The White House is set to announce what is essentially a $12 billion bailout for farmers who have been hurt by his escalating trade war, The Washington Post's Damian Paletta reports:
The White House has searched for months for a way to provide emergency assistance to farmers without backing down on Trump’s trade agenda, and the new program will extend roughly $12 billion through three different mechanisms run by the Department of Agriculture.The funds will come through direct assistance, a food purchase and distribution program, and a trade promotion program.It will rely in part on a Depression-era program called the Commodity Credit Corporation, which is a division of the Agriculture Department that was created in 1933 to offer a financial backstop for farmers.. . .Because the program was created during the Depression, it does not rely on new congressional approval. It allows the CCC to borrow up to $30 billion from the Treasury Department for assistance.
The move isn't terribly surprising, given that the White House has telegraphed it and even acknowledged farmers would be taking one for Team America. In the same set of April remarks above, Trump called farmers “great patriots” who “understand that they're doing this for the country.”
But this step is also tacit acknowledgment that the trade war is hurting people in the United States, and it also would seem to provide leverage for the countries Trump says are anxious to come to the negotiating table and make concessions. If the U.S. government needs to bail farmers out as a consequence of the trade war, other countries such as China have less incentive to give in. There is also a clear limit to how much Trump can use this method to prop up farmers: $30 billion.
And that goes double given this decision doesn't have the weight of Congress behind it. GOP senators have clearly been skeptical of Trump's trade war — the Republican-controlled Senate passed a symbolic bill calling for more of a role in Trump's tariff decisions two weeks ago — and Trump is essentially doing an end-run around them to avoid another rebuke (a potentially binding one).
Republicans such as Senate Agriculture Committee Chairman Pat Roberts (R-Kan.) and Sen. Joni Ernst (R-Iowa) were skeptical of this move when it was previewed back in April. “CCC is used for emergency items,” Roberts said. “I know it has been misused in the past. I’ve seen that up front.”
And on Tuesday, Sen. Ben Sasse (R-Neb.) quickly derided the bailout and even invoked the Great Depression.
"This trade war is cutting the legs out from under farmers, and White House’s ‘plan’ is to spend $12 billion on gold crutches," Sasse said. "This administration’s tariffs and bailouts aren’t going to make America great again; they’re just going to make it 1929 again.”
Looming in the background of all of this is the 2018 election. There doesn't seem to be a massive backlash against Trump's trade war, but some fear that it could lead to disillusionment in some farm-heavy states and districts, and cause would-be supporters to stay home.
A Washington Post-Schar School of Policy and Government poll earlier this month showed 78 percent of people in battleground House districts said the trade war would be bad for the cost of products in the United States. And Americans as a whole said 56 to 40 that the trade war would harm American jobs.
The Brookings Institution has also estimated that about 65 percent of the employees negatively affected by the tariffs come from counties that favored Trump.
Part of the problem with trade wars is they require patience and pain before the ultimate payoff. These farmers and their allies need to place trust in Trump that it will ultimately be okay — that he will deliver, when all is said and done. The new announcement may reassure them that the administration won't let them wither, but as with any war, there is never a guarantee of success. And the longer it drags on — and this step suggests it will drag on — the more difficult it will be to maintain that faith.
Trump's move may stanch the bleeding, but the point is that there is bleeding.
This post has been updated.