Here’s What Washington Really Does (Commentary via The Washington Post)

The Washington of conventional wisdom and the real Washington are two entirely different places. The Washington of conventional wisdom is overrun by well-paid insiders — lobbyists, lawyers, publicists — who systematically manipulate government policies to benefit corporations and the rich, defying the “will of the people.” The real Washington has government paid for by the rich and well-to-do. Benefits go mainly to the poor and middle class, while politicians of both parties live in fear that they might offend the “will of the people” — voters.

Recently, Ron Haskins of the Brookings Institution, a Washington think tank, testified before the House Budget Committee on the growth of the 10-largest “means tested” federal programs that serve people who qualify by various definitions of poverty. Here’s what Haskins reported: From 1980 to 2011, annual spending on these programs grew from $126 billion to $626 billion (all figures in inflation-adjusted “2011 dollars”); dividing this by the number of people below the government poverty line, spending went from $4,300 per poor person in 1980 to $13,000 in 2011. In 1962, spending per person in poverty was $516. 

Haskins’s list includes Medicaid, food stamps (now called the Supplemental Nutrition Assistance Program, or SNAP), the earned-income tax credit (a wage subsidy for some low-income workers), and Pell Grants. There are other, smaller programs dedicated to the poor. A report from the Congressional Research Service estimated the total number at 83; Haskins puts the additional spending on programs below the 10 largest at about $210 billion. The total of all programs for the poor exceeds $800 billion.

To be sure, some spending reflects the effects of the Great Recession. But most doesn’t. As Haskins shows, spending on the poor has increased steadily for decades. Consider food stamps. There are now about 45 million Americans receiving an average of $287 a month in food stamps, up from 26 million in 2007, according to a new Congressional Budget Office report. But the number in 2007, when the economy was healthy, was roughly 50 percent higher than in 2001.

And programs for the poor pale beside middle-class transfers. The giants here are Social Security at $725 billion in 2011 and Medicare at $560 billion. Combine all this spending — programs for the poor, Social Security and Medicare — and the total is nearly $2.1 trillion. That was about 60 percent of 2011 non-interest federal spending of $3.4 trillion.

You can debate whether all this spending is too much or too little. My point is different: These numbers speak volumes about our politics.

One lesson is that Washington really hasn’t been taken over by monied groups. In a democracy, even the rich are entitled to promote their interests. It’s true that their lobbyists and lawyers sometimes win lucrative tax breaks, subsidies or regulatory preferences. But as the spending numbers show, their influence is exaggerated, especially considering their tax burden. The richest fifth of Americans pay nearly 70 percent of federal taxes (included in this group, the richest 10 percent pay 55 percent), estimates the CBO.

The larger lesson is that, contrary to conventional wisdom, American politics have not become insensitive to the “the people.” In many ways, just the opposite is true. Politicians are too responsive to popular will. The real Washington is in the business of pleasing as many people as possible for as long as possible. There are now vast constituencies dependent on the largesse of the federal government. This is the main cause of huge “structural” budget deficits, meaning that they aren’t simply a hangover from the Great Recession.

There are many sophisticated theories today about why politics have become so polarized and immobilized. Ideologues have captured both parties, it’s said; primary challenges by right- and left-wing zealots doom centrists; cable television and the Internet favor simplistic, highly partisan rhetoric and argument. Political divisions are accentuated; consensus becomes harder. There’s something to these theories, but they also subtly misrepresent and excuse our present paralysis.

More promises were made than can be kept without raising taxes, which — for the most part — were also subject to bipartisan promises against increases. Almost everyone agrees that massive budget deficits pose a long-term economic threat, though no can be precise about how or when the threat might emerge. A central question about our political system is whether, after decades of making more promises to more groups, it can withdraw some promises to minimize the threat.

So far, the answer is “no.” Political leaders don’t lead. They take the path of least resistance, which has been to do little except to find scapegoats — “the rich,” “special interests,” “liberals,” “conservatives” — that arouse their supporters’ angriest antagonisms. It helps explain polarization. This is really what Washington does. It’s a demoralizing commentary on the state of American democracy.

