The House farm bill is crony capitalism on steroids

The House farm bill is crony capitalism on steroids
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In a temporary win for taxpayers, Republicans failed on May 25 to come up with the votes to pass the massive farm bill on that would have set the rules and practices for American agriculture for the next five years. The House bill was full of sweetheart deals, special carveouts for multimillionaires and billionaires, and ushered in no free market reforms.

According to the Congressional Budget Office, the farm bill will cost $868 billion over the next 10 years. Instead of reining in out-of-control subsidy programs and closing special interest loopholes, the legislation preserves Depression-era giveaway programs and dismisses opportunities to pass free-market reforms to modernize the nation’s agriculture industry.

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Most of the amendments offered by fiscal conservatives were denied floor consideration, and the few that were allowed suffered defeat at the hands of the big spenders. For example, a bipartisan amendment that would have reformed the egregious sugar program, which benefits sugar producers by guaranteeing them a minimum price for the commodity, limits imports, and punishes end-users of sugar, like bakers and candy makers, who pay more for their most basic raw material and then pass those costs on to consumers. Taxpayers also foot the bill for excess sugar production.

 

The one bright spot in the bill was the inclusion of work requirements for the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP), which makes up 80 percent of the overall cost of the farm bill.

Since the entire Democratic caucus washed its hands of the farm bill early in the process in opposition to the relatively modest SNAP work provisions, the 30 Republicans who defied their leadership in giving it thumbs down ensured its defeat by a final vote of 213-198.

However, many of these Republicans were not all disturbed by the cost of the bill; they were using their no votes to pressure House leadership into holding a vote on an immigration bill.

House leadership has indicated that it intends to take up the bill again, since current law expires on September 30, 2018. Given the size and scope of the House version, taxpayers should be looking to the Senate for some assistance in shifting the status quo. 

Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyFive things to know about Bruce Ohr, the DOJ official under fire from Trump Democrats question if Kavanaugh lied about work on terrorism policy The Hill's Morning Report: Dems have a majority in the Senate (this week) MORE (R-Iowa) has signaled his disgust at the travesty that was crafted by House Agriculture Committee leadership, tweeting on May 24, 2018, “Rep Conaway says I’m wrong about farm bill payment limits but he should tell this farmer why I’m wrong about limiting farm subsidies to FARMERS not WALL ST BANKERS living high on the hog Farm subsidies meant as a safety net for farmers w dirt under their nails.”

According to the USDA, more than half of America’s cropland is rented, compared with a little more than 25 percent of pastureland. Half of farmland that produce grains — like rice, corn, soybeans, wheat, and cotton — is rented. Non-operator landlords, such as hedge funds and multinational corporations, own 80 percent of this rented farmland. Since crop insurance is not means-tested, these wealthy landowners are eligible for this program, which creates perverse incentives for them to buy even more farmland to obtain more taxpayer-subsidized insurance. 

While there is an adjusted gross income limit of $900,000 for individual farmers and $1.8 million for couples to received farm subsidies through the Price Loss Coverage (PLC) or Agriculture Risk Coverage (ARC) Programs, this modest constraint would be obliterated if the House farm bill is enacted. The legislation would exempt from the income limits all “pass-through entities,” like partnerships, joint ventures, and limited liability corporations. This huge loophole would allow anyone or any corporation with a farm or farm partnership and an annual income above the income limits to simply reorganize as a pass-through entity, essentially rendering the cap null and void. 

Due to the expanded definition in the House bill of who constitutes a “farmer,” many more relatives of farmers would become eligible for subsidies of up to $125,000 annually per person, even if they do not live in the same state as the farm. Cousins, nieces, and nephews could receive government payment as long as they claim to have checked in with the operation at least once a month; a farmer in Nebraska could have a cousin in New York City who would be eligible for $125,000 a year from taxpayers, as long as he or she documented the occasional call.

Farmland is not swampland, but the farm bill is another example of why the Washington swamp still needs to be drained.

Leslie Paige is is the vice president for policy and communications at Citizens Against Government Waste, a nonprofit group that advocates for limited government.