The House (318-106) and Senate (81-15) have passed a new $300 billion farm bill by veto-proof margins this week. The bill is worse than the 2002 farm bill, which at the time was considered the most bloated and wasteful in history. President Bush should not only veto it, he should take his time in doing so. We have a feeling that the more time the public has to get to know this bill, the less they will like it.
For starters, the bill extends the direct-payment program at a time when farm incomes have reached record highs. Direct payments are government payments intended to supplement farmers’ incomes. Farmers receive these payments whether they grow anything or not. Rep. Ron Kind, a Democrat from Wisconsin, was absolutely right when he said of this provision, “It’s not a safety net — it’s an entitlement program.”
Spurred by government-mandated ethanol consumption, net farm income is up 51 percent above its ten-year average, and farm families on average are making around $90,000 a year. In light of such prosperity, the Bush administration asked Congress to cap payments to farmers with adjusted gross incomes of over $200,000 a year. But Congress wouldn’t go any lower than $2.5 million a year (when exceptions for spouses and non-farm income are taken into account). As the leading sponsors of the farm bill admit, this cap will exclude practically no one.
In addition to providing income support to millionaires, the new farm bill establishes a $3.8 billion permanent disaster-relief fund. “Permanent disaster” is a good way to describe it. The sponsors of this provision argue that this fund will prove less costly over time than allocating disaster-relief funds on an ad hoc basis once every few years, as Congress has done in the past. But this argument relies on the mistaken assumption that Congress needs to provide “disaster relief” for farmers at all. Disaster relief is nothing but a more politically palatable term for additional subsidies. If farmers can not survive bouts of bad weather by drawing upon the many government programs already available to them, including the federally funded crop-insurance program, they should find another line of work.
Wait, there’s more. With the new farm bill, Congress has accomplished the astonishing feat of making the federal sugar program even worse. Americans already pay close to twice the global average cost for sugar thanks to federal import quotas. The new bill adds a sugar buyback program, under which the federal government must purchase any “excess” sugar from domestic producers at 23 cents per pound — and then immediately resell it to ethanol producers at 2 cents per pound, with the taxpayer stuck paying the 21-cent-per-pound difference.
But perhaps the most egregious item in the new farm bill relates to international food aid. A longstanding provision governing U.S. food aid to foreign countries requires that all the food America sends abroad to be purchased from American farmers. This means that, however much we allocate toward international food aid, a chunk of the money goes toward transporting food from the U.S. to its final destination. In light of an increasing food-scarcity problem in less-developed countries, the Bush administration asked Congress to help cut down on transportation costs by allowing the food-aid program to purchase 25 percent of the food it distributes overseas from local farmers in destination countries. This would have allowed the U.S. to provide more food for starving people for same amount of money. Bowing to the American farm lobby, Congress refused.
Even though $300 billion is a big burden on American taxpayers, it’s apparently not big enough to change the political calculus of farm-subsidy supporters in Congress, as this week’s votes indicate. At this rate, Americans will be saddled with costly and inefficient farm legislation for the foreseeable future, even though only a tiny percentage of Americans benefit from these programs. To paraphrase Winston Churchill, never has Congress taken so much from so many for the benefit of so few.