 

Crop Insurance 101 (via The Hand That Feeds U.S.)

The National Crop Insurance Services (NCIS) has released the first of what is to be a series of educational videos explaining the importance of crop insurance and its functionality among American agriculture.

In this video, aptly titled “Crop Insurance 101,” Tom Zacharias, president of NCIS, reviews the history of the program, why it was created, and why Congress should “do no harm” to it in the upcoming Farm Bill.

Before crop insurance existed, Zacharias explains, disaster would strike and farmers would be forced to go to Congress for help. Congress would then have to pass disaster legislation and appropriate funds, which would then be passed on to the USDA where a program would be put in place to finally, pay the farmers whose crop had been destroyed.

But this whole process would take anywhere from one to three years, Zacharias explained, burdening not only the farmers who waited for the money to start planting again, but the taxpayers who had to pick up the pieces. And so, the public-private crop insurance program was born.

Today, farmers purchase crop insurance and, when disaster strikes, private insurance companies pay out indemnities within 30 days.

In 2011, Zacharias said, crop insurance companies had 265 million acres insured, 1.15 million policies issued and more than 125 different crops covered—resulting in $114 billion worth of protection for U.S. farmers.

This program allowed farmers who, in 2011 for example, sustained one of the worst weather years in history to bounce back and plant again this spring—receiving $10.4 billion in indemnities in 2011 alone.

“Crop insurance is at the forefront of modern-day farm policy,” Zacharias said in a statement released with the video. “For the vast majority of Americans who have very little to do with agriculture, this video could be their introduction to crop insurance.”

The video can be viewed by visiting http://www.youtube.com/watch?v=TixSJuOh6YM

United States Department of Labor Statement re: Withdrawal of Proposed Rule Dealing w/ Children Who Work in Agricultural Vocations

WASHINGTON — The U.S. Department of Labor today issued the following statement regarding the withdrawal of a proposed rule dealing with children who work in agricultural vocations:

“The Obama administration is firmly committed to promoting family farmers and respecting the rural way of life, especially the role that parents and other family members play in passing those traditions down through the generations. The Obama administration is also deeply committed to listening and responding to what Americans across the country have to say about proposed rules and regulations.

“As a result, the Department of Labor is announcing today the withdrawal of the proposed rule dealing with children under the age of 16 who work in agricultural vocations.

“The decision to withdraw this rule — including provisions to define the ‘parental exemption’ — was made in response to thousands of comments expressing concerns about the effect of the proposed rules on small family-owned farms. To be clear, this regulation will not be pursued for the duration of the Obama administration.

“Instead, the Departments of Labor and Agriculture will work with rural stakeholders — such as the American Farm Bureau Federation, the National Farmers Union, the Future Farmers of America, and 4-H — to develop an educational program to reduce accidents to young workers and promote safer agricultural working practices.”

Production Controls for Milk Divide Nation’s Dairy Farmers (via Minneapolis StarTribune)

WASHINGTON – Dairy farmer Dave Buck feeds his calves at 6:30 in the morning and 6:30 in the evening. He wants them to grow healthy on his land in Goodhue, Minn., so they produce as much milk as possible.

Now, Buck and thousands of other Minnesota dairy farmers and dairy food processors may have to choose between getting the most milk from cows or participating in a voluntary government system that ties insurance protection to accepting occasional production limits.

“A quota system is basically what it is,” Buck said. “It isn’t as good for Minnesota if we want to grow our industry.”

The goal of the proposed program is to protect farmers against losses and to eliminate big price swings, like the ones that drove a significant number of dairy farmers out of business in 2009. Whether that’s a good idea has fractured agriculture communities across the country, including Minnesota, the nation’s seventh-largest dairy state.

The Minnesota Milk Producers Association, of which Buck serves as vice president, came out against production limits. But many national and regional dairy farm trade groups support the measure, which was introduced in Congress by a longtime farmer ally, Seventh District Democratic Rep. Collin Peterson.

