Rich People Shouldn't Get Welfare Either
President Bush got behind that, at least for rich farmers, vetoing a bill for welfare payouts to them. But those sellouts who "represent" us in Congress immediately voted to override his veto. And the senaturds are expected to follow suit. From an editorial in the WSJ:
Since the last farm bill in 2002, the price of cotton is up 105%, soybeans 164%, corn 169% and wheat 256%. Yet when Mr. Bush proposed the genuine change of limiting farm welfare to those earning less than $200,000 a year, he was laughed out of town. The bill purports to limit subsidies to those earning a mere $750,000, but loopholes and spousal qualifications make it closer to $2.5 million. As Barack Obama likes to say, it's time Washington worked for "the middle class," which apparently includes millionaire corn and sugar farmers.Another purported change is the arrival of "fiscal discipline," in Nancy Pelosi's favorite phrase from the 2006 campaign. Yet it turns out this farm extravaganza may bust federal budget targets even more than we thought a week ago. That's because the new price supports - the guaranteed floor payments farmers receive for their crops - have been raised to match this year's record prices.
The USDA reports that if crop prices fall from these highs to their norm over the next five years, farm payments will surge. For example, if corn prices return to $3.25 a bushel from today's $6, farmers would get $10 billion a year in support payments. If bean prices fall to their norm, they'd get $4 billion. Thus, if farm prices stay high, consumers face higher grocery bills and farmers get rich. If farm prices fall, taxpayers kick in the difference and farmers still get rich.
Sugar producers also make out like Beltway bandits, receiving the difference between the world price of sugar, which is now $12 per pound, and the guaranteed price of about $21 per pound. That's a roughly 75% subsidy for already wealthy cane growers and a nice payoff for the $3 million they contribute to House candidates each year.
All of this is a status quo that both political parties can believe in. More than a few liberal Democrats are privately embarrassed by this corporate welfare spectacle. But they've been mollified by Speaker Pelosi, who spent the last week assuring her left that the bill also includes another $10.4 billion for food stamps and nutrition programs. This entitlement expansion comes only days after the Congressional Budget Office reported that paying the bills for existing entitlements could require tax rates to climb to 80% in the future. Yes we can!
House Republicans are equally as complicit, despite their claims of having found fiscal religion after 2006. About half of them voted to override a Republican President. GOP leaders refused to whip against the bill, and two of them - Roy Blunt of Missouri and Adam Putnam of Florida - even voted for it. These are the same House Republicans who last week unveiled their new slogan, "The Change You Deserve."
Yeah, all of it small, and not really change at all.
And P.S. Obama says he's for the bill and McCain says he's against it. Of course, Matt Welch has shown that McCain is anything but "The Straight Talk Express," so you can speculate on what his word on this is worth.
If I understand the situation properly, the original intent of farm subsidies was to prevent a replay of the the Great Depression displacements of families. Banks foreclosed mortgages on small farms, and bigger farmers or corporations absorbed them. Because these bigger entities are more effective at lobbying, they managed to get the subsidy trough tilted toward their end. Given the way Congress is structured, there may be no way to make the system work the way it was originally intended.
Axman at May 23, 2008 9:04 AM
And I thought the $200,000 way too high!!!
Donna at May 23, 2008 9:58 AM
the genuine change of limiting farm welfare to those earning less than $200,000 a year, he was laughed out of town.
And I thought the $200,000 way too high!!!
Note that is less than $200K. And if you look at the cost of farming that is actually reasonable. You have to take into account that out of that amount, they have to fund their retirement, life and health insurance, and their family. The typical small(er) farmer is betting against nature (drought or flood, etc.), the commodities market, the equipment manufacturers, the USDA, the seed companies, and the banks.
To buy a new tractor, planter, plow and associated equipment just to plant is going to set you back an easy $25K (probably closer to $35K). Then a decent sized combine to harvest it is a minimum of $150K. And the typical combine is only good for about 7-8 years and are sold off at about $4-5K. Then add in seed, and other things like fertilizer. Yes, he gets to depreciate it off his taxes over 5-7 years. But you have an initial outlay of around $200,000 just to start with. Then there is land, which in a lot of areas can't be had because developers have moved in and price farmers out of the market.
The hours can be pretty brutal. Planting season they are starting at sunrise and running till sunset or later. Then the other end of the season they do the same thing.
And the income is not a paycheck every two weeks. It's when you deliver the crops to the "market" that you get paid.
Just throwing my $0.02.
Jim P. at May 23, 2008 10:22 AM
Uh, Jim, I'm aware of their high cost of overhead. My mother's family have been farmers, well, for lack of a better reference, since Cain. Boo fucking hoo! They're small businesses. What they do may be more important to us but they're small business and shouldn't be treated special. If you're in business for yourself and go out of business because you can't afford the overhead, get a job! Frankly, the farmers I admire most are those finding ways to counter the current conditions -- the ones opening mazes in the corn field and opening up their huge homes as bed and breakfasts and that sort of thing. Ones selling organic products locally. Businesses that don't change with the times fall by the wayside and should. The government should not bail them out. Oh, and newsflash, in years when the crops fail, they can and do take out loans with that expensive equipment/land as collateral. Farmers have a lot of assets.
Donna at May 23, 2008 10:31 AM
What they do may be more important to us but they're small business and shouldn't be treated special.
Businesses that don't change with the times fall by the wayside and should. The government should not bail them out.
Then you agree that all the tax breaks for "revitalizing" downtown (and other) areas should be gotten rid of? That the SBA should be taken out?
I'm not necessarily disagreeing with you, but the reality is that the system is in place. Trying to dismantle it instantly would be the equivalent of using blast furnace to cook an egg.
Jim P. at May 23, 2008 10:54 AM
Of course the kicker here on trying to limit payments to those earning less than $200K is that most smaller farmers are already limited to receiving nothing. This is why many small farmers take on second jobs. Farmer joke: First farmer "if i win the lottery i am retiring to Cancun." Second farmer "not me, i would just keep farming until i ran out of money."
Jim at May 23, 2008 11:27 AM
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