From White House to heartland, a call to give up subsidies
By Philip Rucker,
HILL CITY, Kan. — This is what Washington’s new austerity has brought.
A freshman Republican congressman, himself a fifth-generation corn farmer and his family a longtime beneficiary of government agricultural subsidies, drove through the endless fields of far-flung western Kansas to deliver a difficult message.
“Everybody needs to share,” Rep. Tim Huelskamp told a few dozen townspeople sitting patiently on the hard wooden benches of the Graham County Courthouse. “If you’re a farmer like me, you’re going to expect less. Something’s going to go away. The direct payments are going to go away.”
Huelskamp appears to be right. Dramatically cutting or eliminating direct crop subsidies, which totaled about $5 billion last year, has emerged as one of the few areas of agreement in the budget talks underway between the White House and congressional leaders of both parties.
In their recent budget proposals, House Republicans and House Democrats targeted farm subsidies, a program long protected by members of both parties. The GOP plan includes a $30 billion cut to direct payments over 10 years, which would slash them by more than half. Those terms are being considered in the debt-reduction talks led by Vice President Biden, according to people familiar with the discussions.
“There’s no sacred cows anymore,” Sen. Charles E. Grassley (R-Iowa), a farmer who represents one of the nation’s biggest farming states, said in April in a conference call with Iowa reporters. “The bottom line is, ag should be cut like everything else, but no more than anything else. I think direct payments will be done away with.”
President Obama has also taken aim at farm subsidies, with a plan to scale back payments to farmers with incomes of more than $250,000 a year. These talks come as Congress separately begins crafting a new farm bill, which is passed about every five years and sets the terms of the government’s agricultural programs.
So far, the plans spare the agricultural program that farmers and their backers in Congress say is the most essential: insurance to help growers if they have a bad yield or lose crops because of extreme weather, such as a tornado or drought.
“Crop insurance is really key to making sure that they can manage their risks,” Rep. Kristi L. Noem (R) recently told reporters. She represents South Dakota, another large farming state, and her family owns a ranch that receives direct subsidies. “So we’re going to make sure that that program remains viable and a useful tool for them.”
Although no budget deal has been reached, senior officials on Capitol Hill and at the Agriculture Department said they are operating under the assumption that, at a minimum, direct payments will face major reductions.
At a Senate hearing in May, Agriculture Secretary Tom Vilsack told lawmakers that the department is “prepared to do as much as we can with fewer resources, but there is no doubt that cuts will have a real impact on American agriculture and on American people. There will be pain, and everyone will have to sacrifice something.”
That was certainly the approach Huelskamp took with his constituents. He did not promise to go back to Washington and fight to preserve a program that each year funnels about $250 million of public money into farmers’ pockets in his district.
‘It’s all giveaways’
Although farm subsidies are often decried as a form of corporate welfare, Washington’s powerful agribusiness lobbyists have long argued that they help keep rural outposts such as Hill City afloat. And yet, as Huelskamp recently carried his austerity message across the sprawling 1st Congressional District — which is second only to North Dakota’s statewide House district in amount of total subsidies — there was no outcry from farmers.
“I’m sure they’re going to go away. It’s all giveaways — any entitlement program is a giveaway,” said Don Paxson, 72, who farms corn and wheat and said he received about $8,000 this year in subsidies.
“We need to wean them off everything — any income from the government. It’s all a welfare state,” said Carl Quint, 56, another farmer who stands to lose money.
A third farmer, Williard Riggs, 86, shrugged and said: “They’ve got to cut somewhere.”
The government’s farm program arose during the Great Depression to provide a safety net. To protect farmers against big surpluses of commodities such as wheat, corn, soybeans and rice — which lead to falling prices that threaten their livelihoods — the government began awarding cash payments.
The subsidies are based on a formula that includes the amount of tillable land, the type of crops and the farm’s historical production yield. But the payments are not based on how much crop a farmer yields in a given year; a farmer who grows nothing one year would still receive his or her regular payment.
“It’s embarrassing that we still have those levels of payments,” said Dan Glickman, a former Democratic congressman from Kansas and President Bill Clinton’s agriculture secretary. “Agriculture economically is very bullish now, and they don’t need the same kind of programs that they did in the past.”
Lawmakers seem to agree. Democrats and Republicans from farm states are privately warning their local farm bureaus to expect cuts.
“This is a matter of patriotism now,” Glickman said. “Everybody has to share in this thing. And if you don’t need it, you shouldn’t get it.”
‘Cutting its own throat’
Even if individual farmers are willing to give up the subsidies, Huelskamp, who is on the House Agriculture Committee, and other lawmakers are being lobbied from the industry’s official representatives to maintain the program.
Steve Baccus, president of the Kansas Farm Bureau, said he wants policymakers to appreciate the economic impact that the subsidies have on farming towns everywhere.
“Our farmers take that money to town and use it to buy farm machinery, vehicles, washing machines,” Baccus said.
Charles Conner, president of the National Council of Farmer Cooperatives, said that spending on subsidies has fallen dramatically, relative to other government programs. “You cannot in any way claim that rampant government spending over the last several years has been caused by farm programs,” Conner said.
At Huelskamp’s town hall meeting in Hill City, his constituents didn’t so much as wince when the congressman waived a fight to keep subsidies — nor did they at his previous stop in Hoxie, nor at the next stop in Stockton.
After the Hill City gathering, one wheat farmer said in an interview that giving up the direct payments would present an “impossible” strain on his business.
“If they cut those payments, the whole country’s cutting its own throat,” said Allen Trexler, 81.
But Trexler didn’t share his feelings with his congressman. And even if he had, it’s unlikely that he would have changed Huelskamp’s mind.
“You notice I didn’t say, ‘We’re not cutting, and I’m going to go fight to the death,’ ” Huelskamp said in an interview after the town hall meetings. “No. If every single member of Congress came in and said, ‘I’m going to defend my turf,’ you’d have the same [debt problem] — and the people here, they get that.”
Staff writer Lori Montgomery in Washington contributed to this report.