FUEL Reform Act

— 297 — Department of Agriculture losses, which is another way of saying minor dips in expected revenue. This is hardly consistent with the concept of providing a safety net to help farmers when they fall on hard times. The Congressional Budget Office (CBO), in one of its options to reduce the federal deficit, has once again identified repealing all Title I farm programs, including ARC, PLC, and the federal sugar program.46 l Stop paying farmers twice for price and revenue losses during the same year. Farmers can receive support from the ARC or PLC programs and the federal crop insurance program to cover price declines and revenue shortfalls during the same year. Congress should prohibit this duplication by prohibiting farmers from receiving an ARC or PLC payment the same year they receive a crop insurance indemnity. l Reduce the premium subsidy rate for crop insurance. On average, taxpayers cover about 60 percent47 of the premium cost for policies purchased in the federal crop insurance program. One of the most widely supported and bipartisan policy reforms is to reduce the premium subsidy that taxpayers are forced to pay.48 At a minimum, taxpayers should not pay more than 50 percent of the premium. After all, taxpayers should not have to pay more than the farmers who benefit from the crop insurance policies. CBO has found that reducing the premium subsidy to 47 percent would save $8.1 billion over 10 years and have little impact on crop insurance participation or on the number of covered acres.49 In that analysis, there would be a reduction in insured acres of just one-half of 1 percent, and only 1.5 percent of acres would have lower coverage levels. 50 This reform is basically all benefit with little to no cost. In its recently released report identifying options to reduce the federal deficit, CBO found that reducing the premium subsidy to 40 percent would save $20.9 billion over 10 years.51 Beyond these legislative reforms, the next Administration should: l Communicate to Congress the necessity of transparency and a genuine reform process. The White House and the USDA should make it very clear that the farm bill process, including reform of farm subsidies, must be con- ducted through an open process with time for mark-up and the opportunity for changes to be made outside the Agriculture Committee process. The farm bill too often is developed behind closed doors and without any chance for real reform. The White House, given the power of the bully pulpit, — 298 — Mandate for Leadership: The Conservative Promise must demand a genuine reform process and express unwavering support for a USDA that shapes a safety net that considers the interests of farmers, while also remembering the interests of taxpayers and consumers. Any safety net for farmers should be a true safety net—one that helps farmers when they have experienced serious unforeseen losses (preferably when there has been a disaster or unforeseen natural event causing damage) and that exists to help them in unusual situations. l Separate the agricultural provisions of the farm bill from the nutrition provisions. To have genuine reform and proper consideration of the issues, agricultural programs should be considered in separate legislation distinct from food stamps and the nutrition part of the farm bill, and reauthorization of such programs should be fixed on different timelines to ensure this separation. Agricultural and nutritional programs, which are distinct from each other, have been combined together for political reasons, something which is readily admitted by proponents of this logrolling. When it comes to American agriculture and welfare programs, they deserve sound policy debates, not political tactics at the expense of thoughtful discourse. Move the Work of the Food and Nutrition Service. The USDA implements many means-tested federal support programs, including the largest food assis- tance program, Supplemental Nutrition Assistance Program (SNAP, also known as food stamps), and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Food Program. The Food and Nutrition Service (FNS) oversees these programs and other food and nutrition programs, including the Center for Nutrition Policy and Promotion,52 which handles the USDA’s work on the “Dietary Guidelines for Americans” (Dietary Guidelines).53 Food nutrition programs include: SNAP; WIC; the National School Lunch Program (NSLP); the School Breakfast Program (SBP); the Child and Adult Care Food Program; the Nutrition Program for the Elderly; Nutrition Service Incentives; the Summer Food Service Program; the Commodity Supplemental Food Program; the Temporary Emergency Food Program; the Farmer’s Market Nutrition Program; and the Spe- cial Milk Program. The next Administration should: l Move the USDA food and nutrition programs to the Department of Health and Human Services. There are more than 89 current means- tested welfare programs, and total means-tested spending has been estimated to surpass $1.2 trillion between federal and state resources.54 Because means-tested federal programs are siloed and administered in separate agencies, the effectiveness and size of the welfare state remains

