As the Taxpayers Protection Alliance (TPA) continues to follow developments on the Farm Bill, including the bill clearing the Senate Agriculture Committee yesterday, TPA President David Williams sent a letter to the House Agriculture Committee yesterday in response to a proposed amendment weakening oversight of the wasteful Rural Utilities Service Broadband Loan Program. The letter outlines opposition to the program and calls on the committee to reject an amendment offered by Rep. Chris Gibson (R-N.Y.) and Rep. Kurt Schrader (D-Ore.) further providing taxpayer funding to a program rife with problems. When it comes to wise use of taxpayer dollars, RUS has a troubled history. RUS's primary goal is to provide loans to help bring Internet broadband service to unserved rural communities, which are generally defined as communities with populations of less than 20,000. In a March, 2009 report by the U.S. Department of Agriculture's (USDA) Office of Inspector General (OIG) observed that while the 2008 Farm Bill modified the broadband program and narrowed the definition of "rural area," the RUS continued to issue loans in exurban and suburban areas. Also, according to a report by the USDA on April 23, 2012, "We found that RUS had not maintained its focus on rural communities most in need of Federal assistance. This is largely because its definition of 'rural area,' although within the statutory guidelines, was too broad to distinguish between suburban and rural communities. As a result, RUS issued over $103.4 million in loans to 64 communities near large cities." TPA will continue to monitor this and other provisions in the Farm Bill.
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As the House and Senate ramp up their work on the Farm Bill, the Taxpayers Protection Alliance (TPA) will be in high alert so taxpayers won’t be left with a laundry list of wasteful programs that have amounted to nothing more than cronyism and corporate welfare run amuck. One issue in particular that is emblematic of what is wrong with agricultural policy is the U.S. sugar program, which is prime for reform. From import quotas to purchasing excess sugar to keep prices artificially high, the sugar program is just one massive corporate welfare program. Led by the Competitive Enterprise Institute, TPA was proud to sign onto a letter with nine other taxpayer and free market organizations opposing sugar subsidies.
Led by Heritage Action For America, the Taxpayers Protection Alliance joined with other taxpayers and free-market organizations representing millions of individuals across the nation to oppose wasteful spending in the Farm Bill. The Senate and House appear ready to start legislative work on the Farm Bill as early as this week, and it is important to call attention to the habitual waste of money that has become too commonplace in the Farm Bill. There is tremendous need for reform. Current subsidy programs are rooted in the 1930s, when prices for crops and livestock bottomed out and farm families were desperate for income. Agriculture today could not be more different. Farmers are pulling in record-high levels of income and carrying record-low levels of debt. Technology has eliminated many of the risks that once plagued farming, and the profitability of crops that go without subsidies demonstrates that independent agriculture is viable. So there is just no way to justify funneling tens of billions of dollars to farmers who, by and large, are better off than most of the taxpayers who are shelling out the subsidies. The letter highlights twelve of the most egregious examples of waste to taxpayers. The groups are urging both Chambers of Congress to not continue to spend trillions of dollars on what amounts to simply a laundry list of “subsidies, welfare payments, and environmental patronage.”
Albert Einstein described insanity as “doing the same thing over and over again and expecting different results.” President Obama should take note. The Daily Caller recently had a story detailing how Obama’s budget makes the case to permanently extend carve outs and favoritism for the green energy industry. Specifically, the White House’s 2014 budget calls for “$23 billion for incentives for renewable energy production and energy efficiency programs over the next decade. An additional $2.5 billion in tax credits would be given to companies that invest in advanced energy manufacturing projects, such as facilities for green energy manufacturing — bringing the total amount of clean manufacturing tax credits to $4.8 billion when combined with credits from the stimulus package.” Thankfully presidential budgets really have no teeth to them – in that they don’t have the power to control the appropriation of funds – but they do offer great insights and an indication of what the president’s priorities are and where he’s allocating his political capital.
