
I don't normally write up little political hits. This post is not exactly an exception, because I'm going to make a larger point. But I want to start with the political hit, because it really helps.
The Congress passed a Farm Bill yesterday. Here's a geographically appropriate link to the Des Moines Register story about the passage. Veto-proof majority, a natural in an election year, when farmers (or big agriculture?) soar in significance as the last group of people with an intact blue collar stereotype, solid representation in Congress and new importance in the wake of a global food crisis.
President Bush wants to veto the bill. Here's the secretary of agriculture, apparently a man named Ed Schafer:
"At a time of record farm income, Congress decided to further increase farm subsidy rates, qualify more people for taxpayer support, and move programs toward more government control."
(Schafer's been on the job for about five months and he's President Bush's third ag secretary, FYI.) I thought that quote was interesting. The big concern appears to be that commodities prices are so high, farmers are earning a lot of money for growing the same thing they've always grown. So why increase subsidies to $40 billion?
It's a good question, and I'll come back to it when I'm making my point in a moment.
In February, the House of Representatives voted on a piece of legislation that would curtail about $18 billion worth of tax breaks for oil companies. Tax breaks don't have the exact same affect as subsidies, but on the balance sheets at the end of the day, both of these numbers represent money the US treasury doesn't have.
It nearly goes without saying, President Bush announced he would veto the legislation. Of course, the two industries aren't in perfect sync, but the White House argument that the farmers are making a lot of profits right now would seem also to apply to oil companies. (That link notes that ExxonMobil earned -- profits not revenue -- $1,300 per second for every second of 2007.) What's the difference?
Could it be something as small as the fact that nobody in this administration is running for re-election, and farm friends you take care of while you're in office, but oil friends are forever? Maybe the White House argument, that ending the oil company tax breaks singles out one industry for taxation, makes secret sense somehow, but I can't find it. We tax one industry, one country's exports, one class of goods all the time. The tax code is a wily thing.
In truth, it's rank disingenuous behavior, probably, pure and simple. This president has suddenly rediscovered fiscal restraint as the sun sets on his time in office, but that goes as far as farms but apparently doesn't extend to ExxonMobil
That was the political hit, here's the point: Don't let it be said I'm arguing for preserving farm subsidies. Far from it. If anything, they're worse because not only will they cost me and my children (and their children) billions of dollars forever, they strangle the chances of millions of farmers and potential farmers around the world who -- even as the world prices of food products surge -- still can't compete with subsidized farm goods from the richest country in the world. De facto subsidies to oil companies ring hollow as well, for self-evident reasons. More than anything, are we as a nation in a position to be giving away money to the industries doing the best while others -- people and companies inside the United States -- struggle?
And worse yet, the collateral damage from these warring vetoes presented wonderful opportunities now gone. The legislation reversing oil company subsidies would dedicate the new revenue to non-biofuel renewable resources like wind and solar power, a long overdue commitment. There were little, useful glimmers of hope in the president's scaled down farm bill: As another sometime-member of the Administration, Greg Mankiw, notes in his blog, President Bush proposed freeing a portion of US food aid dollars from the onerous requirement that they be spent on US goods, and instead be directed to buying goods in more local markets to provide food aid. That could mean helping hungry people in Africa by feeding them AND by contributing to their economy. This is opposed to the current situation, where US food is transported at a high cost to feed people while simultaneously contributing to the depressed economic situation that helped make them hungry in the first place.
Maybe next farm bill, in 2013.
Corn photo courtesy of Flickr user Romanlily and used under Creative Commons.