After repeated delays, unexpected clerical missteps, and two presidential vetoes, the 2007 Farm Bill became law in June. The previous Farm Bill was passed in 2002.
Reforming federal agricultural policies has long been a goal of fiscal conservatives, and policy experts had hoped record-high commodity prices would provide room for significant reductions in Depression-era price support programs. U.S. Department of Agriculture (USDA) officials and taxpayer groups seized the opportunity and in 2005 began to lay the groundwork for change.
However, Congressional Democrats, joined by many Republicans, plowed down the seedlings of reform and passed a Farm Bill that perpetuates wasteful crop subsidies and doles out funds to interests that have little or nothing to do with agricultural production.
President George W. Bush vetoed the first Farm Bill to come out of Congress this year. That veto was overridden, but the version he had been sent by House and Senate clerks was missing a section devoted to trade and foreign aid. That mistake threw the validity of the “Round One” Farm Bill into question, and the Democratic leadership rushed a “Round Two” version through Congress.
Bush issued another veto, but it, too, was overridden. Ninety-nine House and 35 Senate Republicans voted with Democrats to override the veto.
Enormous Handouts
The new Farm Bill mandates spending roughly $290 billion over five years. Some critics have pointed to budgetary gimmicks that hide an extra $10 billion in outlays. Although income eligibility limits for subsidy payments were tightened, the bill allows millionaire couples to continue receiving government handouts under certain conditions.
The package includes provisions deliberately intended to keep prices high for certain products, including sugar and dairy. Subsidies for wheat and soybeans will increase even though their market prices have gone up 256 percent and 164 percent, respectively, since 2002.
The bill also would extend for two years the tariff on imported ethanol, which opponents say will further distort trade in a product that is already driving up corn prices.
Funding for the Food Stamp program, which critics faulted for $1.8 billion in improper payments last year, was boosted. Conservation spending also was increased, with $1.3 billion authorized for a new program to keep wetlands wet. Big Labor got a slice too, in money for union organizers to recruit at renewable energy firms.
More Questionable Spending
The missing section of the first bill contained so much questionable spending that 26 taxpayer groups sent a letter to Congress on June 2 expressing their strong reservations. The provisions included $200 million for corporations to market their products abroad and a $60 million contribution to a doomsday “seed bank” in Norway.
The letter asked members of Congress to “demonstrate a small semblance of fiscal responsibility [by voting] against Title III should it come to the floor for consideration.”
One small bright spot for fiscal conservatives during final negotiations was the removal from an earlier version of the bill of a $4 billion tax hike on manufacturers.
Rejected Reforms
Committee and floor attempts to overhaul the Farm Bill were largely rejected. A comprehensive alternative offered by Rep. Ron Kind (D-WI) and Rep. Jeff Flake (R-AZ) would have reduced the deficit by $2 billion over five years and by $10 billion over 10 years.
While the Kind-Flake plan would have reapportioned some spending among programs whose merits have been questioned, many taxpayer groups supported it because of genuine savings dedicated to taxpayers and the gradual removal of subsidies.
The bill was defeated by a vote of 309 to 117, and a similar Senate plan sponsored by Sen. Frank Lautenberg (D-NJ) and Sen. Richard Lugar (R-IN) went down 37 to 58.
Fiscal conservatives were pleased to note the president’s strong stance against the bloated measure, especially because his support of a swollen 2002 package didn’t follow the path set by the more market-oriented 1996 “Freedom to Farm” Bill.
Persuasive Money
Political commentators noted a yes vote for the Farm Bill was a vote with House Speaker Nancy Pelosi (D-CA), who was eager to reach out to rural voters in an election year. So far in 2008, agribusiness has donated nearly $31 million to Congressional candidates, with 43 percent going to Democrats. In 2006 and 2004, respectively, 31 percent and 29 percent of agribusiness contributions went to Democrats.
The House Republican Caucus was split, with House Minority Leader John Boehner (R-OH) spearheading opposition to the Farm Bill. House Minority Whip Roy Blunt (R-MO) was on the other side of the fight, supporting the bill.
Many of the Republicans who supported the measure admitted specific provisions meant to aid their state or district ultimately tipped the scales. The Farm Bill has often been cited as a textbook example of the “iron triangle” where outside interests, committees of jurisdiction, and bureaucrats combine to push legislation with “something for everyone.”
Possible Backlash
It is unclear whether that “bring home the bacon” mentality will help carry candidates through the 2008 election.
Soon after the Farm Bill clerical bungle, California state Sen. Tom McClintock (R-Thousand Oaks) defeated former Congressman Doug Ose in the Republican primary for an open congressional seat in an agricultural district by a 54-39 margin, in part due to McClintock’s public rejection of pork-laden legislation.
Taxpayers will carry a doubly heavy burden under the new Farm Bill–once via their taxes and again through higher food and fuel prices. If a public backlash against wasteful federal spending occurs at the polls this fall, it’s possible future national farm policies will be more fiscally responsible.
Kristina Rasmussen ([email protected]) is director of government affairs for the National Taxpayers Union.