Some of the state’s biggest dairy processors are also divided. Jon Davis, whose family-owned Davisco International Foods processes 4 billion pounds of milk annually, traveled from Minnesota to Washington last week to testify against quotas at a House Agriculture subcommittee hearing. He called the program an “unnecessary and costly intrusion in my business.”

Meanwhile, the state’s dairy foods behemoth, Land O’Lakes, issued a statement in favor of the law containing production restrictions, calling it a “model for policy reform across agriculture.”

Why the disagreement? “A big part of this is whether you are planning to grow or stay the same,” said University of Minnesota agricultural economist Bill Lazarus. “It looks like it penalizes people who are planning to grow.”

 The full story can be accessed by visiting http://www.startribune.com/business/149301995.html

Statement of Jon Davis (Davisco) Before the Subcommittee on Livestock, Dairy and Poultry Regarding Dairy Programs

Thank you for the invitation to testify today on behalf of the International Dairy Foods Association. IDFA has over 230 dairy food company members and represents over 85% of the ice cream, cheese and bottled milk that is processed and marketed in the United States. IDFA members employ over 120,000 employees at hundreds of production plants across the country. IDFA represents large well-known food companies like Nestle and Kraft but also small businesses like the Ice Cream Club located in Boynton Beach, Florida.

Around the world, governments are making notable changes to domestic and trade policies affecting their dairy industries. The European Union is in the final phase in its effort to reform dairy policy, which will include phasing out farm-milk quotas by the end of 2014. Australia ended federal dairy-support programs and eliminated its classified pricing scheme in 2000. New Zealand became the fastest growing dairy exporting country during the past 30 years after eliminating dairy supports.

The combination of these policy reform efforts and increased international demand for dairy products has allowed the United States to become a major dairy exporter. Less than 10 years ago, the United States exported about 5% of U.S. milk production in the form of dairy products, mostly the result of government export subsidies under the Dairy Export Incentive Program. In recent years, exports have grown to be over 13% of U.S. milk production, without significant government export assistance.
 

Dairy processors, including Davisco, have invested hundreds of millions of dollars in the last few years in order to take advantage of these new markets. This has been a remarkable success story and dairy is clearly helping our nation’s economy recover from the recent downturn. Last year, we had a dairy trade surplus of $2.4 billion. According to USDA, every $1 billion of trade surplus creates over 8,000 jobs in this country.

Export demand is growing at a much faster rate than domestic demand for dairy products. Last year, total fluid milk sales were down 1.7% as the economic pressure on consumers has led them to purchase fewer gallons of milk and move to cheaper milk alternatives. In fact, fluid milk sales are facing an extended and unprecedented decline in year-over-year sales. This is unfortunate, because milk is one of the few beverages containing nine essential nutrients.

Demand for raw milk has continued to increase over the last few years. But, let’s be clear on what is driving that increased demand. Between 2003 and 2011, only 37% of that increase was due to domestic demand. Increased export sales, due to our dairy industry’s successful and somewhat newfound ability to compete in international markets, has been driving the majority of our industry’s growth for dairy farmers and processors over the last few years.

The testimony of Mr. Davis can be read in its entirety by visiting http://agriculture.house.gov/pdf/hearings/Davis120426.pdf

Update: Senate Agriculture Committee 2012 Farm Bill Markup

After a 24-hour delay, the Senate Agriculture Committee began marking up their version of the 2012 Farm Bill – otherwise known as the Agriculture Reform, Food and Jobs Act of 2012 – this morning.  The proposed bill is estimated to achieve $24.7 billion in deficit reduction – including approximately $15 billion in commodity program savings.  The legislation would eliminate direct and   payments, as well as the Average Crop Revenue (ACRE) and Supplemental Revenue Assistance (SURE) programs.

Dairy programs would also see dramatic changes.  The Dairy Product Price Support (DPPS), Milk Income Loss Contract (MILC) and Dairy Export Incentive (DEIP) programs would be repealed.  Instead, a dairy production margin protection program and a supply management program (otherwise known as dairy market stabilization) would be instituted.  In addition, the Dairy Forward Pricing Program, Dairy Indemnity Program, Dairy Promotion and Research Program would all be extended – as would the Federal Milk Marketing Order Review Commission.

