President Trump is proposing to slash crop insurance and other farm programs by $47 billion over 10 years and to dramatically overhaul the Supplemental Nutrition Assistance Program, eventually shrinking its cost to taxpayers by one-third.
The proposals will be dead on arrival in the House and Senate Agriculture committees but they would provide ammunition to farm bill critics on the right and left who would like to reduce nutrition assistance and farm subsidies.
A summary of the fiscal 2019 budget’s proposed cuts says the plan, released today, would “maintain a strong safety-net for farmers while achieving savings by eliminating subsidies to higher income farmers, reducing overly generous crop insurance subsidies to producers and companies, and by eliminating some programs that have no federal purpose.”
The budget would save $22 billion over 10 years, nearly half of the farm program cut, by reducing crop insurance premium subsidies from the current average of 62 percent to a “more reasonable” 48 percent. Underwriting gains to insurance companies would be capped at 12 percent, saving another $3 billion over 10 years.
Trump also proposes a means test that would eliminate not just premium subsidies but also commodity payments and conservation benefits to farmers who have adjusted gross incomes of more than $500,000. According to the USDA budget summary, Trump wants to cut conservation spending by more than $14 billion over 10 years by killing the Conservation Stewardship Program, $12 billion in savings alone, end the Regional Conservation Partnership Program and tighten rules for the Conservation Reserve Program.
The administration wants to limit CRP enrollment of whole farm fields, except for grasslands, and end signing and practice incentive payments, with the exception of the Conservation Reserve Enhancement Program. CRP payments also would be capped at 80 percent of local rental rates.
The budget also would eliminate the Livestock Forage Program, a form of disaster assistance, to save $4.5 billion over 10 years.
Trump's back-to-the future plan for SNAP is even more far-reaching than many of his farm program proposals: The budget calls for partially converting SNAP to a commodity distribution program and tightening work requirements, slashing projected spending on the program by $213 billion over 10 years.
The budget says that SNAP enrollment has remained “stubbornly high” despite the economic recovery. “The budget proposes a bold new approach to administering SNAP that combines traditional SNAP benefits with nutritious and 100 percent American-grown food provided directly to households,” the plan says.
Under the Trump proposal, households receiving $90 or more per month in SNAP benefits will receive about half of those benefits in the form of a USDA foods package, which would include items such as shelf-stable milk, breakfast cereal, pasta, peanut butter, beans and canned fruit, vegetables, and meat, poultry or fish.
According to a USDA fact sheet, the amount of food provided to each family would be scaled to the overall size of the household’s SNAP allotment. About 81 percent of SNAP households, or 16.4 million households, would be affected by the plan.
SNAP has existed in its current form since 1973, when that year's farm bill made the food stamp program nationwide. Prior to that time, some jurisdictions still provided commodities. USDA commodities are still distributed in lieu of SNAP benefits on some Indian reservations.
By 2027, the cuts to SNAP would reduce the projected cost of the program by about 34 percent.
The conversion of some EBT benefits to food packages would save an estimated $129.2 billion alone. Other proposals to cut SNAP costs include restricting broad-based categorical eligibility to households receiving Temporary Aid for Needy Families cash assistance, saving $30.6 billion over 10 years. Also, states would no longer be allowed to get waivers from the work requirement for able-bodied without dependents unless the unemployment rate is 10 percent or higher.
The FY19 budget also would cut or eliminate a number of programs that are funded outside the farm bill. Among the proposals:
-Kill the flagship international food aid program, Food for Peace, which is operated by the Agency for International Development, to save $1.6 billion in 2019. The budget also would eliminate USDA's McGovern-Dole international school-feeding program and Food for Progress program.
-Eliminate USDA's Rural Business and Cooperative Program (saving $103 million in 2019); Rural Water and Wastewater Grants (saving $509 million); and Single Family Housing Direct Loan (saving $68 million).
-End interest payments to electric and telecommunications utilities, saving $1.3 billion over the decade.
Agriculture secretaries have traditionally held media briefings to answer questions about USDA's annual budget. Agriculture Secretary Sonny Perdue instead issued a general statement defending the proposal.
"President Trump’s budget proposal is fiscally responsible and no longer puts off the tough decisions to future generations. It would be immoral to saddle our grandchildren, and their grandchildren, with this mounting fiscal disaster," Perdue said.
“At USDA, we will do our part to get America’s fiscal house in order. This is familiar territory for me, because when I was governor of Georgia, five of the eight budgets I submitted to the legislature had less money in them than the budget before. Understanding that this is the president’s proposal, and that Congress will make its mark on it, we are prepared to manage to the resources we are ultimately provided."
The chairmen of the House and Senate Agriculture committees, Rep. Mike Conaway, R-Texas, and Sen. Pat Roberts, R-Kan., respectively, issued a joint statement saying they were committed to writing a new farm bill that will benefit "farmers, ranchers, consumers and other stakeholders. This budget, as with every other president’s budget before, will not prevent us from doing that job. We are committed to maintaining a strong safety net for agricultural producers during these times of low prices and uncertain markets and continuing to improve our nation’s nutrition programs.”
Conaway warned members of the National Cotton Council on Saturday to expect the budget to target farm programs again. “My guess is (Budget Director) Mick Mulvaney will not listen … one more time. and we’ll have to argue why those cuts to farm programs won’t make any sense,” Conaway said.
The top Democrat on the Senate Agriculture Committee, Debbie Stabenow of Michigan, said Monday that the budget was "out of touch with our farmers, families and rural communities. The proposed cuts to both the USDA and the farm bill would hurt American agriculture, neglect rural businesses, and leave families and seniors behind. This is especially troubling given the state of the fragile rural economy."
The budget proposals came under sharp criticism from farm groups and anti-hunger advocates.
The American Farm Bureau Federation said the proposed farm program cuts "in the current economic cycle are unwarranted and unwise. Farmers and ranchers have always been concerned about high budget deficits and they have done more than their fair share over the years to reduce red ink."
"This is the most caustic, anti-farmer budget request that we have seen in many many years," said Greg Fogel, policy director of the National Sustainable Agriculture Coalition. "If the Administration's FY19 budget request is realized, America's family farmers and ranchers will suffer, rural communities will lose the tools and resources on which they depend for job creation and enterprise development, low-income individuals and families will be denied the critical nutrition support that they need, our water will become more polluted, and research investments will be decimated rather than growing as they should."
Gordon Stoner, president of the National Association of Wheat Growers, said the proposed cuts to farm programs "will only hinder the growth of rural America and will hurt those farming families who are experiencing some of the worst economic hardships in decades. Cutting funding to USDA when all commodities are experiencing low prices is unsound policy and fiscally irresponsible."
Roger Johnson, president of the National Farmers Union, said the budget "reflects a clear misalignment of the government’s priorities compared to the actual needs of the American public. It’s a harmful and short-sighted plan that should be quickly rejected by Congress."
Jim Weill, president of the Food Research and Action Center, said the budget "eviscerates" SNAP and proposes "a Rube-Goldberg designed system of commodity distribution via food boxes that will be administratively costly, inefficient, stigmatizing, and prone to failure, and that will return the country to Depression-era anti-hunger approaches."