Congress Should Keep its Promises to Taxpayers in the Next Farm Bill12/20/2017
Taxpayers are quite familiar with broken promises in the nation’s capital. Every so often, an opportunity arises for a course correction in an area of federal spending that will provide savings and change longstanding, outdated programs.
One such chance will arise in the near future. The farm bill, which is reauthorized approximately every five years, funds everything from school lunches to agricultural commodities. It is scheduled to be renegotiated in 2018. Three of the most critical policies in need of reform are the anachronous sugar program, double dipping in crop insurance programs, and reforming the Supplemental Nutrition Assistance Program (SNAP) program, which comprised 80 percent of the total cost of the last farm bill.
America’s sugar program, comprised of import quotas, loans, marketing allotments, price supports and tariffs, is the most convoluted and highly-controlled agricultural commodity program. According to the Sugar Reform Coalition, the sugar program costs U.S. consumers $3 billion annually in the form of higher prices for the food, drinks, and snacks. Between 2013 and 2014, taxpayers were forced to pay more than $250 million to bail out the sugar industry. A 2006 International Trade Administration report stated, “Employment in sugar containing products industries decreased by more than 10,000 jobs between 1997 and 2002 according to the Bureau of Labor Statistics.”
The sugar program benefits a handful of influential special interests, who have argued for decades that removing the government’s sweet deal for sugar would lead to its demise. But the government’s own analysis has shown that the industry would continue to produce sugar economically while increasing imports from foreign suppliers, lowering the costs to any industry that uses sugar in manufacturing and also to American consumers.
The program has also become a hindrance to lowering foreign trade barriers to American exporters. Sugar quotas continue to be brought up by U.S. trading partners as being inconsistent with the Trump administration’s demands for more fair trade abroad. Sugar policy liberalization by the United States would strengthen the administration’s hand in negotiations to request similar actions by other countries.
American farmers have long enjoyed taxpayer-subsidized revenue protection through the federal crop insurance program. In the 2014 farm bill, Congress eliminated a direct payment program for farmers and instituted two new safety net programs, Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC), which are triggered if prices or crop yields are lower than expected. Farmers can participate in either PLC or ARC, as well as the crop insurance program.
For the 2014 and 2015 growing seasons, the PLC program paid out $2.7 billion and the ARC program paid out $10.4 billion. The revenue-based crop insurance program paid out an additional $10.7 billion for the same crops that received PLC and ARC payments during those same years. Hundreds of thousands of farmers unfairly benefitted in 2014 and 2015 by double dipping in either the PLC or ARC and the crop insurance program. The Environmental Working Group estimated in a recent report that the double dipping cost taxpayers $23.9 billion over two years in 2014 and 2015.
The SNAP program, better known as food stamps, has experienced explosive growth over the past decade, along with the rampant waste, fraud, and abuse that accompanies such expansion. In fiscal 2006, SNAP benefits were provided to 26.5 million recipients at a cost of $32.9 billion. In fiscal 2016, SNAP enrollment had ballooned to 44 million people at a cost of $71 billion.
The U.S. Department of Agriculture (USDA) and the states, which jointly administer SNAP, have been cited numerous times by the Government Accountability Office for their ineffective anti-fraud efforts and weak oversight. The SNAP program is listed as one of the “high-priority programs” for improper payments by the Office of Management and Budget. It is the only one of the 18 high-priority programs without up-to-date information on improper payments and the improper payment rate.
It is time for Congress to closely examine the SNAP program with an eye toward reining in abuses, demanding that the states do more to verify eligibility and enforce work requirements, reform the program to ensure that SNAP benefits reach the truly needy, and force the USDA to provide current improper payment information.
Over many decades, authors of successive farm bills have proudly trumpeted what sounded like courageous reform and substantial savings to taxpayers. In each of those bills, not only were the projected savings a sham, the legislation has ended up costing taxpayers many billions more. This kind of fiscal bait and switch cannot continue. Taxpayers deserve real and meaningful reform in next year’s farm bill, not more broken promises.
Source: The Hill