By Larry Combest
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In the May 17 issue of the National Journal Daily it was reported that the Vice President’s working group had not yet settled on a plan to raise the debt ceiling while cutting federal spending, but that the group may be coalescing around even deeper cuts to U.S. farm policy.
All week there have been unofficial reports that the group’s plan may cut more than half of current U.S. farm policy, or fully one-quarter if crop insurance is unwisely cut again. In fact, the Vice President's group would reportedly cut deeper than the House GOP budget, and more than three times the level recommended by the Administration's Simpson-Bowles debt commission chair recommendation.
Moreover, these cuts, as well as the policy behind them, might be made in the debt ceiling legislation rather than by the Agriculture Committees of Congress in the context of the 2012 Farm Bill.
Meanwhile, beyond the beltway, different events are unfolding. Floods, droughts, and fires are consuming millions of acres of cropland, homes, farms, equipment, and other property, at least some of which has been caused by the federal government’s decision to blow up levees and open spillways in order to spare cities the same fate.
I am personally witnessing producers in my home State of Texas face the driest October through April since 1895 and wildfires that have destroyed more than two million acres and about $33 million worth of fencing, pipeline, and other farm assets, with the possibility that this year’s drought could actually cost Texas producers more than the staggering $4 billion in losses suffered just two years ago.
Still, there are a lot of unanswered questions.
How many millions of acres are under water? Some early estimates put the number at more than 2.2 million acres. How many acres are being or will be parched by drought? How many thousands of square miles will be prevented from planting? How many billions of dollars in crop losses will be sustained? What is the impact of this year’s flooding on the productive value of land in the future? And, what does all of this mean for thousands of farm and ranch families and U.S. jobs and the economy, generally?
Unfortunately, if reports are accurate, the debt ceiling and deficit reduction group may not care about the answers to those questions. The group may not wait before blowing up another levee – that of U.S. farm policy – that would put America’s farmers and ranchers under serious financial water (sooner for those now coping with disaster and, in a matter of time, for those who are not) while saving nothing.
Again, according to media reports, because Republicans, generally, have taken revenue off of the table and Democrats, generally, insist on excluding the big entitlement programs, the burden of deficit reduction has fallen to minor parts of the federal budget to bear and bear alone, disproportionately and, given their small share of federal funding, also quite futilely.
Farm policy, for example, accounts for about one quarter of 1% of the total budget, it has consistently come in under budget, and it has been cut 3 times in the last 6 years. Yet, what impact on the deficit has there been or will there be from such cuts when the big ticket items in the rest of the federal government do not share in cuts and, in fact, continue to grow? Let me tell you.
Farm policy has two components to it. The first part is federal crop insurance, which exists today because multiple peril insurance is not viable in the private market. Without crop insurance, producers would be expected to borrow more money in one year to produce a crop than most of us will borrow in a life time and do so without insurance. A great many producers, and certainly the young and beginning, would not be able to secure the loans needed to operate. The second part consists of the tools in the Farm Bill that help producers deal with volatile global markets caused in part by high foreign subsidies and tariffs that other countries have made clear they will not give up.
Despite claims to the contrary, neither component of U.S. farm policy is rich. The Farm Bill, in fact, is totally inadequate to stave off the kind of farm financial crisis America experienced in the latter half of both the 1980s and 1990s, the kind of crisis that will surely happen again. Meanwhile, crop insurance has become indispensable to producers – and their lenders. But, it has also been prevented from fully meeting the risk management needs of all crops and regions of the country because of Washington’s obsession to see how much funding can possibly be bled from crop insurance to pay for other things without actually bleeding it to death.
So, cutting to the chase for the new kids on the block and those who may need a refresher, based on history, this would be the impact on deficit reduction if and when these cuts take place: Washington will make deep cuts, a serious farm financial crisis will happen, Washington will wake up to the crisis and the havoc it is reaping on the economy and jobs, and then spend billions of unbudgeted dollars to stop the bleeding it could have prevented in the first place with a lot less money. In short, while the cuts will save billions on paper, they will cost billions more in practice.
So, why are some in Washington ready to repeat the same costly mistake? Besides being unwilling to tackle the big budget items, at least part of the answer may be that instead of listening to Americans under water, fighting fire, or praying for rain, not to mention the lessons of history, too many are listening to the cacophony of the well-funded political extremes who are determined to kill U.S. farm policy, a policy that supports about the only sector creating jobs, growing the economy, and contributing positively to our balance of trade which is hopelessly in deficit.
These are the same political extremes that Wellesley College Professor Robert Paarlberg recently said intentionally ignore the truth and carelessly use false arguments to get what they want. They are also the extremists that feed the media its daily dose of one-sided “news” about farm policy which, in turn, is force fed Soviet-style to the public and to policymakers in Washington as truth.
But out of all the bad news that Mother Nature has recently unleashed comes finally some good news, a very small light amidst so much darkness flickering in just two sentences in the Houston Chronicle just this week. Wrote Loren Steffy, the Chronicle’s business columnist: “In the current budget environment, farm subsidies shouldn't be immune. The parched conditions across the state, though, serve as a reminder of why the government created a safety net in the first place.”
Mr. Steffy’s message is the same one that nearly everyone in farm country has been carrying to Washington all year. On the one hand, it clearly implies that everything should be on the table when it comes to fixing our nation’s fiscal mess, including farm policy. While, on the other hand, it acknowledges that farm policy is clearly needed, as evidenced by disasters reported daily in the news but somehow missed by Washington. This has been the consistent message of Senators Stabenow and Roberts and Congressmen Lucas and Peterson.
Not all that long ago, respected journalist and long time anchor of the PBS NewsHour, Jim Leher, offered some basic rules of journalistic integrity that apply as aptly to Congress. Here is a sampling:
Do nothing I cannot defend * Cover, write and present every story with the care I would want if the story were about me * Assume there is at least one other side or version to every story * Assume the viewer is as smart and as caring and as good a person as I am * Assume the same about all people on whom I report * Carefully separate opinion and analysis from straight news stories, and clearly label everything * And, finally, I am not in the entertainment business.
I submit that if journalism, legislating, and attempts to affect that legislating all followed Jim Leher’s rules, America would be much better off and those who earnestly care about everything from deficit reduction to U.S. farm policy would have little to fear.
In the meantime, however, America’s farmers and ranchers, who are struggling against record drought, flooding, fires, and rains, may now face hostile winds from Washington as well.
Of course, before too long, other factors – such as price or production costs – will conspire with weather to create that perfect economic storm that will catch Washington off-guard and ill-equipped to handle as it has caught the city on the Potomac so many times before.
The good news is that, in these times of great crisis, Americans have always shown their hearts to a neighbor in need. And, so, I have an abiding faith, reaffirmed by history, that Americans will again step in and demand that Washington repair the great damage it has done – and that those who are responsible will each get an opportunity to face their own storm.
After all, the idea of a stable farm policy that can handle a crisis while saving taxpayers money may just be too simple for a smart town like Washington to get.
Larry Combest, a Republican from West Texas, represented the 19th District of Texas in the U.S. House of Representatives for 18 years, serving as Chairman of the Select Committee on Intelligence and the Agriculture Committee
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