via a special arrangement with Informa Economics, Inc.
President lays out more spending ahead, and targets unneeded spending
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Barack Obama told a joint session of Congress and a nationally televised
audience Tuesday evening that there should be an end to “direct
payments to large agribusinesses that don't need them.” During his
comments, Obama said the White House has identified $2 trillion over ten
years in wasteful and ineffective spending (all areas), including but
not limited to "unneeded" direct payments to large agribusiness
"In this budget, we will ... end direct payments to large
agribusinesses that don't need them," Obama said, commenting on
his forthcoming budget proposals to be outlined on Thursday and in more
detail in early April.
Obama's position on farm program payments has not altered
since he was a senator and during his primary and presidential campaign.
In fact, it is close to the 2008 farm bill language proposed by former
President George Bush.
It did not take long for U.S. farm program opponents and activists
to welcome Obama's remarks, even though there was little new
on the topic.
Some but not all U.S. farm-state lawmakers
agreed with Obama's targeting direct payments for budget cuts ahead.
Senate Ag Committee Chairman Tom Harkin (D-Iowa)
told Iowa Radio that he agrees "whole-heartedly"
that "giant agribusinesses" shouldn't be getting federal subsidies.
"I have been opposed to this direct payment program ever since
it was first started," Harkin said. "We just never had the
votes to change it over and maybe -- hopefully, now, with the backing
of this president -- we can end those."
Sen. Chuck Grassley (R-Iowa), ranking member of the
Finance panel, told Iowa Radio that he thought what Obama is
getting at is "10 percent of the biggest farmers getting 72 percent
of the benefits out of the farm program and that's compromising the
purpose of the farm program." Grassley said Obama's limits would
be no more groundbreaking than Grassley's owns proposal which would
set a $250,000-cap on farm payments to individual farmers.
Former USDA Secretary Mike Johanns and now the junior senator
for Nebraska (R), said: "I strongly agree we must balance
the federal budget, yet I am concerned with some of the proposals that
have been suggested. I do not support raising taxes on small businesses
or imposing emissions fees through a cap-and-trade system that could
have devastating consequences to businesses, agricultural producers
and consumers." (Note: Obama’s budget likely will include
expected revenue from selling carbon emission credits to polluters.)
"And asking our Departments of Defense and Homeland Security
to cut 10 percent of their budgets without urging spending reductions
in other discretionary spending is not the right strategy for a prosperous
future for our nation."
Background: Obama called on Congress to send him
legislation that places a market-based cap on US carbon polluting
emissions and pushes the production of more renewable energy.
Obama's 2010 budget proposal forecasts that the government will begin
collecting revenue in 2012 from sales of greenhouse gas emission permits,
according to White House Press Secretary Robert Gibbs. While
there is currently no federal cap-and-trade program, Gibbs confirmed
that an overview of the next fiscal year's budget, which Obama is
scheduled to release tomorrow, accounts for funds from auctioning
permits under a system that would give companies the right to emit
certain amounts of carbon dioxide and other gases.
Meanwhile, the National Farmers Union,
who will soon have their president, Tom Buis, depart (to become the
CEO of Growth Energy Inc.), has urged an end to the $5.2
billion made in direct payments annually, using the money instead to increase
loan rates and/or target prices – a throwback to past farm policy.
(NFU will soon have a press conference to reportedly announce Buis' plans.)
Eleven farm groups wrote USDA Secretary Tom Vilsack recently
in opposition against any cuts in farm supports and notably
direct payments, calling them the “the only component
of the farm safety net currently helping every farmer" deal with
rising costs of production and a big decline in crop prices.
Comments: Just as former
USDA Deputy Secretary Chuck Conner under the Bush administration kept
focusing on what he termed "wealthy farmers," Obama and his
top officials have taken that baton and want to reach the finish line
this time, unlike the farm payment cap attempt by the Bush crowd that
was watered down in the final farm bill package. This will not be the
only agriculture-related cuts ahead -- not with multiple-year, trillion-dollar
Agriculture cuts were not the only target of Obama's budget
axe -- he also noted tax breaks for companies that send American jobs
overseas and Medicare waste and fraud. “My administration
has also begun to go line by line through the federal budget in order
to eliminate wasteful and ineffective programs,” Obama said, nothing
that his budget will end “education programs that don’t
work.” He added: “We’ll eliminate the no-bid contracts
that have wasted billions in Iraq, and reform our defense budget so
that we’re not paying for Cold War-era weapons systems we don’t
use.” He also vowed to “root out the waste, fraud, and abuse
in our Medicare program that doesn’t make our seniors any healthier”
and end “tax breaks for corporations that ship our jobs overseas.”
As for Obama's address, the new president acknowledged public outrage
over bank bailouts and misspent federal dollars, but made a sales pitch
for continued hefty spending as a way out of a deep recession. (Since
Obama has become president, the government has spent $35 billion a day.)
He vowed to use the "full force" of the federal government
to make sure that major banks can continue lending, but acknowledged
that the effort is likely to require more taxpayer dollars. Saying "the
day of reckoning has arrived, and the time to take charge of our future
is here," Obama acknowledged the economic crisis while insisting
that the journey back to prosperity means taking on long-deferred problems
instead of letting them mount up for another generation. Striking a
balance, Obama concluded, "We will rebuild, we will recover, and
the United States of America will emerge stronger than before,"
signaling his coming budget will help detail the path ahead.
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