That Farm Bill Really Stinks

This week the House Agriculture Committee voted to advance the massively expensive farm bill. Only four Republicans on the committee voted against the $957 billion boondoggle. Speaker of the House John Boehner isn’t a big fan of the bill, but could have done something to prevent it after the 2010 election, as noted at Cato.

Boehner has voted against farm bills in the past so he’s probably not eager to get this one to the floor, especially since advocates for free markets and limited government rightly consider the bill to be a disaster. But Boehner helped create this dilemma for himself when his Steering Committee gave Frank Lucas the chairman’s gavel after the 2010 elections. As Chris Edwards and I noted in a recent op-ed, Lucas is a big supporter of farm subsidies and takes pride in having been named a “Wheat Champion” by the National Association of Wheat Growers.

Right now a full vote is up in the air, and Boehner has criticized some of its “Soviet-style” elements.

“There are some good reforms in this farm bill, and there are other parts that I have concerns with,” he said when asked to elaborate on his views about the legislation. “We’ve got a Soviet-style dairy program in American today, and one of the proposals in the farm bill would actually make it worse.”

Boehner, a long-time critic of farm subsidies, added that, “having been a committee chairman, I understand the difficulty of putting together a very complicated bill.”

So, how bad is it? Really bad. It makes some teeny-tiny cuts to the food stamp program, which Democrats are mad about, but those cuts are just a drop in the bucket (more on that in a moment) and really don’t cut anything except future higher spending. The rest is just more of the same bad policy we get when Republicans and Democrats work together to spend a lot of money and try to control the economy.

Representatives Lucas and Peterson would satisfy lots of farmers’ wants if their proposed farm bill Price Loss Coverage is accepted, but not many genuine farm needs. However, those “vacation in Hawaii, Cadillac and leather seated pick up” wants of the farm lobbies would come at a potentially enormous budget deficit and taxpayer cost. For just these five commodities – corn, wheat, soybeans, peanuts, and rice, taxpayer costs would be about $16.5 billion a year, a far cry from the CBO estimate of about $3 billion a year, which assumes that crop prices will continue to be at or close to record high levels. Other substantial costs would be incurred in providing subsidies to barley, lentils, oats, peas, grain, sorghum, and oil seed crops such as canola and sunflowers. Moreover, annual subsidy payments of this size, coupled with an additional $7 to $10 billion in crop insurance subsidies, would clearly violate the United States’ WTO commitments and create enormous trade relations problems.

All in all, the House PLC program has a real potential to be both a budget and trade relations disaster. Worse, it will do so at an estimated taxpayer cost of about $16 billion a year if prices return to recent historical average levels. The new House farm subsidy proposals are likely to be more than twice as costly for taxpayers as the recently passed Senate Bill shallow loss program, which itself is a potential budget buster that would cost an estimated $6 to $7 billion a year under the same circumstance (Smith, Babcock, and Goodwin). If Congress is in fact serious about deficit reduction, then both Congress and the nation are being poorly served by this bipartisan move on the part of the current House Agricultural Committee leadership.

But it gets even worse, as Russ Vought’s post at Red State yesterday makes clear:

Consider the “farm” bill just passed out of the House Agriculture Committee.

Its $957 billion over ten years. The last farm bill in 2008 was $604 billion over ten years—a 63% increase. 80% of the bill is now food stamp funding. This is because there are now 46 million individuals on food stamps, compared with 17 million in 2000 and 30 million in 2008 respectively. 1 out of every 7 Americans are on food stamps. Chairman Frank Lucas is proposing to tweak the program to save just $16 billion or 2%. The Left is predictably freaking out. The Center on Budget and Policy Priorities claims that the, “Lucas-Peterson proposed farm bill would throw 2 to 3 million people off” food stamps. Assistant Democrat Leader James Clyburn is calling the reforms “an abomination.” This freakout will inevitably result in some compromise that is even more worthless. (Read More)

Who thinks we can afford this? The national debt is about $16 trillion and spending deficits add over a trillion dollars each year to the tally. Not only that, the Republicans who support this bill are helping President Obama in his quest to expand the welfare state. This is an abomination, just like that rotten transportation bill that recently passed.