BIRTH OF A SUBSIDY
Benefit for Ranchers Was Created to Help GOP Candidate
Tuesday, July 18, 2006
If not for a tight Senate race in South Dakota in 2002, there might have been no Livestock Compensation Program.
In August 2002, 12 weeks before the election, aides to the Republican candidate, then-Rep. John Thune, were worried about the political fallout from a speech made by President Bush during a visit to Mount Rushmore, with Thune in attendance. The president had pointedly refused to promise ranchers new large-scale federal drought relief, suggesting instead that Congress consider shifting some funds from a recently enacted farm bill.
The president's tough line undercut Thune's message that a GOP senator could get more done for the state during a Republican administration than could the Democratic incumbent, Tim Johnson.
Afterward, hundreds of disgruntled ranchers who had attended the president's speech headed for a Democratic rally in nearby Rapid City, where Johnson and Sen. Thomas A. Daschle (D-S.D.), then Senate minority leader, lambasted the administration for letting South Dakota ranchers down.
"It was a stunning political blunder," said Bob Martin, Johnson's communications director. "The president basically said, 'Bootstrap it, boys.' "
In Washington, the White House political affairs office, then directed by Ken Mehlman, recognized the importance of the drought-relief issue to the Thune race. That spurred an effort in the administration to come up with a way to help the embattled Republican candidate, according to a former senior official at the Department of Agriculture.
In his speech in South Dakota, the president said he opposed drought relief that would add to the federal budget deficit. So White House and USDA officials came up with the idea of tapping a special fund derived from annual customs receipts, the former official said. The fund, dating to 1935, is known as Section 32. The secretary of agriculture can use it to help farmers without consulting Congress.
On Sept. 12, Thune weighed in with a letter to the USDA suggesting the use of the fund.
One week later, then-Agriculture Secretary Ann M. Veneman summoned reporters to the USDA's broadcast center and, with Thune and several other Republican lawmakers at her side, announced the creation of the Livestock Compensation Program, using $750 million from the special fund.
The ceremony, which was not attended by any Democrats, had the aura of a campaign event.
Veneman credited Thune with the "very creative suggestion" of using Section 32. After saying the USDA had "worked closely with the congressman," Veneman explained the program and introduced Thune for remarks.
During a campaign swing through South Dakota four days later, Thune thanked the White House for finding a way to help ranchers "that didn't take an act of Congress."
South Dakota ranchers received $50 million of the first $750 million the USDA set aside for the program.
It did not save Thune. He lost to Johnson by 524 votes and had to wait two more years to enter the Senate. In 2004, after a campaign that focused more on abortion than drought, Thune defeated Daschle.
Asked about the livestock program, Thune's office said last week, "Then-Congressman Thune supported this program because it was a responsible approach to helping South Dakota's farmers and ranchers, who were suffering from a devastating drought."