A Model for Social Security Reform

IRVINE VALLEY COLLEGE

MARTHA STUFFLER

PROFESSOR of ECONOMICS
SOCIAL and BEHAVIORAL SCIENCES
DEPARTMENT OF ECONOMICS

Email Mstuffler@ivc.edu Phone 949-451-5759

Green Acres
December 11, 2007; Page A26

Here's today's quiz: What do Scottie Pippen, David Letterman and Ted Turner have in common? Answer: None of them are farmers, but all three have received thousands of dollars in federal farm subsidies this decade.

We could add to that list of non-farmer farm-aid recipients David Rockefeller, Leonard Lauder of the cosmetics firm, Edgar Bronfman Sr. of the Seagram fortune, and Microsoft cofounder Paul Allen. Our point is that you don't have to drive a tractor, plant seeds, or even live anywhere near rural America to qualify for Uncle Sam's farm largess. And you sure don't have to be poor.

The Environmental Working Group has a map of New York City making the rounds on the Internet that shows 562 dots, each representing a Manhattan resident who gets a USDA farm payment. Who knew that growing cotton, corn and soybeans was such a thriving industry near Central Park? We don't know the incomes of these people, but it's a fair guess they're not homeless.

What we have here is a real-life version of the 1960s TV show "Green Acres," but in reverse. In the fictional series, Eddie Albert and Eva Gabor play a fancy couple who flee Manhattan to live down on the farm among the pigs and goats, while she pines for the glitter of Times Square. In the 2007 version, they flee the farm for Manhattan and get a subsidy check at their Park Avenue penthouse. What a deal.

Washington refers to these people as "absentee farmers." They own the land and collect the subsidy checks, but few do any actual farming. It is true that the farmers who lease the acreage in Illinois, Iowa or Kansas are usually far from rich (though the per capita income of farmers is higher than the median family income). But studies indicate that the subsidies provide little financial benefit to these tenant farmers, who grow and harvest the crops and put food on our table. Most studies agree that the subsidies are capitalized into the price and rental value of the land. So the more generous the farm payments, the higher the rents that the absentee farmers in New Yorkers can charge.

The most recent USDA records, catalogued by the Environmental Working Group, indicate that some 260 farm establishments will receive $1 million or more under the farm bill now in the Senate. Many of these are giant agribusinesses, not family farms, and some aren't farms at all. Arizona, Purdue and Illinois universities are each scheduled to receive seven figure subsidies through 2012. Some of the crop payments to the Farming Illini are used to underwrite the school's marching band.

Some recipients are even Members of Congress -- including six Senators and a handful of House Members who have received a combined $6 million in subsidies over the past decade. Jon Tester, the newly elected Montana Senator, has received more than $300,000 over the past decade. The family of Iowa Senator Charles Grassley has received more than $200,000.

Colorado Senator Ken Salazar assails President Bush's threatened veto of the farm bill as "immoral." What he doesn't say is that his potato farming brothers, including Congressman John Salazar, received $43,104 in farm subsidies from 2003 to 2005, and they will get more if the bill is passed.

So what is it about farm bills that turns Republicans into socialists and Democrats into defenders of welfare for the rich? One answer was offered by Ken Cook, president of the Environmental Working Group: "Democrats are so reliant on their ability to compete with Republicans for the farm vote that many are reluctant to push any income limits at all. It's very hypocritical."

Democrats will get a chance to prove him wrong when the $290 billion farm bill comes to the Senate floor, perhaps this week. Minnesota Senator Amy Klobuchar wants a vote on her amendment to stop payments for farm households with incomes above $750,000. This is a far cry from the $200,000 cap proposed by Mr. Bush, whom Democrats decry as a "protector of the rich." Yet Ms. Klobuchar's superrich income cap is still opposed by many Senators in both parties. Meanwhile, in the House, the farm bill passed with a $2 million income cap. It seems only yesterday that Speaker Nancy Pelosi said Democrats would end policies that benefit the rich over the middle class.

Farm bills come around every five years, so this is the best chance in years for reforms that reserve farm payments for the truly needy. That this is proving so hard to accomplish tells us a lot about how this Congress puts politics over principle. About 65 cents of every farm payment dollar goes to the wealthiest 10% of farmers. Where is that Democratic devotion to class warfare when we really need it?

Green Acres December 11, 2007; Page A26

Green Acres
December 11, 2007; Page A26