Richard Posner says:
The President has expressed dissatisfaction with the proposed Farm Bill wending its way through Congress. He wants farmers whose annual incomes exceed $200,000 to be denied subsidies; the present cutoff is $2.6 million and Congress will not go below $950,000. The President's concern with farm subsidies cannot be taken very seriously, since in 2002 the Republican Congress with Administration connivance greatly increased these subsidies and at the same time repealed some of the modest reforms that the Clinton Administration had introduced in 1996. The Administration's current proposals would, if enacted, be a step in the right direction, but they will not be enacted, and, judging from the 2002 legislation, they are intended I suspect merely to embarrass the Democratic Congress.
What I don't get is why the Democratic Congress is letting itself be embarrassed this way. Of all possible reforms, this would seem to be a no-brainer. How many fabulously wealthy Democratic farmers in swing states can there be?
Well, it's companies like ADM that give lots of money to both parties.
at the same time repealed some of the modest reforms that the Clinton Administration had introduced in 1996
That's giving the Clinton Administration a bit too much credit for the 1996 farm bill, and not enough credit to Sen. Lugar and Rep. Armey, among others.
It's generally easier for the President to be sane on farm policy; getting Congress to do so is a bit more impressive.
Administration "connivance" is a bit strong for the 2002 farm bill; the Administration released press releases complaining about the bill, then signed it attempting to claim that they had kept it from being even worse. I wish that the 2002 bill had been vetoed, but the blame for the 2002 bill, like the credit for the 1996 bill, goes mostly to Congress in each case.
How many fabulously wealthy Democratic farmers in swing states do you think it would take to derail the legislation?
They want to hang on to newly acquired swing districts in rural areas. Urban members and other members are going along in exchange for increases in food stamp programs, a few things for specialty crops (non-Big Five), and so on. (Massive cuts for the McGovern-Dole aid to poor foreign schoolchildren, though.)
There's a classic cycle in voting preferences. While it is true that a reform bill of cutting existing subsidies but increasing food stamps etc. could pass, the pro-subsidy Congressmen peeled off urban liberals by promising increase in food stamps and other assistance, and through in increases in research on organics and some payments to fruits and vegetables, formerly shut out. The urban liberal members prefer increased subsidies for the Big Five plus food stamps to the status quo.
One of the things about a cycle is that there are many possible bills that could get a majority.
Oh, and farm subsidies are broadly popular in rural areas, even among people who don't directly benefit.
The democrats appear to be executing a scorched earth policy. Ramping up spending on everything possible in order to claim that Bush overspent and undertaxed at the same time.
Those subsidies flow to agricultural states. Let's see- Illinois has two Democratic senators, Iowa has one, Nebraska has one, South Dakota has one, North Dakota has two, California has two, Wisconsin has two, Indiana has one, Ohio has one- should I go on, or is the point made?
A couple of problems with this statement. First, why is he calling it “the Republican Congress” when in 2002 we had a Republican-controlled House and a Democrat-controlled Senate? The author of the Senate version of the 2002 Farm Bill (which was higher than the House version) was Tom Harkin (D-IA) who replaced Richard Lugar (R-IN) as chair of the Senate Ag Committee. Harkin opposed Freedom to Farm in 1996 dubbing it “freedom to fail” and was one of the chief proponents of restoring agricultural subsidies.
And yes while President Clinton did sign Freedom to Farm in 1996, it was largely a proposal by the House and Senate Republicans that President Clinton latched onto. While Clinton at least didn’t veto it twice (unlike welfare reform), it should be noted that within about a week after signing into law he visited Iowa and promised to try to “fix” the bill by restoring some of the subsidies that were to be phased out.
Because, silly, this kind of wretched excess only gets flagged when the pubbies commit the foul. (Hmmm . . .whatever happened to that Columbian free trade treaty? Not passing it would be a real embarrassment that will cost them this fall. Not!) One would expect that at least the libertarians would call them on crap like this, but apparently they're hopelessly in the tank for the Dems because it's a Dem year (if that's not too circular for you).
The question on my mind is, how many food riots do there have to be before we stop paying farmers *at all* to refuse to upgrade their skills by making more stuff no one wants at the prices they can make it?
And secondarily, how to make that last rhetorical question easier to parse?
If 'income==gross', then profit margin would be an essential factor. If they only get 5% profit on $1M, that is only $50k profit.
There seems to be a misapprehension in the original post that spending measures are directed at voters. They are directed at contributors. I state with some assurance that the Democrats (and Republicans, for that matter) in Congress are not "embarrassed" by this measure; they will tout their role loudly when out fundraising.
