When it comes to reforming government subsidies for agriculture, there’s good news and not-so-good news. The good news is that the agriculture lobby seems to “get it” that the days of ever-expanding federal spending are over. The not-so-good news is that Paul Ryan missed an opportunity to strongly reinforce this in his 2012 budget. Ryan’s stance looks especially flabby when contrasted to his bold plans to remake Medicare and Medicaid.
Ryan bases his argument for Medicare and Medicaid changes on concerns for the exploding federal debt, its economic impact on all Americans, and the need to preserve programs for the future — a rationale that seeks a greater intrinsic good. But he doesn’t extend this rationale to the agriculture sector. There, his stance is conditional: federal ag spending needs to be reduced due to current high commodity prices. The implication is when conditions change and prices drop (as they will), federal spending will go up.
Why does Ryan believe that major changes to the social safety net (for seniors, the disabled, and the poor) are absolutely necessary, but major changes to the agribusiness safety net are not?
Although Ryan’s budget proposal has some vague ideas to curb agriculture spending, he bows to the chairman of the House Agriculture Committee to implement reductions. But his proposal exhibits no such deference when it comes to tax reform. Nowhere in his detailed tax prescriptions does he acknowledge the crucial role of the chairman of the House Ways and Means Committee, which has constitutional authority over tax legislation.
Tellingly, the House Ag chairman (Frank Lucas, R-OK) swats away Ryan’s ideas as “simply suggestions” and reminds us that he, not Ryan, will be writing next year’s farm bill. This is how congressional chairmen mark their territory.
Perhaps Ryan is punting on the issue for now, waiting for next year. That’s when he will set the top level of ag spending for the next four or five years. Thus, when Lucas writes his farm bill, he must control spending to fit within Ryan’s budget caps. Will Ryan take a bold stance to reform the ag safety net in 2012, or will he repeat this year’s lukewarm, deferential performance?
Ryan should consider that the American Farm Bureau, one of the most powerful voices in agriculture, acknowledges that deep cuts in agriculture spending are coming and that “increasing the cost of the [next] farm bill is not an option.”
This represents a significant break from the strategy the AFB has pursued in the past: using the current farm bill as the baseline to increase spending in the next one. Traditionally, basic commodity producers (wheat, cotton, etc.) have fought to expand their federal benefits, while others (fruit and veggie producers) have fought to get access to similar benefits. Back in the drunken-sailor-spending days, the congressional agriculture committees had money for all. Now we can expect a fight among various crop producers for a seat in the farm bill’s lifeboat.
The Farm Bureau’s message recognizes the inevitability of cuts, while stating that the ag sector should bear no more than its “fair share” of cuts. But does the AFB know that the inevitability/fair-share argument ranks first on Michael Kinsley’s handy list of reasons lobbyists use to fight cuts? Or that AFB’s statement that ag spending is “only” two percent of the federal budget is reason number four in Kinsley’s playbook? (News flash: two percent of something gigantic is still enormous. Wouldn’t you like to have just two percent of Bill Gates’s income?)
About that “fair share” thing: what, indeed, is fair? Should agribusiness subsidies be subject to equal or smaller percentage cuts than, say, cancer research? That, in a nutshell, is the question that Paul Ryan avoided this year, but he must answer it next year.
Joanne Butler is a senior economics fellow at the Caesar Rodney Institute of Delaware. You can email her at joanne-butler@comcast.net.