House panel questions Vilsack over USDA budget request

By Derrick Cain

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, March 14, 2014 - Lawmakers questioned Agriculture Secretary Tom Vilsack today on several issues related to the administration's fiscal year 2015 budget request with a strong focus on the Supplemental Nutrition Assistance Program (SNAP).

The House Appropriations Committee's Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies held a hearing to discuss the budget request, which would provide $23.7 billion in discretionary spending for USDA.

Subcommittee Chairman Robert Aderholt, R-Ala., said the request, at first glance, would “appear to be modest and straightforward.” Aderholt said the request is $228 million below the fiscal year 2014 enacted level. However, he said there are several new programs and significant increases in funding for others. Aderholt said some of these increases are offset by “questionable decreases,” such as closing 250 Farm Service Agency offices or the reduction of 815 staff years without any real background on how you arrive at this savings. He said the request includes major increases, including three new innovation institutes costing $75 million and hundreds of new staff for the Rural Development mission area.

Lets Talk Food

Further, Aderholt said the budget request proposes major changes to the crop insurance program by trimming it to the tune of $14.3 billion over 10 years. “This is clearly an authorizing issue, and the 2014 farm bill just spoke on it,” he said. “While many believe that this program could be improved, it is not realistic to pay for increases based on proposals that at a minimum have to be addressed by the authorizing committee.”

The administration has said the crop insurance program continues to be highly-subsidized and costs the government on average $9 billion a year to run, including $3 billion per year for the private insurance companies to administer and underwrite the program and $6 billion per year in premium subsidies to the farmers.

Committee Chairman Harold Rogers, R-Ky., said 86 percent of the USDA budget request is comprised of mandatory spending, mostly for SNAP. “There's only 14 percent of the budget that we can sit down and discuss,” Rogers said. “This runaway spending threatens to squeeze out all of the worthwhile programs that many of our constituents care for - from education to medical research, to housing assistance and farm loans.”

Rogers said UDSA's budget request does propose to lower both mandatory and discretionary spending, but said, “Over the last few years we have seen your artificially low estimates on mandatory spending blown up by the middle of the year. It's time to get serious about this mandatory spending problem and have an honest discussion about it. You cannot hide behind phony estimates.”

Aderholt said lawmakers are often criticized for focusing on SNAP fraud, but noted it is USDA's largest program. He said the program has an overall loss percentage of 4.07 percent per year, or about $3 billion, when fraud and erroneous payments are combined.

Vilsack said SNAP fraud is at a record low, and that the budget request seeks an increase of $12 million to reduce waste, fraud and abuse to improve the integrity of the program. Vilsack further said the error rate in the crop insurance program is 5 percent, and USDA is working to ferret out fraud there as well.

Rogers said USDA spent $104.7 billion for food stamps last year for 47 million participants. “People from the government are out there aggressively seeking to sign people up [for SNAP],” Rogers said, despite restrictions in the farm bill prohibiting SNAP recruiting.

Vilsack said there have been some states which were paying employees based on how many people they signed up for SNAP benefits, but said USDA cannot control what the states do in this regard. Overall, he said the program is “helping a substantial amount of people who are playing by the rules, and if they have more money to spend at the grocery store, they do that.”

On another issue, Aderholt asked Vilsack about the department's priorities for farm bill implementation. The secretary said the disaster assistance program for livestock producers will be rolled out before April 15. “Then, there will be a series of efforts on safety net programs, crop insurance, and nutrition programs,” Vilsack said. “You will see a significant amount of activity in 2014.”

In a rather testy exchange, Rep. Tom Latham, R-Iowa, told Vilsack many farmers do not think the USDA is “on their side” as evidenced by the department's 2012 gaffe over “Meatless Monday” and what the lawmaker said was an initial endorsement of a proposed Labor Department rule in 2012 on children working on farms. Latham also mentioned the EPA's proposed rule to lower the Renewable Fuel Standard. “There's a feeling out there that the USDA sides with the EPA and other government agencies,” Latham said.

Vilsack said he did not know what farmers Latham has spoken with and said, “That's just not true.”

Vilsack's appearance before the subcommittee came about a week after USDA's Office of Inspector General Phyllis Fong told lawmakers in a hearing that while recent progress has been made in addressing waste, fraud, and abuse among programs administered by the department's agencies, more attention needs to be paid to oversight in most USDA agencies.

A summary of the USDA budget request can be viewed here.

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