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Obama Points to Farm Subsidies for Budget Cuts
November 25, 2008 4:39 PM
ABC News' Z. Byron Wolf and Nitya Venkataraman Report: Asked today where he would start cutting spending once he becomes President, Barack Obama immediately pointed to abuse of farm subsidies.
If changing government is his goal, he'll have no more difficult time than with farm subsidies, which confound academics and politicians in both parties, but represent a lifeblood of revenue for the middle of the country.
"Let me give you one example of what I'm talking about," Obama said of government waste at a press conference in Chicago today. "There's a report today that from 2003 to 2006, millionaire farmers received $49 million in crop subsidies even though they were earning more than the $2.5 million cutoff for such subsidies. If this is true, it is a prime example of the kind of waste I intend to end as president." (Read the report here.)
While Obama was talking about people gaming the subsidy system, it is interesting that he immediately thought of farm subsidies - sold every five years when the Farm Bill is passed as a way to help family farmers stay in business and keep American agriculture competitive in the global economy - goals that many people think farm subsidies miss by a wide margin as John Stossel found in Nebraska in October.
Fred Kirschenmann who owns a 3500-acre mixed grain and livestock farm in North Dakota says "in the short term, subsidies are necessary when you have volatility in prices" but ultimately are "not a sustainable system" for small family farms.
Farmers, he says, have never been in a position to bring a product in and determine its value against the market. "They have no economic power to negotiate a price that compensates them for their cost of production."
"What we need to be doing is gradually transitioning away from subsidies to a system that allows farmers to recoup their cost of production,' he says. "Subsidies should not be a handout they ought to be designed so that they provide a basic support to a system so a farmer doesn't go out of business."
Obama grudgingly supported the farm bill last Spring, and supported overriding President Bush's veto of it. He argued at the time that while the bill was not perfect, it was good.
That was not the tack President Bush took when he vetoed the bill in large part for not working enough to cut farm subsidies. In the official administration policy against the Farm Bill, the White House said "the bill continues to increase price supports and send farm subsidies to people who are among the wealthiest 2 percent of American tax filers whose three-year average Adjusted Gross Income (AGI) is greater than $200,000. Payments should be targeted to those who really need them, especially those who have a meaningful connection to production agriculture. This action does not represent fiscal stewardship nor is it farm program reform."
Ending farm subsidies altogether is a favorite topic of Obama's favorite Republican, Indiana Republican Richard Lugar.
Lugar and Sen. Frank Lautenberg, D-NJ, in late 2007 offered an amendment to the most recent farm bill that would have ended direct subsidy payments to farmers altogether and instead created a safety net - think large-scale, no cost insurance for emergencies.
Their proposal got 37 votes in 2007. Obama was campaigning, but his Illinois colleague Dick Durbin supported the amendment.
On his change.gov transition website, President-elect Obama promises to "Fight for farm programs that provide family farmers with stability and predictability. Implement a $250,000 payment limitation so we help family farmers -- not large corporate agribusiness. Close the loopholes that allow mega farms to get around payment limits."
Cutting subsidy payments at $250,000 was the same level sought by President Bush (and overridden by Congress with Obama's help).
November 25, 2008 in Bush, George W., Obama, Barack, Vote 2008: Democrats, Vote 2008: Republicans, Washington, White House | Permalink | User Comments (28)
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Either he is being pragmatic, or he's trying to figure out how he's going to get the money to tear down the Rezko slums and build snazzy government housing for poor folk. I think his emphasis on the FHA/HUD is going to be huge.
Posted by: Grand Old Party | Nov 26, 2008 2:17:24 PM
I need some leftover change baby.
Posted by: Hippie Smasher | Nov 27, 2008 5:29:37 PM
Caught the last few minutes of todays "This Week". Question for you, and this country's media in general. Why is it OK for your black female guest host (dont know her name) to comment about Ms. Palin's visit this coming week to Georgia to support the R senator running for election by saying "Georgia the state, not Georgia the country", as if to incinuate that Palin doesn't know the difference?IMAGINE IF THE SAME COMMENT WAS DIRECTED TOWARD A BLACK CANDIDATE FOR OFFICE, INCINUATIING THAT HE WAS STUPID OR NOT PROPERLY EDUCATED. I have one question for this RACIST guest host of yours...did she ever meet or speak with Ms. Palin, or is she like most of the rest of this ignorant, and lazy country's media, making her assumptions from unsubstantiated, biased so-called news reports? I voted for McCain, but fully support the peoples choice, Mr. Obama. Ms. Palin did not ask to be chosen, she did her best to rise to an impossible task, and showed nothing but dignity and grace in the face of horrid and immature personal attacks and innuendo. When will the childish unsubstantiated isults end toward Palin? ARE THE MEDIA AND THE DEMOCRATS (sorry to be redundant) THAT AFRAID OF THIS SO CALLED IGNORANT, COUNTRY WOMAN THAT THEY CANNOT STOP ATTACKING HER 3 WEEKS AFTER THE RACE IS OVER???
