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Louisiana Delegation Needs to Face Budget Reality on Subsidies

Usually every single member of Congress, regardless of affiliation, finds at least one part of a presidential budget at which to be displeased. President Bush’s fiscal 2006 proposal is no exception with Louisianans in Congress agreeing somewhat on what is the least liked, backed by a powerful constituency.

Parroting their party leadership’s talking points, the urban-based Sen. Mary Landrieu and Rep. Bill Jefferson complained that it had misplaced priorities and hid its true costs. But coming from a pair of legislators who never met government spending they didn’t like (with the exception of national defense) and have consistently voted to disempower the citizenry, these objections rang rather hollow.

But their compatriots with districts of a more rural nature were more specific and united in the major shortcoming they saw, a reduction of almost 10 percent in agricultural subsidies. Naturally, the state’s other federal Democrat official found fault here: Rep. Charlie Melancon, took exception to Bush's cuts to the agriculture industry. But his GOP colleagues also chimed in.

"I anticipated some ratcheting down, but this outlines a pretty good fight for those districts, like the Fifth, that rely so much on agriculture as an economic base," said Rep. Rodney Alexander. "It's necessary to get the deficit under control, but I'm not for doing it at the expense of our farmers. Our farmers are already going to be impacted this year by low commodity prices and high fuel and fertilizer prices. They're just getting by as it is."

Even the urban-based Sen. David Vitter expressed dismay: "I think this hits ag way too hard, and I can't support it as it is," Vitter said. "There will have to be some major discussions, and I know there are other senators who feel the same way."

No doubt he’s correct, which is why agriculture subsidies have been the most difficult vampire to kill in federal spending except for, well, reforming Social Security. The Senate gives overrepresentation to rural states, and some states that aren’t as rural but which are poorer like Louisiana or who have made a killing off subsidies such as Illinois will have senators sharing Vitter’s view.

Of course, it’s a view totally at odds with economic good sense and fiscal discipline. Not only does it deliberately distort the marketplace, but it’s a form of corporate welfare that benefits only a few with two-thirds of all subsidies paid to just 10 percent of all farms and agribusinesses. A Heritage Foundation report displays unambiguously that these subsidies prop up the incomes of earners wealthier than the typical American and, ultimately, distort production away from the “family farmer.”

But it’s the “family farmer” that special interests claim would be hurt by these subsidy reductions. "We'll fight it if it's just on us," said Morgan Smith, president of the North Louisiana Agri-Business Council. "There's not a crop you can plan to plant this year and show a profit. Without subsidies, we'll be in a negative situation."

The first thing to say in response to this statement is this guy doesn’t seem to know economics. The reason why one couldn’t, as he claims, make a profit growing anything is that too much of that thing is being grown. Get a few producers out of business and then everybody left is going to be making money without such a glut of that good. Subsidies only keep marginal producers in business to flood the market.

After noting this, throw in a “so what?” Get the marginal producers in a negative situation and we can be rid of them. Nobody has a right to be a farmer, especially when making others pay for the privilege, so it’s probably a good thing to let a few farms go out of business and allow that capital to be spent and its associated labor deployed for more productive purposes.

Now, the world agricultural marketplace is not free by any means (witness the European Union’s, driven by France, huge subsidies which comprise over 40 percent of its budget, more than anything else) but it’s not like Bush is proposing to end agriculture subsidies entirely. It’s too much to expect the Democrats to slow down nondefense discretionary spending by government, but at least Vitter, Alexander, and others on the Republican side can acknowledge reality and not to let 1.65 percent of the U.S. population (2.5 percent of Louisiana’s) make the rest of us subsidize their lifestyle choices.

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