Eliminating federal waste means swimming upstream

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Advocates for fiscal responsibility often find, when it comes to killing even the most wasteful and unnecessary programs, they must swim upstream. As a case in point, consider the U.S. Department of Agriculture’s (USDA) catfish-inspection program, which was established in 2008 but implemented just this spring.

Since catfish already are inspected by the Food and Drug Administration (FDA) at much lower cost, the USDA program — which cost taxpayers $19.9 million to establish and will cost $14 million annually to maintain — is utterly superfluous. It has been identified as wasteful by the Government Accountability Office (GAO) no fewer than 10 times. Efforts to repeal the program also have been endorsed by a broad coalition of free-market groups and taxpayer advocates, as well as a bipartisan group of 180 members of Congress. As Rep. Vicky Hartzler, R-Mo., put it, the USDA catfish inspection program is “the poster child of duplicative and wasteful programs here in Washington.”

But despite years of well-organized efforts to end it, the USDA program has been impossible to kill. In May, the Senate passed SJR 28, a resolution authored by John McCain, R-Ariz., that would nullify the program. But House Republican leadership still has not brought the bill to the floor or indicated that it will get a vote. As the working days before congressional recess dwindle down to zero, the prospects for the resolution passing the House look increasingly slim.

To be clear, there’s not a ton of money at stake here. With an $18 trillion national debt, $14 million a year (and some estimates suggest it would cost even less) is barely a drop in the bucket. But that’s exactly why lack of movement on McCain’s catfish-inspection resolution is so troubling. The USDA catfish program is seen by many as the lowest-hanging fruit for budget cuts. It’s so egregiously wasteful and duplicative that its elimination should be a no-brainer, especially for politicians who claim to be fiscal conservatives. The fact that it has been so difficult to eliminate, despite widespread support, bodes ill for future reform at a time when budget cuts have never been more important, especially when it comes to the farm bill.

For those who follow U.S. agriculture policy, it will come as no surprise that the wasteful USDA program was borne out of the 2008 and 2014 farm bills. As my R Street colleague Lori Sanders has written, the farm bill long has represented the absolute worst in American politics. The latest version, crafted in House and Senate agriculture committees packed with farm-state politicians and heavily influenced by lobbyists, is 959 pages and was projected to cost $956 billion over 10 years. The evidence thus far suggests that some of its programs are coming in well over budget and it’s likely to cost taxpayers even more.

Sen. Thad Cochran, R-Miss., who hails from the nation’s top catfish producing state, first proposed granting the USDA authority to inspect catfish by dropping it into the 2008 farm bill. Under the guise of consumer safety, the USDA program effectively enacts a trade barrier that protects U.S. catfish farmers from foreign competition by forcing imported catfish to undergo restrictive inspections. Cochran and a coalition of predominantly Southern politicians have rebuffed repeated attempts to eliminate the program and were again successful in preserving it with the 2014 farm bill.

When it comes to cronyist, wasteful farm-bill programs, the USDA catfish inspection program is just the tip of the iceberg. Perhaps the biggest farm bill boondoggle of all is the massive expansion of federally funded crop-insurance premiums ushered in with the 2014 farm bill. Although our federal crop-insurance program is ostensibly intended to serve as a safety net for vulnerable farms in the event of droughts or bad harvests, it has been turned into a means for farmers (especially major agribusinesses) to boost their incomes, rather than a risk-management program for farms struggling to stay afloat.

The government currently subsidizes farmers’ crop-insurance premiums at an average rate of 62 percent, regardless of the size of the farm operation. Since there is no means test or payment limit on the amount of support a farm can receive, the majority of support flows to the largest farm businesses. As the list of covered crops continues to grow and farmers continue to overinsure, taxpayers are put at risk needlessly.

Here too, there are simple fixes that could greatly reduce taxpayer liability and save millions or more. For example, the Assisting Family Farms through Insurance Reform Measures (AFFIRM Act)—introduced in 2015 in the House by Reps. Ron Kind, D-Wis., and Jim Sensenbrenner, R-Wis., and in the Senate by Sens. Jeff Flake, R-Ariz., and Jeanne Shaheen, D-N.H.—would subject crop-insurance-premium subsidies to a means test, enact payment limits and mandate increased transparency. These reforms are estimated to save taxpayers more than $24.5 billion over 10 years.

Such changes would place a much-needed scope on our farm-support system without threatening the viability of farms. A recent study for R Street by economist Vincent Smith found that a $50,000 cap on premium-subsidy support would affect only 9 percent of farms, almost all of whom have annual market sales of significantly more than $750,000. But as usual, when it comes to U.S. agriculture politics, entrenched political interests are likely to get in the way of commonsense reforms.

Few sectors of the U.S. economy are subject to as much government manipulation and micromanaging as agriculture. If we ever want to rein in spending and bring accountability to our federal system of farm supports, we’re going to have to make tough decisions. Slashing the duplicative and wasteful USDA catfish inspection program should be an easy one.

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