Obama Pushing Farm Subsidy Cuts
The Obama administration isn't giving up on its proposals to cut farm subsidies, even if they've been rejected on Capitol Hill.
The budget the White House released Thursday includes the administration's idea of phasing out fixed payments to farmers who have more than $500,000 in sales.
That and other cuts are included in a 131-page book released by the White House outlining proposals to reduce spending by $17 billion in 2010.
Farm groups roundly criticized the proposal when it was first offered back in February, arguing that the $500,000 threshold would catch the typical full-time producer.
"I don't think they fully appreciate the impact it will have on real producers," Mark Maslyn, a lobbyist for the American Farm Bureau Federation, said Thursday.
The president's budget also includes a proposed $250,000 cap on the subsidies any one person could collect in a year. Also included are proposals to reduce subsidies for crop insurance and eliminate payments for cotton storage.
It's practically a tradition for presidents to propose spending cuts knowing they won't be accepted by Congress.
But some critics of farm programs were glad to see the White House proposing the cuts again.
"We're encouraged that bluster from the agribusiness-as-usual subsidy lobby has not deterred the president in his efforts to find meaningful savings and cut waste and abuse," said Craig Cox, Midwest vice president of the Environmental Working Group.
Crop insurance costs have jumped from $2.4 billion in 2001 to a projected $7 billion this year, and the primary reason is farmers opting for higher levels of subsidized coverage, according to the White House. The deep subsidies are no longer needed to get farmers to buy more coverage, budget officials say. Crop insurance companies also would take a cut in the president's plan.
The largest proposals would save the following amounts over a five-year period, according to the White House:
- Phasing out direct payments to farmers with $500,000 in sales: $3.7 billion.
- Reducing crop insurance costs: $2.1 billion.
- Ending cotton storage payments, $279 million.
- Reducing overseas marketing assistance by 20 percent: $158 million.
- Capping crop subsidies at $250,000 per farmer: $108 million.
A few other proposals would likely generate less opposition but wouldn't save nearly as much.
One idea would save $62 million in lease costs over a 15-year period by consolidating some of the USDA's office space in Washington. Another would save $670,500 a year by consolidating the department's utility bills via a Web-based payment system instead of wasting staff time and postage having field offices send paper checks to a central office.