Today, the Taxpayers Protection Alliance joined with 16 other free market and taxpayer groups to urge strong support of S. 446 and H.R. 943, the “Crop Insurance Subsidy Reduction Act,” sponsored by Sen. Jeff Flake (R-AZ) and Rep. John Duncan (R-TN), respectively. This common sense legislation would scale back crop insurance premium subsidies, the cost of which has skyrocketed in recent years, to the more responsible levels that prevailed prior to a massive expansion in 2000. In doing so, it would provide a modest down payment on desperately needed fundamental reforms to U.S. agricultural policy. In 2011, taxpayers paid an average of $62 out of every $100 in crop insurance premiums, with farmers only needing to cover the remaining $38 out of pocket. This extraordinarily generous subsidy has led to extremely high costs for taxpayers. From 2001 to 2012, the total cost of premium subsidies jumped four-fold from $1.8 billion to $7.5 billion. The Congressional Budget Office projects even higher costs in the future, averaging $9.1 billion annually. Limiting these subsidies to the levels that prevailed in 2000 would essentially reverse the aforementioned ratio, with taxpayers covering an average of $37 out of every $100 in premiums and farmers covering the remaining $63. Even a modest reform like this yields huge savings, as CBO estimates the Crop Insurance Subsidy Reduction Act would reduce the burden on taxpayers by $40.1 billion over the next decade.
On February 14, 2013, the Taxpayers Protection Alliance joined with nine other taxpayer and free market groups to urge Congress to take common sense steps to reform federal supports for agriculture and save taxpayers at least $100 billion over the next decade. The 113th Congress has a prime opportunity to reduce the federal government’s meddling in the agricultural sector while helping to pay down our $16 trillion national debt. A number of common sense steps can be taken to create a more accountable, responsive, and cost-effective agricultural policy. Despite the 2012 drought being one of the most severe in history, the agriculture industry “suffered” with near-record profits. Given today’s extraordinarily high commodity prices and farm profits and our monumental fiscal crisis, agriculture subsidies should be reduced by at least $100 billion over the next decade. Federal supports for agriculture must be evaluated on their own merits. Though explosive growth in nutrition programs, particularly the Supplemental Nutrition Assistance Program (SNAP), must be addressed, that discussion must not be used to sidetrack necessary reforms to federal subsidies to agricultural businesses. Congress must consider changing the law under which America operates in the absence of a new farm bill. The current fallback, the horribly outdated Agricultural Act of 1949, forces taxpayers to decide between Farm Bills with inadequate reforms or reverting to even more detrimental World War II-era law.
President Barack Obama has spent much of the campaign touting his “all of the above” energy strategy — a proposal which, to hear him explain it, will reduce America’s reliance on foreign oil, save families and businesses money at the pump and position the United States as the global leader in clean energy.” Sounds great, right? Almost too good to be true? That’s because it is. Obama’s “all of the above” energy scheme will actually pump billions of tax dollars into economically unjustifiable green energy schemes, attacks America’s coal industry, limit domestic energy exploration, and raises the cost of products and services through a series of mandates and taxes. Worst of all, Obama’s plan to tinker with fuel mileage regulations would actually kill thousands of Americans.
A September 10, 2012 Reuters’ article reported that, “Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds… There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.” These figures add a whole new batch of concerns and questions about the effectiveness of the Obama administration’s green energy crusade. In looking at these numbers it’s natural to ask, how on earth would any company continue to produce cars that are falling far below projected sales and cost so much to make. It is easy to do when you’re backed by the full faith and credit of the U.S. government. The trouble is that this one meaningful and reassuring phrase doesn’t carry close to the amount of weight it once did. In part this can be attributed to the current administration and its derelict actions like the decision to bailout General Motors (GM), which has put the government, and taxpayers, in a precarious position.
Like the child who just isn’t quite ready to move out of his parents’ house so too does the wind industry plead with Congress to let its lucrative subsidy stay just a little bit longer. The weak argument that the child and the industry use is nearly identical. Something to the effect of: Because this time things will work out, with just a little more money this time will be different, this time is the time they’ll make it on their own. Taxpayers shouldn’t believe it whether it is a relative at the door or Congress extending production tax credits to the wind industry. The argument the wind industry makes is that it is a sector of the economy with tremendous potential and is so close to being commercially viable. In order to make that a reality it needs just this teeny handout to help it stand on its own two feet. The additional funding which will provide the push it needs to make it competitive in the market. The promise is that a subsidy, such as the wind production tax credit, will be just the ticket that’s needed to take the industry over the valley of death to an economically viable company that produces a competitive and clean source of energy. The argument the wind lobbyists make today is nearly verbatim to what they said back in 1992. Just take a look at this 1992 New York Times article, “A New Era for Windmill Power.” The piece explains that “striking improvements in technology, the commercial use of these windmills, or wind turbines as the builders call them, has shown that in addition to being pollution free, they can now compete with fossil fuels in the cost of producing electricity.” The obvious question then is if that was true in 1992, then why did wind ever need a tax credit? A full 20 years have gone by and only 2 percent of our nation’s energy comes from wind.