Failing to pass last week’s farm bill may have been one of the smarter decisions reached by this gridlocked Congress, but the holdout was unfortunately, like the Nickelback song, a “Fight for All the Wrong Reasons.”
Last Thursday, the U.S. House of Representatives failed to pass a farm bill for the first time in at least 40 years. The five-year bill planned to, among other things, redistribute money into a new crop insurance program, create new subsidies for peanut, cotton, and rice farmers, add money to support fruit and vegetable growers, and restore insurance programs for livestock producers. The bill also contained provisions for food stamps, proposing to cut $2 billion annually to the food stamp program, deny food stamps to criminals convicted of violent crimes, and allow states to impose work requirements and drug tests on food stamp recipients. The total cost of the bill came to $940 billion, 47 percent more than the farm bill passed in 2008.
In Congress, the debate was centered solely on the food stamp cuts. The 62 Republicans voting “no” believed the food stamp cuts weren’t big enough, and the 172 Democrats voting “no” believed the food stamp cuts were much too large. Fortunately, this gave enough “no” votes to defeat the bill. Unfortunately, it missed the entire point of why it would be bad for the country to pass a farm bill at all.
Subsidies to farmers are a manifestation of special interest politics; they do no good for the country outside of a few rich and politically connected individuals. This is the idea of “concentrated benefits, diffuse costs”; while large benefits are concentrated on a select few with lobbying resources and political connections, the costs are diffused over millions of taxpayers. As such, the beneficiaries have strong incentives to make political contributions and protect the program, while each taxpayer (who pays very little) has much less incentive to remain politically involved in the matter. This leads to a gross waste of resources to the politicians’ special interest groups. Last Thursday’s farm bill was an attempt at such waste.
For one, the bill was much too costly. At nearly $1 trillion dollars over the next ten years, the bill reflected a 47 percent increase from the farm bill passed just a few years ago in 2008. Even that subsidy bill (already $640 billion) was vetoed by George W. Bush, one of the biggest spendthrifts to occupy the Oval Office, on the grounds that it would “needlessly expand the size and scope of government.” In the midst of an economy $17 trillion dollars in debt, and a budget crisis so serious that we supposedly can’t afford to hold public tours of the White House, hundreds of billions of dollars in wasteful subsidies was a non-factor in the debate. The Republicans in Congress are a case in point; not only did 62 of them vote against the bill on the grounds of welfare cuts, but 171 supposedly fiscally conservative Republicans voted in favor of the bill.
Furthermore, farm subsidies raise prices to U.S. consumers, harm world trade, cause overproduction, land price inflation, and a host of other economic distortions. The subsidies go mainly to the largest, wealthiest, and most politically connected farms, resulting in what some refer to as a “reverse Robin Hood” phenomenon. A report issued last year by Senator Tom Coburn (R-Okla.), for instance, found that $316 million in farm subsidies each year go to millionaires, some of which aren’t even farmers. Mark F. Rockefeller is an example: the fourth-generation Rockefeller and son of former Vice President Nelson Rockefeller received $342,634 in taxpayer handouts over the last decade in exchange for not farming on unused farmland he owns in Idaho. And Mr. Rockefeller is certainly not alone; more than 1,500 residents of Manhattan receive taxpayer money in farm bill subsidies.
But this waste was lost in the congressional debate over the newest farm bill. The scariest thing might be that if the welfare cuts were deeper, the bill would almost certainly have passed on Republican support alone.
This brings me to my conclusion: while the politicians squabbled over $2 billion in food stamp cuts, the hundreds of billions of dollars issued to farmers was, as usual, a non-issue. (For the record, food stamp spending has quadrupled over the last decade, from approximately $20 billion annually to $80 billion annually. Cutting $2 billion per year for five years, especially as the economy recovers, hardly seems to be the devastating cut Democrats have made it out to be.)
So while the failure of the farm bill is ultimately a triumph, it comes also with the reminder that much more is to be expected from our leaders on both sides of the aisle. Before we liberty-minded and fiscally conservative individuals celebrate the decision, we would do well to remember that, in the end, it came right for all the wrong reasons.
The author’s name was removed from this article retroactively at their request.