Federally subsidized crop insurance is on pace to cost at least $27 billion – 57 percent – more than was promised in the last farm bill in 2008. Yet Agriculture Committee Chair Debbie Stabenow (D-MI) is trying to fend off all reasonable efforts to rein in this program’s exploding costs by arguing, “The farmer gets a bill not a check.” That red herring argument doesn’t change the fact the farmer still gets a massive subsidy.
What Sen. Stabenow conveniently overlooks is that when farmers or ranchers purchase a crop insurance policy, almost two-thirds of the “bill” is covered by taxpayers by way of an insurance premium subsidy. So while a farmer or rancher pays some cash for a policy on one of more than 120 crops in the program, he or she is only paying on average 38 percent of the actual cost while taxpayers pick up the rest.
A subsidy is a subsidy, whether it comes in a check, direct deposit, or is masked so you never see the true cost of the subsidized program. When taxpayer dollars reduce your costs, you get a subsidy.
Here are a few other programs where folks “get a bill not a check” that Sen. Stabenow’s logic would say aren’t subsidies:
- Oil and Gas Tax Breaks – Oil and gas companies can reduce their tax burden by billions using targeted tax breaks—tertiary injectants, depletion allowance, and intangible drilling costs, among others. But come April 15, they get a tax bill not a check.
- Cash for Clunkers –Taxpayers sent nearly $3 billion to car dealers who sold new cars to folks who cashed in a clunker. While their new car had up to $4,500 shaved off its sticker price, every car buyer walked out of that showroom with a bill not a check.
- Essential Air Service – For 35 years we’ve subsidized flights between rural airports, by as much as $1,905 per seat. But when one of those passengers goes to board that plane, it was with a ticket that came with a bill not a check.
- Electrical Vehicle Income Tax Credit – When car buyers purchase new electric vehicles, they are eligible to receive up to a $7,500 tax break on their income taxes. There’s more money in their pocket thanks to taxpayers, but they left the dealership with a bill not a check.
- Medicare Part D –Taxpayers spend more than $60 billion subsidizing prescription drugs for seniors as part of Medicare Part D. However, when your grandmother checks in with the pharmacist, she gets a bill not a check.
Getting a bill, not a check, is irrelevant. However you get the handout, it’s still a subsidy.
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