Budget Cuts

10 November 2010

I heard an interesting report on NPR yesterday about the cotton trade. The story is basically that the US got sued by Brazil at the World Trade Organization (WTO) court over illegal (under WTO rules we have agreed to) cotton subsidies that the US government gives to US cotton farmers. Brazil won the case and its several appeals. However, in spite of the ruling, the US kept the subsidies in place, so Brazil threatened to retaliate with trade sanctions, which forced the US to negotiate a settlement with Brazil. Under this settlement, which has been in place for a few years, we continue to subsidize US cotton farmers, but we are also now sending a monthly subsidy to Brazilian cotton farmers. Of course, all of this money to subsidize cotton is coming from US taxpayers -- around 2 billion dollars per year for the US cotton farmers, and about 150 million dollars per year for Brazilian farmers (according to the NPR report).

This ties into the 2010 elections in the US, because the Republicans have been saying that their big wins are a mandate to reduce US government debt, reduce government spending, reduce the size of government, and get rid of all government functions that are not explicitly stated in the Constitution. This is a great opportunity for them: the US government currently spends a total of about 12 billion dollars per year on agricultural subsidies to US farmers, not counting payments such as the Brazilian cotton subsidy (and who knows what other strange deals). 62% of this money goes to large commercial farmers, and is therefore a direct subsidy to big business. There is certainly nothing in the Constitution saying that we should be spending our tax dollars to subsidize farmers, especially big businesses and foreign farmers, and there is a huge bureaucracy in the USDA that supports these payments. So, I would like to challenge the Republicans to drop all subsidies for agriculture, as a first step in reducing government spending and the size and reach of government.

I actually would like to see the new Republican leaders try this. For one thing, I really don't see why we should be subsidizing US or foreign farmers with tax dollars. These subsidies cause all kinds of ripple effects, such as US corn subsidies putting Mexican corn farmers out of business, and thereby increasing poverty in Mexico and making illegal immigration to the US an even more attractive option. The price of farm commodities is also a very small fraction of the price of food and clothing, so it's unlikely that dropping subsidies would have a large effect on the prices we pay for basic necessities, either.

Another reason I would like to push the Republicans to try this is that if they succeeded, they would certainly be defeated in the next election, since their popularity is highest in the "heartland" (i.e. farm country) -- that would be a good outcome (in my opinion). But as is more likely, if the Republicans were challenged to take this step and decided not to, then it would at least make them admit that their stated mandate is not real -- I don't think that Americans really want to lose the benefits of government or cut the national debt, when faced with specific programs that would be cut. They just don't want to pay for government programs.

Other government spending that I'd like to see the Republicans try to cut:

  • The Forest Service's subsidies for lumber harvesting, including road building and low-priced sales of timber. We should be paying more for paper and wood, rather than subsidizing the cutting of trees on our National Forest lands.
  • Military spending. We should definitely eliminate weapons programs and military bases that the military has stated it doesn't need -- these cuts have been held up by powerful congressional members whose districts contain the weapons plants and bases. Then we should consider deeper cuts -- for instance, why do we need so many military bases overseas?
  • So-called "foreign aid". I've written about this in the past (read the archives), and concluded that the money we label as "foreign aid" is really mostly going to US corporations, is not targeted at the countries who need the most help, and is of questionable value to the countries we are supposedly helping. So how about if we just get rid of USAID entirely?

That's all I can think of at the moment -- maybe you have more ideas?