Says ending the direct payment farm subsidy program "could save up to $28.4 billion over ten years that could be used to reduce the deficit."
Earl Blumenauer on Friday, December 21st, 2012 in in a news release
Rep. Earl Blumenauer says cutting direct subsidies to farmers would save $28.4 billion over 10 years
With Congress’ tendency to sidestep the really difficult questions on spending and deficits, even old statements remain relevant and worthy of examination. That’s what happens when the country is governed in two-month increments.
So once again Congress is sweating mandatory, across-the-board spending cuts called "the sequester" unless they are able to intervene between now and March 1. And yes, the matter was supposed to be settled. It remains because Congress enacted only a temporary fix. So for PolitiFact fact checkers everywhere, we express our bemused but sincere thanks for the budgetary gift that keeps on giving.
It’s also the reason a statement Rep. Earl Blumenauer made in December is still relevant as Congress looks at ways to avoid $109 billion in automatic spending cuts that begin in March.
"This is why I've worked to end the wasteful direct payment farm subsidy program that funnels payments to large corporate agribusinesses. This action could save up to $28.4 billion over ten years that could be used to reduce the deficit," the Oregon Democrat said in a Dec. 21, 2012, news release.
That’s a lot of money at a time when Congress is desperate for big numbers.
But is the number real? Let’s take a look.
Trimming back or totally eliminating farm subsidies is one of the most popular ideas for cutting federal spending.
President Barack Obama called for eliminating them in 2011, at a savings of $5 billion a year. Blumenauer has long been one of the most outspoken critics of the payments that provide federal dollars to recipients. The payments pour forth, according to the taxpayer watchdog group Taxpayers for Common Sense, "regardless of current crop prices, and there’s not even a requirement these crops actually be grown on the land receiving payments."
It’s time to change, Blumenauer says, especially now when farm incomes are near record highs and the blunt, inefficient nature of the subsidies qualifies even rich "city slickers" such as investment CEO Charles Schwab for payments. It’s not isolated. Five hundred fifty-one people with Portland addresses collected farm subsidies totaling $2.8 million in 2010, the Environmental Working Group found using federal records.
Those recipients are part of an agriculture "safety net" erected in 1996 that, in this case, provides payments to farmers (both genuine and hobby) who raise wheat, corn, rice, soybeans, cotton and peanuts. The Congressional Budget Office calculated that ending those subsidies would save $28.4 billion over 10 years. Blumenauer wants that money diverted from what he says are stable and profitable companies to paying down the nation’s $1.1 trillion deficit.
The politics are jumbled since legislation that would trim direct payments passed the Senate last year but never came to a vote in the House. But the number is solid. It was generated by the Congressional Budget Office at the request of then-Rep. (and now Sen.) Jeff Flake, R-Ariz., who introduced legislation in 2011 to eliminate direct payments to farmers.
If you need help breaking the code, direct payments are federal payments made to qualifying producers "paid at a set rate every year regardless of conditions."
The merits of the program can be debated and the politics will remain tangled. But just as farmers return to the field every spring and seeds sprout into crops by summer, Blumenauer’s numbers are certain and correct. For that reason, we are this claim: True.