Oppose Any Fiscal Cliff Farm Bill Deal: Farm Bill is Filled with Fake Savings that Plant Seeds for Future Deficits
November 29, 2012
Dear Member of Congress:
Neither the $969 billion Agriculture Reform, Food, and Jobs Act nor the $957 billion Federal Agriculture Reform and Risk Management Act (FARRM) take credible steps toward changing legislative business as usual that brought taxpayers this fiscal crisis. Even adjusted for inflation the House and Senate bills authorize nearly 50 percent more spending than the last farm bill passed merely four years ago. While both bills finally end the discredited direct payments program, they tap much of the savings to create new open-ended “shallow loss” entitlement programs that force taxpayers to pay agricultural businesses that see as little as a five percent loss in expected revenue. And both bills actually increase spending on the costliest taxpayer support for agriculture, federally subsidized crop insurance, through such special interest handouts as popcorn, peanut revenue, and catfish margin insurance policies.
No program embodies the inability of Congress to predict agricultural markets better than taxpayer-subsidized crop insurance. After passage of the 2008 farm bill, CBO projected crop insurance to cost taxpayers $47 billion over ten years. When all the claims are finalized this year, taxpayers will have easily spent more than half this amount in 2011 and 2012 alone. Newly proposed shallow loss subsidies will only make the situation worse.
Congressional inaction on our nation’s budget challenges has directly led to the impending fiscal cliff. While sequestration’s across-the-board budget cuts are a terrible fiscal tool, enactment of legislation with CBO scored savings but no chance of real-world realization is an even worse remedy.