In her opening statement, Chairwoman Debbie Stabenow (D-MI) noted that committee markup is the first step in a long process and that members continue to work to strike a balance between regions and commodities vis-a-vis the commodity title.  Amongst the highlights articulated by Senator Stabenow was that the bill being considered by the committee included; a stronger risk management program, a permanent baseline for livestock disaster assistance programs, reduced the complexity of conservation programs and streamlined rural development programs by rescinding authorization of fifteen programs – programs that have been authorized but never received finding or been fully utilized.

However, the concerns that had initially delayed the committee markup surfaced during opening statements.  Senator Richard Lugar (R-IN) expressed his concern that the commodity title revisions included in the Manager’s amendment late Wednesday night had not yet been scored by the Congressional Budget Office (CBO). 

Senator Saxby Chambliss (R-GA) stated that “The bill before the committee is neither equitable nor fair” in that crops such as peanuts and rice would be left with no safety net, whereas crops such as corn and soybeans would derive greater benefits from a revenue assistance program.  Senator Chambliss believes the bill lacks balance and that the safety net will not be there when farmers really need it, thereby leading him to state that it would be unlikely he would support the bill.

Despite the concerns related to the commodity title, the committee was able to swiftly move through a number of titles – with the objective of moving the bill out of the committee late in the day.

Copyright © 2012 RDL & Associates, LLC.  All rights reserved.

Farm Bill Markup Proceeds Despite Opposition from Southern Senators (via The Hill)

The Senate Agriculture Committee began marking up a five-year farm bill on Thursday despite opposition from Southern senators worried about how the bill could hurt peanut and rice farmers.

The markup initially was delayed to try to work out differences, but lawmakers forged ahead Thursday and expect to report out the bill by the end of the day.

Sen. Saxby Chambliss (R-Ga.) told the meeting he was still unlikely to support the bill, given an insufficient safety net for his producers. Sen. John Boozman (R-Ark.) said the bill will “have a devastating impact on Southern ag.”

Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) said that she will continue to work with Chambliss and Boozman to change the bill as it moves to the floor.

“This is just a first step,” she said.

Sen. Chuck Grassley (R-Iowa) said his support was gained by last-minute changes to the bill that prevent farm subsidies from going to “doctors, lawyers and celebrities.”

To secure the votes of Sens. Kent Conrad (D-N.D.) and Dick Lugar (R-Ind.), Stabenow is now backing an amendment to would provide funding for biofuels.

The Congressional Budget Office estimates Stabenow’s bill would cut $26.4 billion from the deficit over 10 years. The White House and House Republicans had wanted greater cuts to farm subsidies.

Stabenow defended her legislation, saying “The era of direct payments is over.” She noted that the bill abolishes controversial payments to farmers who no longer produce anything.

Ranking member Pat Roberts (R-Kan.) said that commodity groups were unfairly distorting the debate over the bill. He touted the bill’s crop insurance programs and noted that even wheat producers in his home state will have to adjust to the end of direct payments.

“If all you did was listen to these groups you would think we are robbing Peter to pay Paul,” he said.

Conrad said that deficit cuts in the bill should be lauded.

“This is a win for taxpayers, a win for reformers, a win for the economy of America,” he said. He added that critics of farm programs are wrong to say that the bill overwhelmingly benefits big agribusiness.

While Chambliss was critical of the rice and peanut protections in the bill, he said that he was hopeful a new insurance program for cotton will end a costly World Trade Organization dispute with Brazil which currently has the United States paying Brazilian farmers millions of dollars in penalties. The new “STAX” program would replace counter-cyclical payments that the WTO found to be trade-distorting.

House Subcommittees Begin D.C. Hearings on 2012 Farm Bill

The House Agriculture Committee has begun hearings on their version of the 2012 Farm Bill via the subcommittee structure.  Unlike the United States Senate, subcommittees tend to be more active in the process and will hear testimony prior the the full committee “marking up” legislation.

