The Free Press, Mankato, MN

Editor's blog

December 13, 2012

Good case that farm bill would add to deficit

A piece from Ron Nixon in The New York Times is worth reading because it takes a crack at the conventional wisdom that a farm bill will cut the deficit by using facts of how farm bills of past have cost far more than their original estimates.

Here's an excerpt of Nixon's piece:

"In June, the Senate passed a $969 billion farm bill that saved $23 billion over 10 years by cutting several farm subsidies and nutrition programs. The House Agriculture Committee has passed its version of the bill, which saves even more: about $35 billion over 10 years. The full House has not scheduled the bill for a vote.

“The farm bill is the only bipartisan deficit reduction bill that passed the Senate this year. It’s only natural it should be part of a larger deficit reduction agreement,” Senator Debbie Stabenow, Democrat of Michigan and chairwoman of the Senate Agriculture Committee, said last week.

But a new analysis of previous spending on farm bills shows that the proposed bills might actually add to the deficit.

The analysis by the Taxpayers for Common Sense, a Washington research group, shows that the last two farm bills, in 2002 and 2008, exceeded their original price tags by billions of dollars. The Congressional Budget Office, which provides cost estimates for legislation, calculated the savings in both bills.

“But taking a look at the C.B.O. scoring track record, it’s pretty clear they aren’t exactly the ‘Farmer’s Almanac’ when it comes to farm bills,” said Steve Ellis, vice president of the taxpayer group.

Mr. Ellis points out that the 2002 farm bill was supposed to cost $451 billion, according to the budge office’s original calculations. But the bill ended up costing $587 billion. The 2008 farm bill had an original price tag of $604 billion, but ended up costing $912 billion

The taxpayer group said that with the worst drought in 50 years expected to drive up the cost of farm programs like crop insurance, there is reason to believe that the most current farm bill could easily exceed $1 trillion and wipe out any savings. Crop insurance, which was supposed to be about $9 billion a year, according to the budget office projections last year, is already on pace to exceed $20 billion this year, due to the effect of the drought."

This makes a lot of sense to me, having covered farming and Washington.

Farmers have a lot of friends in D.C. and very few ever vote no on farmers when there's a natural disaster like drought or flood.




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