The White House plan to reduce $1.5 trillion from the budget begins with agriculture. The 18 pages which deal with program cuts are part of 80 pages of job creation, tax reform, and budget cuts issued Monday as Congress begins its effort to do the same. But after a 145 word preamble about the need to cut spending and make reforms that have not been done “for years,” it all begins with the “Agriculture Sector.”
The budget cutting plan begins by paying compliments to agriculture and the fact that “A strong agricultural sector is important to maintaining a strong rural economy.” It says that farm and rural sectors are supported through programs that fund “agricultural research programs, providing assistance to beginning and dis-advantaged farmers, pursuing trade agreements, and increasing funding for programs to expand U.S. agricultural exports.” But the plan says farm income is high, and while “The administration remains committed to a strong safety net for farmers…there are programs and places where funding is unnecessary or too generous.” At that juncture the plan details cuts to direct payments, crop insurance, and conservation, with an added four year extension to disaster program assistance, as long as farmers have crop insurance and disaster payments do not exceed expected income.
1) Direct payments are totally eliminated in the White House proposal. It says they do not vary with yield, and that is why the program was established, because the world trade organization complained that prior programs promoted crop production and depressed prices in developing countries. The White House plan places blame on the direct payment program for difficulties sustained by beginning farmers, “have priced young Americans out of renting or owning the land needed to enter into farming. In a period of severe fiscal restraint, these payments are no longer defensible, and eliminating them would save the Government roughly $3 billion per year.”
2) Crop insurance, which received $6 billion in cuts in 2010, will be getting another $8.3 billion in cuts under the White House proposal. While the plan says crop insurance “is a foundation for our farm safety net,” the plan says it costs the government $8 billion per year to run. (Keep in mind that the budget cuts being proposed would be over a 10 year period.) While the plan says crop insurance companies agreed to changes that saved $6 billion over 10 years…The administration believes there are additional opportunities for streamlining the administrative costs of the program.