The first House Agriculture Subcommittee hearing was held Wednesday, April 25th by the  Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture to review rural development programs.  The press release is below.

Please contact Dave Ladd with RDL & Associates with questions or comments.

________________________________________________________________________________________________________

FOR IMMEDIATE RELEASE:
April 25,  

CONTACT: Tamara Hinton, 202.225.0184
tamara.hinton@mail.house.gov

Subcommittee Kicks Off DC Farm Bill Hearings
with Focus on Rural Development Programs

WASHINGTON – Today, Rep. Timothy V. Johnson, Chairman of the House Agriculture Committee’s Subcommittee on Rural Development, Research, Biotechnology, and Foreign Agriculture, held a hearing to review U.S. Department of Agriculture (USDA) rural development programs in advance of writing the 2012 Farm Bill. This is the first of eight hearings, which will be held by the Subcommittees to hear from agricultural stakeholders before the House Agriculture Committee begins drafting the reauthorization of agricultural programs.

 
Witnesses at today’s hearing provided feedback on the programs administered by USDA’s Rural Development agency, which includes the Rural Business and Cooperative Service (RBS), the Rural Housing Service (RHS), and the Rural Utilities Service (RUS). Members heard from two panels of witnesses who explained how programs can be improved to increase their effectiveness. Further, witnesses testified that continued investments in water, energy, and broadband infrastructure are vital for enhancing the quality of life and economic opportunities for individuals living and working in rural communities.

“Getting our debt under control will take shared sacrifice. Every single component of federal spending needs to be examined for efficiencies and savings. As the Committee considers how to reauthorize current programs in the next Farm Bill, it’s important to seek ways to weed out activities and authorities that are either redundant or ineffective. In doing so, these programs would be made more accessible to applicants, reduce USDA’s administrative burden, and focus program resources on core responsibilities,” said Chairman Timothy V. Johnson (R-IL).
“Over 50 million people call rural America home, and if we truly want to build a 21st century economy, they must be part of the solution. Rural communities rely on the rural development programs to provide and modernize services and facilities. As we move forward with the 2012 Farm Bill, we are trying to target and leverage funds where they can be most effective,” said Ranking Member Jim Costa (D-CA).
Written testimony provided by the witnesses is linked below. More information regarding the 2012 Farm Bill process can be found here.

Witness List:

Panel I

The Honorable Charles F. Conner, President and CEO, National Council of Farmer Cooperatives, Washington, D.C.
The Honorable Donald Larson, Commissioner, Brookings County, South Dakota; on behalf of the National Association of Counties.
Ms. Leanne Mazer, Executive Director, Tri-County Council for Western Maryland, Frostburg, Maryland; on behalf of the National Association of Development Organizations.

Panel II

Mr. Frank Dunmire, Executive Director, Illinois Rural Water Association, Taylorville, Illinois; on behalf of the National Rural Water Association.
Mr. Robert Stewart, Executive Director, Rural Community Assistance Partnership, Washington, D.C.
Mr. David Rozzelle, Executive Vice President, Suddenlink Communications, St. Louis, Missouri; on behalf of the National Cable Telecommunications Association.
Mr. Mark Bahnson, CEO & General Manager, Bloomingdale Communications, Bloomingdale, Michigan; on behalf of the National Telecommunications Cooperative Association.

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Dairy Provisions Fail to Address Concerns of Minnesota Dairy Farmers (via Minnesota Milk Producers Association)

The Minnesota Milk Producers Association (MMPA) has voted to oppose the dairy provisions contained in the draft 2012 Farm Bill that has been released by Senate Agriculture Committee Chairman Debbie Stabenow (D-MI).  The organization’s press release is published below.