Posted by: shodanrich | Nov 30, 2008 12:08:49 PM
Banks can control their risks and yet they get TRILLIONS of bailout money. Insurance companies, auto makers, and mortgage lenders the same. Farmers, however, have no way to control their risks: weather, insects, resistant weeds, trade policies, exports, etc. They also cannot control the commodities market and yet are at the mercy of input vendors for fertilizer, nitrogen, etc. which has risen 150% in the past year. If all the subsidies are removed, then food prices will rise because farmers will go out of business each year. The "Farm Bill" of 2008 should have been called the Food Stamp BIll for Nonfarmers - almost 90% went into subsidy payments for nonfarmers. Attacking farmers is ridiculous - domestic food and fuel supply is critical. Everyone else gets a bailout - even when they take risks that they control. Why shouldn't we protect farmers against risks they cannot control? Farming is inherently risky but maybe we can do without food and import it all from other countries?
Posted by: Pat S. | Dec 1, 2008 3:33:33 AM
Hippie Smasher,
I agree with you that Palin was subject to some very harsh attacks, certainly some were unwarrented. Having said that, I must point out that I don't see any reason for you to call the guest host on "This Week" a racist. Is there any reason to support this claim besides the fact that she happens to be a black person talking about a white person?
Posted by: Molly | Dec 1, 2008 7:51:35 AM
I love how Obama lost all his support on internet blogs and forums like these.
I voted McCain, and with these national security issues popping up all of a sudden I am positive it was the right choice
However I agree with Obama here (Bush tried it first though) The domestic support program doesn't work. It in fact is the reason that 3rd world economies are not going any place fast.
Hurry up WTO and force the EU and us Americans to give up our export and domestic subsidies!
Posted by: Charly | Dec 2, 2008 9:48:35 PM
I just happen to live in the top county for collecting farm subsidies in the entire nation. The top two counties in terms of subsidy and disaster payments in dollar amounts are Lynn and dawson counties. These are neighboring counties both located in Texas. This is documented on a websight showing the actual dollar amounts each farmer has collected in recent years. I happen to know most of the farmers who collect these payments personally. Guess what folks not a single one of these farmers grow food!...They all grow COTTON! Furthermore the so called farmer who receives the most in subsidy payments is not a farmer at all... HE IS AN ATTORNEY! The farmers in this area intentionally plant in places that have absolutely no chance of producing a crop at all in areas that could not grow a weed in the wetest years. These farmers plant crops banking on disaster not production! furthermore each and every family member of these so called farmers regardless of age gender occupation or area they live in also receive personal farm subsidy checks for small and huge dollar amounts depending on the amount of acreage in which they are signed up for. These families are all secretly mega rich hiding funds in offshore accounts vacation homes in different cities states mutual funds ect. Non of the money these GOOD HARDWORKING PEOPLE receive is put back into community or locally except for maybe the brand new vehicles each family member purchases each and every year from the local dealership. The area cattle ranchers who produce actual food in the form of BEEF relying only on natural native grass and water to do so DO NOT! devastate the soil and atmosphere with deadly chemicals poisoning the very scarce water supply here as these cotton farmers do. Beef Ranchers receive little to nothing from the government in the form of subsidies. The subsidy program is one big SCAM in this area all money going to non food "farmers" planting bogus and often times nonexistant crops. I say lets subsidize only those who actually produce FOOD! Its funny that all the honest hardworking ranchers who seem to survive okay even though the price they receive for cattle at market is extremely low. Why cant the cotton farmers do the same or get a real job like everybody else.
Posted by: GETACLUE | Mar 2, 2009 8:20:50 PM
Personally i could care less if Obama was black,white , pink or even green with brown polka dots. He was against the bill and know that he's president it's all of a sudden a great idea. This is just away to somehow jump start his presidency. This is just going to make other families increase in poverty due to the fact that they can't pay bills due to the fact that they can't make enough profit. Obama better get on the same page and keep his promise to better America.
Posted by: Rechelle | Apr 9, 2009 12:24:53 PM
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