Sometimes Republicans are in power and sometimes Democrats are in power. The Farm Bill is proof that year after year our politicians can put their partisan differences aside and give us the best legislation money can buy. God bless America!
Isn't the title of your post a misleading summary of what Posner is saying? He's saying that the Democrats enacted modest reforms under President Clinton, but that the Republican Congress and George Bush then undid them. He says that the current democratic congress is pretty much maintaining the pattern set by Bush and the Republicans -- and that Bush's current objections are only cheap opportunism and empty rhetorical gestures (as evidenced by Bush's refusal to raise these points when Congress was Republican-controlled).
"How many fabulously wealthy Democratic farmers in swing states can there be?"
Well, a lot. Iowa, Ohio, Wisconsin, and Minnesota are all swing states.
dcuser, I'm not sure what Posner is saying, but any reforms enacted in 1996 would have been enacted by a Repubican congress, not a Democratic one. Let's not get too carried away with the history rewriting.
Yeah, the question of gross-vs-net incomes would seem to be pretty important here. Kind of surprised that you all seem to be ignoring it.
No, wait a sec - what's the opposite of surprised? Because that's what I meant.
Why not ask why the GOP has allowed these huge handouts to farmers for years and have done nothing to stop it? I have to pay for the rise in food prices while the growers get my tax money? And you blame the Dems? I blame both parties. Both.
The farm bills have to stop - consumers in the US currently pay 300% more than in the world market
The current limitation is based on adjusted gross income for the prior three years. This is particularly egregious since most people with 1.5 million AGI have considerably higher cash flow.
It's called buying votes with taxpayer money. As my late father-in-law, a lifetime farmer, once told me, everyone knows the Democrats do more for the farmer than Republicans.
He always voted Democrat although he was supposedly a devout Catholic opposed to abortion and just about every other social agenda issue of the Democrats. Money talks. He was worth over $10,000,000 when he died and knew how to get every subsidy there was.
Bear in mind that Nancy Pelosi is a farmer, technically speaking. She owns a pretty good sized vineyard.
This is what happens when you value the right of Iowa farmers to vote first over the right of Michigan and Florida voters to vote at all.
This is a rediculous giveaway but it is the way our government works in this age. I have made my living farming for 30 years and this is a once in a generation boom in ag. Profit margins are considerably higher than 5%, on our farm we will run above 50% actual cash margin. It is high times in farm country and to have such payoffs made to farmers when prices are at record highs is just stupid government.
As a farmer and a recepient of of subsidies, I read these comments with interest. Socialism is bad. It distorts the marketplace. Now having said that, who is in favor of means testing Social Security? the Stimulus Package? How about rent control in New York?
My land rent is based on what subsidy is associated with it, where is the landlord's means testing. My chemicals, seed, fertilizer have all jumped in price to me these past two years. Is this all due to federal subsidies or is there a problem with the dollar's value on a world wide basis and possibly a little supply and demand issue.
People love to simplify an issue to its most base denominator. Today it is the farmer, tomorrow who knows?
Farm machinery is VERY expensive. Most of the time, most of the dairy farmers left are not making more than $40,000 a year in VT.
If the subsidies end, we will rely on 3rd world and potentially hostile (e.g. China) nations for our food. In a food crisis/war, we will starve within a few weeks.
Our local congressman said that the income cap was on adjusted gross income. According to the form 1040, farm income from schedule F is entered at line 18 before AGI. Schedule F nets out the expenses of farming before coming to the net total which is to be reported at line 18. In other words, the 1.5 million dollar limit is actual net income, before certain personal deductions and tax credits.
To those who argue that the subsidies are justified because farming costs are high:
Every business has costs. Many have even higher costs than farming. That doesn't mean we should subsidize them or put up protectionists import barriers to competing products.
Apparently only farmers are considered rich when they make over 900k a year. For everybody else if your family income sniffs 6 figures, you're rich, so bend over and get ready to take it. Not entirely sure how that works with the cost of living in Nebraska vs Manhattan.
How many fabulously wealthy Democratic farmers in swing states can there be?
I grew up in Iowa, and don't ever let anyone tell you farmers aren't rich. They only appear poor because they take minimal cash out of the business as "income"--all the kids in my high school driving new sports cars were getting free lunches, because their fathers' "salaries" were well below the poverty level; the cars were paid for by the farm and registered as "farm vehicles."
Why do Farmers wear hats with a curved bill?
So their hat doesn't fall off when they're looking in their mailbox for the subsidy check.
Badum bum - ching!
My dad told me that one over 20 years ago.
The more things change, the more they stay the same.