Time to cut strings of puppeteers
The Obama administration has been touting what it says are the dire consequences of the budget sequestration required under the terms of the Budget Control Act of 2011. It wants to put pressure on Republicans in the House of Representatives to agree to additional tax increases to spare constituents the pain of responsible spending.
The Department of Agriculture seems to have found a way to possibly pull the intended cord. Its latest announcement demonstrates the danger to agriculture in depending on government largesse.
The Budget Control Act gave Congress six months to make reasoned, targeted cuts to save $2.5 trillion over 10 years. Congress failed and now the act requires across-the-board cuts in all but entitlement programs.
In reality, the "cuts" are reductions in projected increases in spending. The USDA's share of the sequester is $2.5 billion through the remainder of the fiscal year, which ends Sept. 30. The department was budgeted to spend $147 billion this fiscal year, but is on track to spend $155 billion.
If the targeted reductions are realized, the sequestration will result in USDA going only $5 billion over budget instead of $8 billion. That's fiscal constraint and sacrifice as defined only by Washington.
The USDA has tried without much success to make farmers, and by proxy their representatives, feel the pain.
First came an announcement that meat inspectors would be furloughed -- as quickly as negotiations with the inspectors' union would allow. Congress quickly scotched that in a subsequent deal to keep the government funded through September.
But now the USDA has announced a reduction in direct payments, the subsidy producers of certain crops receive annually, regardless of current market prices, based on historical yields. The payments help growers of the big program crops -- corn, soybeans, wheat, rice and cotton -- secure operating loans.
The department says it was going to cut direct payments by 5.1 percent. But some 350,000 farmers have already received $151 million from other subsidy programs. Rather than try to claw back money that has probably already been spent, USDA spokesmen say it's easier and cheaper to instead make an 8.5 percent cut in direct payments.
This extra levy is sure to make grain farmers howl, particularly Midwestern corn and soybean growers now preparing for planting. By coincidence they are largely represented by Republicans in the House of Representatives.
Congress is under deadline to produce a new farm bill this fall. Versions that passed in the full Senate and in the House Ag Committee last year called for the elimination of the direct payment program in favor of an expanded risk management program.
We still think that's a good first step, and hope eventually to see the federal government's financial role in agriculture greatly diminished.
As it suits their purpose, politicians of all stripes are happy to have farmers dancing at the ends of the strings attached to government payments. Farmers would do well to wrest control of their movements from the puppeteers.