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ANALYSIS OF THE NEW FARM BILL–PROS & CONS

We have been outraged  about the cuts of SNAP benefits within the Farm Bill, but it’s not quite as bad as could have been.  Here’s some analysis from the NY times, plus more details  at the end  about the impact of the 4% cuts by the Center for Budget and Policy Priorities.

 House Approves Farm Bill, ending a 2-Year Impasse

NY Times  Editorial, Jan. 29 2014  Ron Nixon

Few bills of real substance emerge from today’s polarized Congress, and those that do tend to be misshapen lumps. They have enough useful provisions to win approval from Democrats, but are weighed down by the dangerous and occasionally bizarre demands of the many branches of the Republican Party.

That’s certainly the case with the $956 billion farm bill that passed the House on Wednesday with bipartisan support. It seems headed for approval by the Senate and the White House in the next few days. It makes some of the most significant reforms to wasteful agriculture subsidies in many years, and it contains dozens of important provisions designed to increase employment in rural areas and save lives with farsighted crop research. It preserves some important environmental protections, while cutting others. And though its food-stamp provisions were saved from being much worse, they will still reduce benefits for too many poor people.

On balance, the bill is clearly worthy of support, particularly because it will prevent austerity fanatics in future Congresses from gutting food stamps for the next five years. It will save $16.6 billion over a decade, or $23 billion if you count existing budget cuts imposed in the last two years. But endorsing the bill also means acknowledging the low expectations for real progress in Washington.

The most important reform in the bill is the elimination of direct payments to farmers, which provided cash subsidies in good years and bad, whether crop prices were high or low. This program was one of the worst abuses in the federal budget, and negotiators in the House and Senate should be commended for overcoming intense lobbying to preserve it, thereby saving $19 billion over 10 years.

To protect farmers from disaster in bad years, the bill moves $7 billion of that savings into a beefed-up insurance subsidy program, which is a better way of reducing risk. But that program is still too generous to big farmers. As the Environmental Working Group argues, the subsidies should have been means-tested. Reducing the insurance program’s size might have paid for more food stamps.

Negotiators took an important step by linking crop insurance subsidies to requirements that farms meet environmental standards, including soil conservation and wetlands protection. But a few smaller conservation programs were eliminated, and the overall amount spent on conservation was cut by $4 billion.

The bill also pays for research to improve crop yields and reduce plant disease that could have an important effect in developing countries, along with energy-efficiency programs and new manufacturing opportunities in agriculture-related businesses.

The most painful cut in the bill is the $8 billion reduction in food stamps over a decade. The effect of this is limited to 4 percent of recipients, or 850,000 families, who would lose about $90 a month.*[*More details below:] Most of them live in the 16 states that have taken advantage of a loophole in a utility-assistance program, receiving benefits that Congress did not intend. That loophole should have been closed, but not in such a precipitous way for needy families.

Nonetheless, the bill’s authors rejected the far worse cuts in the original House bill, which would have tossed 3.8 million people from the program. As the Center on Budget and Policy Priorities argues, rejecting the farm bill means rolling the dice that the next Congress will do a better job. In today’s environment, that’s a tough bet.

Additional details about the 4% cut in Snap funding::

*From the Center of Budget and Policy Priorities:

By Robert Greenstein  Jan.27, 2014

The SNAP cut that remains is a provision to tighten an element of the SNAP benefit calculation that some states have converted into what most people would view as a loophole.  Specifically, some states are stretching the benefit formula in a way that enables them not only to simplify paperwork for many SNAP households, but also to boost SNAP benefits for some SNAP households by assuming those households pay several hundred dollars a month in utility costs that they do not actually incur.  Congress did not intend for states to stretch the benefit rules this way, and longstanding SNAP supporters like myself find it difficult to defend.  Moreover, a future Administration could close off this use of the rules administratively, without any congressional action.

Two-thirds of states do not use the current rules this way, and no SNAP beneficiaries in these states are expected to lose any benefits under this provision.  Across the other one-third of states, CBO estimates that 88 to 89 percent of beneficiaries would remain untouched, while 11 to 12 percent would remain eligible for SNAP but face a benefit reduction because their state has used this practice to boost their benefits above what they would otherwise be.

Nationally, 4 percent of beneficiaries would face a benefit cut, CBO projects.  Over the coming decade, total SNAP benefits would be 1.3 percent lower as a result.  The 850,000 households that would lose benefits would, however, face a significant benefit reduction — costing them an average of $90 a month.

 

 

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