Ag Cuts

June 23, 2011

Hello everybody out there in farm country.  This radio commentary is brought to you by the Renewable Fuels Association, Wal-Mart Stores, Monsanto, and John Deere.  They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America.  Thank you.  

And now for today’s commentary—  

The ax did fall on ag spending in the House.  Another sharp ax fell on ethanol subsidies in the Senate. 

The massive unsustainable debt has Members of Congress doing things they never have done before.  They seem to be willing to deny many of their constituents the handouts they have always expected.   

The House ag spending bill for next year cuts $2.7 billion of discretionary spending.  Money is taken away from all the food assistance programs, including food for women, infants, and children and Food for Peace.  The hunger lobby is furious.  The fight is not over.  The Senate will no doubt change the spending plan.  The House bill was passed without one single Democratic vote.  The Senate, controlled by the Democrats, will have an entirely different take on the issue. 

Historically, the food groups would help the  farm groups get funding and the farm groups would help the food groups.  “You scratch my back, and I’ll scratch yours.”  Not anymore. 

The stage is set for a war when the next farm bill is written.  Farm program supporters versus nutrition program supporters. 

Over in the Senate, a vote to take away all the subsidies benefitting ethanol passed by a wide majority.  No more tax credit for blending ethanol with gasoline, and an end to today’s tariff of 54 cents a gallon on imported ethanol.  This bill in the Senate is not expected to become law.  The House has the ability to reject it because tax bills must originate in the House. 

However, this successful attack on ethanol by the Senate is telling us something – ethanol supports are no longer politically untouchable.  What next on their hit list?  Wind, solar, maybe oil subsidies. 

With a diminishing pot of money, the fight over what is left is going to be fierce.  The food and ag industry is going to be expected to pony up a bunch of money to deal with our debt problem.  The only question is – how much? 

In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete.  Check on what I said back then.  Go to http://www.johnblockreports.com .   

Until next week, I am John Block in Washington.