WASHINGTON, May 22, 2017 - President Trump’s fiscal 2018 budget proposes to cut crop insurance by $29 billion over 10 years, slash nearly 30 percent from food stamp spending and gut some key conservation, international food aid and rural development programs.
The budget, which seeks to reduce federal spending by $3.6 trillion over 10 years, also would reduce USDA staff by 5.5 percent across a range of agencies.
The cuts to crop insurance would cap premium subsidies at $40,000 per farmer, impose a new means test on premiums - as well as farm bill commodity programs - and eliminate the Harvest Price Option on revenue policies.
As reported by Agri-Pulse last week, the proposals mirror provisions in bills that have been introduced by Rep. Ron Kind, D-Wis., and Sens. Jeff Flake, R-Ariz., and Jeanne Shaheen, D-N.H.
In addition to the payment cap, producers who make more than $500,000 in adjusted gross income annually would no longer be eligible for either premium subisides or commodity program payments. There is currently a $900,000 AGI limit for commodity programs but not for crop insurance.
"President Trump promised he would realign government spending, attempt to eliminate duplication or redundancy, and see that all government agencies are efficiently delivering services to the taxpayers of America. And that’s exactly what we are going to do at the U.S. Department of Agriculture," Agriculture Secretary Sonny Perdue said in a statement Tuesday.
The budget proposal, which is likely dead on arrival in Congress, given the draconian nature of the cuts, includes $46.5 billion in reductions to the Agriculture Department in addition to reducing the cost of the Supplemental Nutrition Assistance Program, formerly known as food stamps, by $193 billion over 10 years.
Budget Director Mick Mulvaney told reporters Monday that the budget gives the states more control, and a bigger share of the cost, of administering the SNAP program, but he acknowledged that the cuts would have to wait for the next farm bill to be debated. The budget calls for requring a state match for benefit costs, rising from an average of 10 percent in 2020 to 25 percent by 2023. States, in turn, would be allowed to reduce benefits to lower their costs.
SNAP participation remains at "very, very elevated levels," even though it has declined as the economy has improved, he said. "I think at the height of the recession there were 47 million people on SNAP, and now there’s 44 million -- even though we're at supposedly near full employment."
The estimate of the reduction in SNAP costs includes $2.4 billion in revenue from a proposed application fee on food retailers. SNAP is currently projected to cost about $67 million annually over the next 10 years.
Senate Agriculture Chairman Pat Roberts, R-Kan., and House Agriculture Chairman Mike Conaway, R-Texas, issued a joint statement pleging to protect farm and nutrition programs.
“We support the Trump administration’s goal of achieving three percent economic growth for our nation. USDA’s latest estimates find agriculture, food, and related industries contribute $992 billion to our economy. As we debate the budget and the next farm bill, we will fight to ensure farmers have a strong safety net so this key segment of our economy can weather current hard times and continue to provide all Americans with safe, affordable food. Also, as a part of farm bill discussions, we need to take a look at our nutrition assistance programs to ensure that they are helping the most vulnerable in our society," the lawmakers said.
Perdue defended both SNAP and crop insurance during an appearance before the House Agriculture Committee and will be on the spot again on Wednesday when he testifies before the House Agriculture Appropriations Subcommittee, which controls his department’s annual budget.
Other proposals that target USDA in the budget would reduce conservation spending by $5.8 billion over 10 years by among other things freezing enrollments in the Conservation Stewardship Program and killling the Regional Conservation Partnership Program.
The budget also would kill some relatively small programs elsehwere in USDA, including the Market Access Program, the Foreign Market Development Cooperator Program and the Biomass Crop Assistance Program, to save another $3.1 billion; and eliminate the Rural Economic Development Program to save another $477 million. The rural development program provides zero-interest loans through rural utility organizations that are then used to finance local development.
The budget would slash international food aid by abolishing the $1.7 billion Food for Peace program, which provides U.S. commodities to address hunger overseas. "The United States is the largest provider of emergency food aid, typically accounting for a third or more of all contributions," the president's budget says. "As the United States refocuses assistance to the highest priority areas, the budget calls upon other donors to do their fair share."
Among the crop insurance proposals, the $40,000 cap on premium subsidies is the biggest saving to taxpayers, reducing spending by $16.2 billion over the decade. Eliminating HPO saves $11.9 billion.
The proposals may embolden critics of the program when Congress debates the next farm bill, but a joint statement from trade groups representing the crop insurance industry expressed confidence that Congress would reject the cuts.
“Destructive cuts to crop insurance have been proposed by past administrations and soundly rejected by congressional leaders, who recognize the importance of maintaining a strong farm safety net,” the statement said. “We fully expect that to be the case again this year, and we are hopeful to engage in meaningful dialogue about how to support America’s hardworking farmers and ranchers in difficult times like these.”
The statement was signed by the American Association of Crop Insurers, Crop Insurance and Reinsurance Bureau, Crop Insurance Professionals Association, Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents and National Crop Insurance Services.
The budget proposal comes as House Agriculture Chairman Mike Conaway, R-Texas, has been urging House GOP leaders not to cut funding for the next farm bill. "I anticipate Congress will produce a final budget that reflects these conditions and enables us to craft an effective, efficient farm bill," he said.
Jim Weill, president of the Food Research and Action Center, which advocates for SNAP and other nutrition programs, said the proposed cuts to SNAP would cause “untold harm to the millions of people in this country who struggle against hunger. Those harmed will be children, seniors, people with disabilities, veterans, and adults struggling with low wages, temporary joblessness and involuntary part-time work — SNAP’s beneficiaries.”
Even before the budget was released, the chairman of the House Agriculture Appropriations Subcommittee, Robert Aderholt, R-Ala., said that lawmakers were unlikely to follow many of the recommendations. “When the administration sends over their budget they’re looking for programs to cut to try to get their numbers to all add up,” he said.
Trump's proposed savings at USDA include $6.6 billion in new user fees for the Food Safety and Inspection Service agencies. Such user fees are routinely proposed by White House budgets as a way to show increased savings.
The latest budget plan builds on a “skinny” proposal released in March that dealt only with “discretionary” spending programs, those whose spending levels are determined by annual appropriations bill. The expanded version includes programs in which the spending levels are mandated by the farm bill and other laws. The March proposal would have reduced discretionary spending at USDA by 21 percent. The proposal would eliminate the McGovern-Dole international school feeding program and cut research and rural development funding.
(Updated 11:30 a.m. EDT.)