The Farm Bill will be vetoed
We expect the House to vote on the Farm Bill conference report today. The President will veto this bill. Here is the President’s statement on the bill.
The final legislative language for the conference report was released Tuesday morning.
Hint: If you want to find the really bad stuff in a big bill, always start at the end of the bill’s Table of Contents.
A few of us have been debating the question “Which is the most important reason for the President’s veto of this bill?” Candidates include:
- Too much spending: The bill increases spending by almost $20 billion over the next ten years, at a time when net farm income is at an all-time high. Much of this additional spending is disguised by budget gimmicks that take advantage of formal scoring rules to hide real spending increases.
- New sugar program: The bill would make the government buy sugar for 2X the world price, store it, then resell it at about an 80% loss to the taxpayer. Sugar sells for about 11 cents/lb on the world market. The U.S. government would have to buy sugar for about 22 cents/lb, store it, and then auction off the excess to ethanol plants. We estimate that such an auction would net the government about 4 cents/lb. In addition, this new provision would require the government to guarantee that domestic sugar producers get 85 percent of the domestic sugar market.
- Subsidies for rich farmers: Farmers would be eligible for government subsidy payments if their incomes were as high as $1.5 million if married, and up to $750,000 if single. We had a big fight with Congress last year over whether families with income of 3 times the poverty level should receive taxpayer-subsidized health insurance. This bill would subsidize a married farming couple with income more than 107 times the poverty level (which is $14,000 for a couple). Put another way, such a couple would be in the top 0.2% of the income distribution. You would be subsidizing their business with your income taxes.
- Getting the best of both worlds: “Beneficial interest” is a provision of current law which allows you to lock in a government subsidy payment when the market price for your good is low, and then hold the actual good and sell it when the market […]