February
1, 2002, 8:00 a.m. Deere
Me
Congress
is farming out the cash.
an
is the only animal that blushes. Or needs to."
— Pudd'nhead Wilson's New Calendar
Mark Twain once referred
to Congress as America's only native criminal class. This year, those natives
will make major decisions affecting the farm economy. Everyone who relies
on the health of agriculture will feel the impact of these decisions.
Farmers, and those
who feed off them, can look forward to several years of record incomes
— but not because of high grain and livestock prices, which are well
off their 1995-96 highs. Many industries are unstable, but get no federal
help. No one is suggesting that we bail out the dot-coms, for example.
But farmers are exceptionally well organized politically, and this fall
are pivotal players in the struggle to determine who will win the mid-term
congressional elections.
By custom, Congress
decides baseline farm subsidies every five to seven years during
consideration of "the farm bill." The 1996 farm bill expires
this year. The House, which passed its renewal version in October 2001,
wants to legislate a ten-year package. Currently, Senate Democrats are
trying to muscle their version through the Senate floor and have included
a five-year provision in it. Both the House and Senate, however, want
to lavish $17 billion a year of taxpayer subsidies on farmers. This represents
a $10 billion annual increase from the $7 billion levels that prevailed
during the mid 1990s and an incredible 70% increase from the Congressional
Budget Office baseline projection of $10 billion a year if the old farm
bill were simply extended.
To evaluate the significance
of this $17 billion in sustained annual federal subsidies, it's important
to remember that total farm receipts, which include all livestock, vegetables,
grain, and dairy products, amount to about $200 billion a year, and non-subsidized
profits in 2000 of about $23 billion annually. In 2000, analysts calculate
federal bailouts boosted farmers' incomes by more than 75%. Wow.
Despite President
Bush's extraordinary popularity, the administration has been completely
ineffective in trying to stop this budget hemorrhage. Specifically, Agriculture
Secretary Ann Veneman publicly backed an alternative approach championed
by Senators Cochran (R., Miss.) and Roberts (R., Kan.). Their cheaper
plan would raise somewhat-direct subsidies to farmers unrelated to output,
keep target "non-recourse loan" prices for grains where they
are, and establish farmer savings accounts managed by the Agriculture
Department, with the government matching deposited funds.
This plan died in
the Senate Agriculture Committee on a 9 to 11 vote on November 14. It
died again on the Senate floor last month. The administration's only chance
is for the Senate GOP to continue its filibuster, then demand reforms
similar to Cochran-Roberts as its price for relenting.
But the odds of this
happening do not appear terribly high. Instead, Bush is widely expected
to sign any bill that reaches his desk, probably by April Fool's Day.
Pudd'nhead, where
have you gone when we need you most?
— Stuart
J. Sweet is president of Capitol Analysts Network, a political risk-management
firm based in Chevy Chase, Md.
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an
is the only animal that blushes. Or needs to."
