayers’ dollars in order to subsidize growth of broadband into rural areas. But RUS, which operates under the Department of Agriculture, has shown imprudent use of these funds. Many of the grants and loans given by RUS were used to over build existing broadband service in urban areas and the House has complained that RUS lacks enough transparency to be trusted. Click here or see below for a copy of the letter.
United States Senate May 21, 2012
As the Senate completes work on the reauthorization of the Farm Bill, the undersigned groups urge you to ensure that there is strict oversight for the Rural Utilities Service (RUS) Broadband Loan Program to prevent taxpayer funded over building on established broadband networks.
We would prefer the government leave the private sector broadband market alone, and save us taxpayers the money. It has flourished in the absence of government "assistance," already delivering service to over 98 percent of Americans. An end to the broadband "stimulus" would be best. Barring that, rigid oversight - of the sort not yet exhibited by RUS – of how our billions of dollars are spent must be emplaced.
RUS has had a history of approving loans to companies who build broadband systems in areas that are already served. And, the areas where these companies build are often already served by multiple private broadband providers.
RUS’s Rural Broadband Access Loan and Loan Guarantee Program was established by Congress as part of the 2002 Farm Bill, and modified as part of the 2008 Farm Bill. Its primary goal is to provide loans to help bring Internet broadband service to unserved rural communities, which are generally defined as communities with populations of less than 20,000.
A March, 2009 report by the U.S. Department of Agriculture’s (USDA) Office of Inspector General (OIG) observed that while the 2008 Farm Bill modified the broadband program and narrowed the definition of “rural area,” the RUS continued to issue loans in exurban and suburban areas. Instead of funding deployment in unserved rural areas, the RUS had funded service in 148 communities which were within 30 miles of cities with 200,000 inhabitants, including communities near very large urban areas such as Chicago and Las Vegas.
That same report reiterated that the Office of Inspector General (OIG) remained concerned that the existing broadband program may not meet the Recovery Act’s objective of awarding funds “to projects that provide service to the most rural residents that do not have access to broadband service.”
According to a report by the USDA on April 23, 2012, “We found that RUS had not maintained its focus on rural communities most in need of Federal assistance. This is largely because its definition of ‘rural area,’ although within the statutory guidelines, was too broad to distinguish between suburban and rural communities. As a result, RUS issued over $103.4 million in loans to 64 communities near large cities.”
Not only does this misuse of taxpayer dollars do little to help the areas of the country that still don’t have broadband, but it also causes private broadband providers to reconsider the build-out and upgrade of their systems, when faced with not only private competition but frequently also a government subsidized competitor.
In the interest of taxpayers and ensuring a vibrant free market in broadband deployment, the Farm Bill needs to provide tough oversight of any taxpayer funds that are used to over build systems.
David Williams Duane Parde
Taxpayers Protection Alliance National Taxpayers Union
Tom Schatz Seton Motley
Council for Citizens Against Government Waste Less Government
Stephen DeMaura Phil Kerpen
Americans for Job Security American Commitment
Grover Norquist Jeff Mazzella
Americans for Tax Reform Center for Individual Freedom