U.S. Senate misses chance to help taxpayers, environment with Farm Bill vote
WASHINGTON (June 21, 2012) – The R Street Institute today expressed its disappointment that the U.S. Senate has voted to approve S. 3240, a $969 billion boondoggle commonly known as the “Farm Bill.”
While touted by sponsor Sen. Debbie Stabenow, D-Mich., for its $23 billion in alleged budget savings, the Senate version of the 2012 Farm Bill is actually 60 percent larger than its 2008 predecessor. The measure does manage to cut $50 billion in wasteful direct payments to agricultural producers, but it redirects most of that money — some $35 billion — into new so-called “shallow loss” insurance programs that amount to a massive new agricultural entitlement.
“The shallow loss programs included in the Senate bill guarantee agricultural producers protection from even modest dips in their income,” R Street Public Affairs Director R.J. Lehmann said. “Even though most of the benefit will accrue to the largest and wealthiest farms, in most cases, no premium will be charged for this coverage, which encourages development of those lands most prone to suffer flooding and erosion. Because the coverage protects against drops in what are currently record-high commodity prices, it also could end up costing several times what the Congressional Budget Office projects.”
The bill also expands existing crop insurance programs, whose premiums are roughly 60 percent subsidized by the federal government and are now projected to cost $95 billion over the next decade. Senate leadership refused to even hear an amendment proposed by Sen. Jeanne Shaheen, D-N.H., and Sen. Pat Toomey, R-Pa., that would have capped crop insurance subsidies to any particular producer at $40,000 annually, the same cap that was used for direct payments. The Government Accountability Office projected adopting that amendment would save $1 billion a year.
The Senate also rejected an amendment from Sen. Kirsten Gillibrand, D-N.Y., that would have capped at $825 million annually federal subsidies to private crop insurers to sell and service policies, a plan that would save roughly $5 billion over the next decade. However, in one of the few bits of good news, the Senate did approve an amendment from Senate Majority Whip Dick Durbin, D-Ill., and Sen. Tom Coburn, R-Okla., that would cut crop insurance insurance subsidies by 15% for agricultural producers with adjusted gross incomes of more than $750,000. The change is estimated to save roughly $1 billion over the next decade.
“Despite the unified efforts of environmentalists, consumer groups, taxpayer advocates and free-market economists to educate the Senate about the pitfalls of this Farm Bill, the Senate was able to find just $23 billion in cuts from a $1 trillion piece of legislation, falling far short of even the White House’s modest targets for budget savings,” Lehmann said. “We can only hope their colleagues in the U.S. House take more seriously the blatantly obvious problems of subsidizing risk, bilking the taxpayer and hurting the environment all at the same time.”
