WASHINGTON, DC - MARCH 12: U.S. President Barack Obama is accompanied by Sergeant at Arms of the United States Senate Terrance Gainer as he arrives for a meeting with members of the Senate Democatic Caucus in the Mansfield Room at the U.S. Capitol March 12, 2013 in Washington, DC. With tax reform, spending cuts, gun control and immigration on the agenda, Obama will be holding four meetings over three days this week with Republican and Democratic members of Congress at the U.S. Capitol. (Credit: Getty Images)
This column is part of our ongoing This Week in Washington Contribution Series
This week, both houses of congress will begin the markup of a $1 trillion food stamp/farm bill. The Senate Judiciary Committee is also expected to pass the amnesty bill out of committee. The irony is that while farms enjoy record incomes, they are pushing for more subsidies and more cheap labor. While Congress is heeding the calls of the parochial interest, we must ensure that they hear from We the People.
Farm/Food Stamp Bill - It’s that time of year again. After extending the 2008 farm bill for an additional year last September, both houses of Congress are set to take up new 5-year farm bills in their respective Ag committees. Unfortunately, instead of fostering a free market agriculture industry, Congress has encouraged decades’ worth of direct subsidies, crop insurance, conservation subsidies, marketing loans, disaster aid, trade barriers, commodity price supports, and production controls.
The last 5-year farm bill contained a total price tag of $604 billion when extrapolated over 10 years. Due to the massive growth in food stamps, which accounts for 80% of the farm bill, the new CBO baseline for the farm bill is $992 billion, with $772 billion allocated for domestic nutrition assistance programs, and the rest, about $223 billion, divided among various agriculture-related programs. On Tuesday, the Senate will be marking up the new 5-year bill (S.10), which locks in the food stamp baseline and replaces direct farm subsidies with an array of new market distorting price target and “shallow loss” crop insurance. The total cost is about $969 billion, a massive expansion from $604 billion, yet they are scoring this as a spending cut because it chips off a few billion in farm subsidies from the baseline. Only in Washington!
The House version, which will be marked up on Wednesday, is only slightly better. It will cost about $952 billion with most of the extra “savings” coming from the $6 billion sequester cuts and slower baseline growth of food stamp spending. However, the farm subsidies are roughly the same or even worse than the Senate bill in some instances.
- Food Stamps: One of the most appalling figures of Obama’s welfare state is the growth of the Food Stamp program. Since 2007, enrollment in food stamps has jumped from 27 million to 47.7 million, with the cost doubling to over $80 billion. The mandatory authority for the program is housed in the 5-year farm bill. This bill does nothing to reform the program, limit its growth, prevent corruption and dependency, and devolve authority to the states. At a minimum, the program needs to be decoupled from the mandatory spending in the farm bill, and subjected to the annual appropriations process.
- New “Shallow Loss” Program: Supporters of the Farm bill are touting the fact that the bill eliminates the $5 billion in annual direct subsidies to farmers. The problem is that the Senate bill creates a new program, Agriculture Risk Coverage (ARC) plan, which extends the coverage of crop insurance from catastrophic benefits to a guarantee of 90% of the farmer’s annual revenue. The idea that the government could guarantee members of a specific profession 90% of their income, especially when food prices are so high, is an anathema to our system of free enterprise. Moreover, a study published last year by the American Enterprise Institute found that the program will ultimately cost taxpayers more than the direct subsidies that are being replaced. In addition, this bill does nothing to reform the existing crop insurance program in which the federal government subsidizes 60% of the premium with no caps on total costs of the policy.
- Target Price Program: The House bill will offer farmers a choice between a target price program and the shallow loss crop insurance. Under the target price regime, farmers would collect revenue losses when prices for corn, rice, peanuts, wheat, and barley dip below that target for at least two years. The target prices that trigger subsidies for grain and oilseeds farmers will be raised by 40%. The shallow loss program would “only” guarantee up to 85% of the farmer’s income, instead of 90% prescribed in the Senate bill. In a concession to southern farmers, as proposed by Ranking Member Thad Cochran, the Senate bill now contains a target price program for rice and peanut farmers, albeit at slightly lower levels than the Senate bill. The senate bill sets the rates at $13.30 per 100 pounds for rice and $523.77 per ton for peanuts. The House version sets prices at $14 per 100 pounds for rice and $535 per ton for peanuts.
Remember, all of this is coming in the wake of record incomes for farmers.
Immigration – Last week, the Senate Judiciary Committee voted on a number of enforcement amendments to the amnesty bill (S. 744). Every Democrat along with Jeff Flake and Lindsey Graham voted down all of the efforts to ensure that the enforcement measures are implemented before any legalization goes into effect. It is clear that the bill will pass the committee on Tuesday when they finish dispatching with all the amendments. Once the bill heads to the floor, presumably in June, we will witness the same dynamic. Republicans will propose stronger enforcement triggers; senators like Marco Rubio will vote for them knowing that they will be voted down along party lines; they will then vote to pass the final bill.
It is time for conservatives to start demanding answers from their Republican senators. All but a few Republicans have been ambivalent about this bill. Now that Democrats have made it clear they will oppose all efforts to strengthen the enforcement, it’s time for Mitch McConnell and other Republican leaders to publically take a stand on the bill. Concurrently, we must begin pressing House leaders and House Judiciary Committee members to begin taking a strong stance against the bill while pushing a security-first agenda – one that prioritizes border security and an overhaul of our visa tracking system, especially from countries that represent a security risk.
Obamacare – On Thursday, the House will vote to repeal Obamacare for the first time this session. Conservatives must remind leadership that they need to fulfill their promise of using the debt ceiling to chart a course towards a balanced budget. That will necessarily force them to use that leverage point to repeal Obamacare. It is nice to reaffirm the commitment to full repeal in symbolic votes, but the debt ceiling is where that symbolism turns into action. That will be the last time to get rid of the law before its incorrigible dependency and unsustainable inflationary effect begins to set in.
Read more at The Madison Project