_____________________________________________________________________________________________________

MINNESOTA MILK PRODUCERS ASSOCIATION                                                                                                                        NEWS RELEASE
108 Marty Drive, Suite 2 – Buffalo, MN 55313
Phone: (763) 355-9697; Fax: (763) 355-9686
www.mnmilk.org
FOR IMMEDIATE RELEASE                                                                                                                                                                Contact: Bob Lefebvre
April 24, 2012                                                                                                                                                                                          E-Mail: mmpa@mnmilk.org

DAIRY PROVISIONS FAIL TO ADDRESS CONCERNS OF MINNESOTA DAIRY FARMERS

(Buffalo, MN, April 24, 2012) –The Minnesota Milk Producers Association (MMPA) Board of Directors has voted to oppose the dairy provisions contained in the draft 2012 Farm Bill released last Friday by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI). MMPA, which represents Minnesota dairy farmers, believes the bill does not adequately address the challenges facing Minnesota’s dairy farmers.

“We have been waiting to see legislative language which was finally released last Friday,” stated Pat Lunemann, MMPA President. “Since Friday, our leadership has had discussions with our membership and captured input from experts. While we do appreciate the work Chairwoman Stabenow has done to this point, changes are still warranted,” concluded Lunemann.

The proposed legislation must remove all language referring to “Milk Stabilization”. MMPA’s first priority is the long-term success of Minnesota dairy farmers. One major component of achieving this priority is to ensure that our dairy farmers have a solid infrastructure. Analysis of the current Senate language would force Minnesota dairy farmers to cut up to 6% of milk production – Today. Cutting back on production at a time when our Minnesota processing plants need more locally produced milk is a step in the wrong direction.

If our processing plants are required to cut back even more on their current levels of local milk, they may be forced out of business. If, or when that would happen, our Minnesota dairy farmers lose more infrastructure, leading to further decline in an industry that adds over 40,000 jobs and over 11.6 billion dollars of economic impact to Minnesota alone(1).

Second, while we applaud the inclusion of a margin insurance program for dairy in the proposed farm bill, it is not actuarially sound at the higher coverage levels. The premiums for higher levels of coverage must be adjusted. The premiums are currently structured in a manner that creates extra incentives for certain producers to keep producing more milk in order to receive hefty margins via insurance payments from the United States Department of Agriculture (USDA).

Third, dairy farmers deserve promised market reform. There is very little in terms of market reform in the proposed legislative language. The United States dairy industry must move toward a two tiered pricing system and it must move toward a competitive pay price. Also, there is no language that would put California under the Federal Milk Market Order system.

MMPA has remained consistent in describing the principles of a strong safety net for dairy farmers, including risk management without supply management and market reform for all US dairy producers with more transparent price discovery. The opportunity to achieve these principles exists within the context of the current Farm Bill debate.

(1)Minnesota Dairy Industry Profile, Su Ye, Minnesota Department of Agriculture 2011.

Minnesota Milk Producers Association serves as the “Voice of Minnesota’s Dairy Industry”, a grassroots organization for the industry with an elected board of dairy producer directors. Its mission is to advance the success of Minnesota dairy producers.

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5 Things The Early Polls Tell Us About The Obama-Romney Matchup (via Los Angeles Times)

By Michael A. Memoli

April 20, 2012

The unofficial start of the general-election campaign a week ago triggered a deluge of public polling on the President Obama-Mitt Romney matchup as quickly as research firms could crunch the data. Ten major outlets have now reported numbers. So what do we know so far?

For starters, you may not be surprised to learn that it’s expected to be a close race. The top-line numbers — that is, the head-to-head matchup between the Democratic incumbent and his likely GOP challenger — range from a 9-point lead for Obama (CNN/Opinion Research Corporation) to a 5-point advantage for Romney (Gallup).

The latest poll of the bunch, from NBC News and the Wall Street Journal, puts Obama ahead, 49% to 43%. A composite of recent polls from Real Clear Politics gives Obama, on average, a nearly 3-point lead.

Those early top-line numbers are getting most of the attention, but at this stage the campaigns are more interested in what the deeper data show. And though each survey has a different overall result, there are areas of consensus among them that point to the candidates’ main strengths and weaknesses, and the nature of the November electorate.

The  full story can be accessed by visiting http://www.latimes.com/news/politics/la-pn-what-the-obama-romney-polls-tell-us-about-race-20120418,0,6501324.story