— 293 — Department of Agriculture induce farmers to adopt organic farming.15 There was no recognition that farmers know how to farm better than D.C. politicians16 or a that organic food is expensive17 and land-intensive.18 The Biden Administration has also been pushing so-called “climate-smart”19 agricultural practices which received additional support in the partisan Inflation Reduction Act.20 American agriculture should not need defending. According to the USDA’s latest data, farm output nearly tripled (a 175 percent increase) from 1948 to 2019, while the amount of land farmed decreased. In fact, as farm output increased by 175 percent, all agricultural inputs increased by only 4 percent.21 In 2021, despite high food prices—a major problem and regressive—Ameri- can consumers spent an average of about 10 percent of their personal disposable income on food, which is close to historic lows. For decades, this share has been in decline.22 America’s farmers efficiently produce food using fewer resources, making it possible for food to be affordable. This reality is not only something that should be defended but also touted as a prime example of what makes American agricul- ture so successful. The connection between efficiency and affordability seems lost in the Biden Administration’s effort to transform the food system. RECOMMENDATIONS Proactively Defend Agriculture. From the outset, the next Administration should: Denounce efforts to place ancillary issues like climate change ahead of food productivity and affordability when it comes to agriculture. l Remove the U.S. from any association with U.N. and other efforts to push sustainable-development schemes connected to food production. l Defend American agriculture and advance the critical importance of efficient and innovative food production, especially to advance safe and affordable food. l Stress that ideal policy should remove obstacles imposed on American farmers and individuals across the food supply chain so that they can meet the food needs of Americans. l Clarify the critical importance of efficiency to food affordability, and why a failure to recognize this fact especially hurts low-income households who spend a disproportionate share of after-tax income on food compared to higher-income households.23 To accomplish these objectives, a new Administration should announce its principles through an executive order, the USDA should remove all references — 294 — Mandate for Leadership: The Conservative Promise to transforming the food system on its web site and other department-dis- seminated material, and it should expressly and regularly communicate the principles informing the objectives listed above, as well as promote these prin- ciples through legislative efforts. The USDA should also carefully review existing efforts that involve inappropriately imposing its preferred agricultural practices onto farmers. Address the Abuse of CCC Discretionary Authority. With the exception of federal crop insurance, the Commodity Credit Corporation (CCC) is generally the means by which agricultural-related farm bill programs are funded. The CCC is a funding mechanism, which, in simple terms, has $30 billion a year at its disposal.24 Section 5 of the Commodity Credit Corporation Charter Act (Charter Act)25 gives the Secretary of Agriculture broad discretionary authority to spend “unused” CCC money. However, in general, past Agriculture Secretaries have not used this power to any meaningful extent. This changed dramatically during the Trump Administration, when this discretionary authority was used to fund $28 billion in “trade aid” to farmers, consisting primarily of the Market Facilitation Program. In 2020, this authority was used for $20.5 billion in food purchases and income subsidies in response to the COVID-19 pandemic.26 At the time, critics warned that this use of the CCC, which in effect created a USDA slush fund, would lead future Administrations to abuse the CCC, such as by pushing climate-change policies.27 Predictably, this is precisely what the Biden Administration has done, using the discretionary authority to create programs out of whole cloth, arguably without statutory authority,28 for what it refers to as climate-smart agricultural practices.29 The merits of the various programs funded through the CCC discretionary authority is not the focus of this discussion. The major problem is that the Secre- tary of Agriculture is empowered to use a slush fund. Billions of dollars are being used for programs that Congress never envisioned or intended. Concern about this type of abuse is not new. In fact, from 2012 to 2017, Congress expressly limited the Agriculture Secretary’s discretionary spending authority under the Charter Act.30 And this was before the recent massive discretionary CCC spending occurred. The use of the discretionary power is a separation of powers problem, with Congress abrogating its spending power. This power is ripe for abuse—as could be expected with any slush fund—and it is a possible way to get around the farm bill process to achieve policy goals not secured during the legislative process. The next Administration should: l Refrain from using section 5 discretionary authority. The USDA can address this abuse on its own by following the lead of most Administrations and not using this discretionary authority.

— 293 — Department of Agriculture induce farmers to adopt organic farming.15 There was no recognition that farmers know how to farm better than D.C. politicians16 or a that organic food is expensive17 and land-intensive.18 The Biden Administration has also been pushing so-called “climate-smart”19 agricultural practices which received additional support in the partisan Inflation Reduction Act.20 American agriculture should not need defending. According to the USDA’s latest data, farm output nearly tripled (a 175 percent increase) from 1948 to 2019, while the amount of land farmed decreased. In fact, as farm output increased by 175 percent, all agricultural inputs increased by only 4 percent.21 In 2021, despite high food prices—a major problem and regressive—Ameri- can consumers spent an average of about 10 percent of their personal disposable income on food, which is close to historic lows. For decades, this share has been in decline.22 America’s farmers efficiently produce food using fewer resources, making it possible for food to be affordable. This reality is not only something that should be defended but also touted as a prime example of what makes American agricul- ture so successful. The connection between efficiency and affordability seems lost in the Biden Administration’s effort to transform the food system. RECOMMENDATIONS Proactively Defend Agriculture. From the outset, the next Administration should: Denounce efforts to place ancillary issues like climate change ahead of food productivity and affordability when it comes to agriculture. l Remove the U.S. from any association with U.N. and other efforts to push sustainable-development schemes connected to food production. l Defend American agriculture and advance the critical importance of efficient and innovative food production, especially to advance safe and affordable food. l Stress that ideal policy should remove obstacles imposed on American farmers and individuals across the food supply chain so that they can meet the food needs of Americans. l Clarify the critical importance of efficiency to food affordability, and why a failure to recognize this fact especially hurts low-income households who spend a disproportionate share of after-tax income on food compared to higher-income households.23 To accomplish these objectives, a new Administration should announce its principles through an executive order, the USDA should remove all references