Ag Policy Blog

Grassley: Congress Writes Budget, not President

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Sen. Charles Grassley, R-Iowa, said Tuesday he disagrees with proposed budget cuts to federal crop insurance. (Photo by Nick Scalise)

Sen. Charles Grassley, R-Iowa, told agriculture reporters Tuesday that although the administration's budget calls for deep cuts at USDA, it isn't the first time a president has proposed such cuts.

"As our national debt equals $20 trillion efforts to produce a budget that balances cannot be condemned," Grassley said.

"I do disagree with proposed cuts in federal crop insurance. Ultimately Congress will write a budget, not the president."

The president's plan proposes tighter caps and means testing for crop insurance subsidies and eligibility for commodity programs. It also would eliminate the Harvest Price option for crop insurance. Combined, the White House is detailing more than $38 billion in cuts to farm programs, crop insurance and conservation over 10 years.

The president's proposal would limit the premium subsidy to $40,000. That is expected to generate about $16.2 billion in savings in the next decade. A cap in premium subsidies was defeated in the Senate during the 2014 farm bill debate.

The White House scores out another $11.9 billion in savings in the next decade by eliminating the Harvest Price option on crop insurance.

"Cutting too much from the farm bill program is not a wise move during a downturn," Grassley said.

Rather, he said he wants to see a stronger enforcement of government payment limits.

Grassley said there are a number of philosophical reasons to have a federally funded crop insurance program. Prior to such a program, he said if agriculture suffered a disaster farmers may receive relief after the fact. That would depend on whether Congress would recognize the disaster and then provide help.

"With federal crop insurance it is better for people to plan ahead," Grassley said.

"It's better to have farmers paying 50% to 60% beforehand rather than to have taxpayers pay 100% after the fact. Isn't it better, in other words, to have farmers assuming some of the costs of their disaster?"

Also on Tuesday, a number of crop insurance interests expressed concern about the president's proposed cuts to crop insurance.

The American Association of Crop Insurers, Crop Insurance and Reinsurance Bureau, Crop Insurance Professionals Association, Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents, and National Crop Insurance Services said the cuts would come at a time when farmers need help most.

"Weakening crop insurance and making it more difficult for farmers to bounce back during tough times will jeopardize rural jobs and will find little support in rural America or on Capitol Hill," the groups said in a statement.

"The rural economy is already suffering through a period of low prices and a multitude of spring weather disasters. Yet, the administration's budget proposal targets the primary tool farmers use to handle these risks. Lawmakers favor crop insurance because it reduces taxpayer risk exposure and has come in under budget since the 2014 farm bill was passed. Farmers are willing to help fund their own safety nets, collectively spending $50 billion out of their own pockets on crop insurance since 2000, because they know private-sector efficiency will speed aid when it is needed most.

"Destructive cuts to crop insurance have been proposed by past administrations and soundly rejected by congressional leaders, who recognize the importance of maintaining a strong farm safety net."

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

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greg schimkat
5/24/2017 | 8:58 AM CDT
The American Association of Crop Insurers, Crop Insurance and Reinsurance Bureau, Crop Insurance Professionals Association, Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents, and National Crop Insurance Services said the cuts would come at a time when farmers need help most. The deep concern from insurance interests is heartwarming.
Jay Mcginnis
5/24/2017 | 6:25 AM CDT
Farmers voted to get government out of farming by electing Trump, it is only out of respect for their wishes that all subsidies be cut and the lights turned off at the USDA, after all they will benifit from the bigly corporate tax cuts as America becomes great again. Feel the trickle!!!!!