You’ll never believe it, you guys. The 2014 Farm Bill could – and I know, this is gonna sound crazy – impose more harm on US taxpayers and consumers than our political and media elite promised us just a few months ago. No, really:
A record U.S. harvest has pushed crop prices so low that taxpayers may pay billions of dollars more to subsidize farmers than anticipated just months ago, thanks in part to changes Congress approved this year.
Lawmakers passed a five-year farm law in February and hailed its projected savings in subsidies of $14 billion over a decade. The forecast was based on farmers getting paid more for their crops. Instead, prices have fallen and may trigger subsidies the law aimed to reduce.…
The bill, one of the few bipartisan measures Congress passed this year, could end up costing taxpayers billions of dollars more than expected after legislators bet commodity prices would stay high and states would end programs that qualified them for higher food stamp spending.…
A drop in crop prices, combined with subsidies added in the new bill, may more than double payments in 2015 from what lawmakers anticipated, according to one estimate….
Payments to growers of corn, peanuts and other crops may reach $6.5 billion for this year’s harvest, or about $4 billion more than lawmakers anticipated in the farm bill, said Vincent Smith, director of the Agricultural Marketing Policy Center at Montana State University.
I’m sure all of this comes as a huge surprise to the folks on Capitol Hill and in the Acela corridor press corps.
The ‘Age of Austerity,’ GOP Style
As you may recall, when the “conservative” (hey, stop laughing!) House GOP passed the Farm Bill last January, several members were quick to tout the big farm subsidy “savings” that the Congressional Budget Office projected. The media, in typical fashion, accepted such statements at face value, dutifully reporting the “savings” in their frequent reports. For example, the Washington Post’s big explainer on the Farm Bill helped explain:
How much will the farm bill cost? And how much in federal spending will be cut?
The cost of the Agricultural Act of 2014 is $956.4 billion, according to estimates by the Congressional Budget Office.
The measure is expected to reduce federal spending by $16.6 billion over the next decade, according to the CBO. Supporters of the bill argue that the bill saves closer to $23 billion, based on budgeting that existed when the last farm bill passed in 2008 and before automatic budget cuts known as sequestration took effect.
Regardless, the cuts are a major selling point in this age of austerity.
Major, dude. Major. The New York Times filed a similar report, using the same, unquestioned numbers: “The bill is expected to save about $16.6 billion over the next 10 years,” they told us. Oops.
Of course, anyone with basic math and reading comprehension skills knew that these CBO numbers were total and utter garbage, concocted using record-high crop prices that masked the true cost of the new and current farm subsidy programs. For example:
@jaseliberty even worse, those savings are fake, based only on record crop prices that’ll never last. When prices fall, the savings go POOF— Scott Lincicome (@scottlincicome) July 11, 2013
Hey, @darenbakst, with US crop prices falling, shouldn’t CBO re-score the #FarmBill “savings” (which were based on record high prices)?— Scott Lincicome (@scottlincicome) December 10, 2013
CBO estimates of #FarmBill savings assumed high commodity prices wld continue. Costs wld “baloon” if prices drop. See http://t.co/aJypm3VDR8— Scott Lincicome (@scottlincicome) December 10, 2013
I certainly wasn’t alone. Indeed, policy analysts from Cato, Heritage and elsewhere had been screaming about the Farm Bill’s rigged numbers for almost a year before the final bill became law.
And yet the vast majority of the US media never once thought to Google the issue or even think to question the obvious garbage they were being fed. Saves money, you say? Well ok then! Now, where’s my biscuit?
But wait, there’s more!
Also mostly-unreported in the mainstream press was the fact that the Farm Bill not only maintained some of the most pernicious US subsidy programs, but actually made them permanent (instead of requiring reauthorization every five years, as was the case in previous bills). Among such measures are those which line the pockets of well-connected US sugar producers through a byzantine array of protectionism, below-cost loans and other arrangements that raise the US price of sugar (and thus the typical American family’s grocery bill) well above global averages. Not content with this sweet (heh) deal, Big Sugar has since – believe it or not – petitioned the US government for anti-dumping and anti-subsidy (yes, really) duties on sugar imports from Mexico, the only country that is free from protectionist quotas due to NAFTA.
As the Wall Street Journal reported yesterday, all of this is working just according to plan: “The index for sugar and sweets rose 1.6% on the month, the largest jump in three years.”
Largest jump in candy prices in three years. Just in time for Halloween. Thanks, Congress!
Now, I really can’t fault the CBO (see: garbage in, garbage out) or the subsidy-loving “conservative” House members (see: public choice theory) for any of this – they’re just acting as all but the most naïve partisans and explanatory journalists (but I repeat myself!) have come to expect. But it really is inexcusable for reporters (a) not to loudly question these obvious issues before the Farm Bill became law (i.e., when it actually mattered); and (b) now to report the Farm Bill’s inevitable harms to taxpayers and consumers as if they were, like, totally unexpected.
Sadly, the only thing less surprising than the Farm Bill’s fake savings and all-too-real harms is the media’s total disinterest in them. And, sure, all of these problems might cost Americans billions of dollars next year (with absolutely no repercussions for our political class and their farm cronies), but at least we’ll finally get to the bottom of this latest Palin thing any day now.
Great work as usual, guys.
