Protecting Agricultural Borrower Information Act

— 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. — 295 — Department of Agriculture l Promote legislative fixes to address abuse. Ideally, Congress would repeal the Secretary’s discretionary authority under section 5 of the Charter Act. There is no reason to maintain such authority. If Congress needs to spend money to assist farmers, it has legislative tools, including the farm bill and the annual appropriations process, to do so in a timely fashion. While not an ideal solution, Congress could also amend the Charter Act to require prior congressional approval through duly enacted legislation before any money is spent. At a minimum, Congress should amend the Charter Act to: l Limit spending to directly help farmers and ranchers address issues due to unforeseen events not already covered by existing programs and that constitute genuine emergencies that must be addressed immediately. l Prohibit the CCC from being used to assist parties beyond farmers and ranchers. l Clarify that spending is only to address problems that are temporary in nature and ensure that funding is targeted to address such problems. l Tighten the discretion within section 5 and identify ways for improper application of the Charter Act to be challenged in court. Reform Farm Subsidies. Too often, agricultural policy becomes synonymous with farm subsidy policy. This is unfortunate, because making them synony- mous fails to recognize that agricultural policy covers a wide range of issues, including issues that are outside the proper scope of the USDA, such as environ- mental regulation. However, there is no question that farm subsidies are an important issue within agricultural policy that should be addressed by any incoming Adminis- tration. There are several principles that even subsidy supporters would likely agree upon, including the need to reduce market distortions. Subsidies should not influence planting decisions, discourage proper risk management and innovation, incentivize planting on environmentally sensitive land, or create barriers to entry for new farmers. Farm subsidies can lead to these market distortions and there- fore, it would hardly be controversial to ensure that any subsidy scheme should be designed to avoid such problems. The overall goal should be to eliminate subsidy dependence. Despite what might be conventional wisdom, many farmers receive few to no subsidies,31 with most subsidies going to only a handful of commodities. According to the Congres- sional Research Service (CRS), from 2014 to 2016, 94 percent of farm program

— 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

— 291 — Department of Agriculture about the importance of sound science to inform the USDA’s work and respect for personal freedom and individual dietary choices, private property rights, and the rule of law. Taking these factors into account, below is a model USDA mission statement: To develop and disseminate agricultural information and research, identify and address concrete public health and safety threats directly connected to food and agriculture, and remove both unjustified foreign trade barriers for U.S. goods and domestic government barriers that undermine access to safe and affordable food absent a compelling need—all based on the importance of sound science, personal freedom, private property, the rule of law, and service to all Americans. OVERVIEW In 1862, President Abraham Lincoln signed into law the legislation that created the USDA.4 The department had a very narrow mission focused on the dissemi- nation of information connected to agriculture and “to procure, propagate and distribute among the people new valuable seeds and plants.”5 During the last 160 years, the scope of the USDA’s work has expanded well beyond that narrow mis- sion—and well beyond agriculture itself. In addition to being a distributor of farm subsidies, the USDA runs the food stamp program and other food-related wel- fare programs and covers issues including conservation, biofuels, forestry, and rural programs. Based on the USDA’s fiscal year (FY) 2023 budget summary, outlays are esti- mated at $261 billion: $221 billion for mandatory programs and $39 billion for discretionary programs.6 These outlays are broken down as follows: nutrition assis- tance (70 percent); farm, conservation, and commodity programs (14 percent); “all other,” which includes rural development, research, food safety, marketing and regulatory, and departmental management (11 percent); and forestry (5 percent).7 The USDA has provided a summary of its size, explaining, “Today, USDA is com- prised of 29 agencies organized under eight Mission Areas and 16 Staff Offices, with nearly 100,000 employees serving the American people at more than 6,000 locations across the country and abroad.”8 MAJOR PRIORITY ISSUES AND SPECIFIC RECOMMENDATIONS For an incoming Administration, there are numerous issues that should be addressed at the USDA. This chapter identifies and discusses many of the most important issues. The initial issues discussed should be priority issues for the next Administration: Defend American Agriculture. It is deeply unfortunate that the first issue identified must be a willingness of the incoming Administration to defend Amer- ican agriculture, but this is precisely what the top priority for that Administration — 292 — Mandate for Leadership: The Conservative Promise should be. As previously discussed, the Biden Administration is seeking to use the federal government to transform the American food system.9 The USDA web site explains: The U.S. Department of Agriculture (USDA), alongside Biden–Harris Administration leadership and the people of this great country, has embarked on another historic journey: transforming the food system as we know it— from farm to fork, and at every stage along the supply chain.10 The federal government does not need to transform the food system or develop a national plan to intervene across the supply chain. Instead, it should respect American farmers, truckers, and everyone who makes the food supply chain so resilient and successful. One of the important lessons learned during the COVID- 19 pandemic was how critical it is to remove barriers in the food supply chain—not to increase them. The Biden Administration’s centrally planned transformational effort mini- mizes the importance of efficient agricultural production and instead places issues such as climate change and equity front and center. The USDA’s Strategic Plan Fiscal Years 2022–2026 identifies six strategic goals, the first three of which focus on issues such as climate change, renewable energy, and systemic racism. In the Secretary of Agriculture’s message, there is only one mention of affordable food— and nothing about efficient production and the incredible innovation and respect for the environment that already exists within the agricultural community.11 The Biden Administration’s USDA strongly supported12 the recent United Nations (U.N.) Food Systems Summit. According to the USDA: The stated goal of the Food Systems Summit was to transform the way the world produces, consumes and thinks about foods within the context of the 2030 Agenda for Sustainable Development and to meet the challenges of poverty, food security, malnutrition, population growth, climate change, and natural resource degradation.13 Not unlike those who oppose reliable and affordable energy production, there is a disdain, especially by some on the Left, for American agriculture and the food system.14 The Biden Administration’s vision of a federal government developing a plan that “fixes” agriculture and focuses on issues secondary to food production is very disturbing. A recent USDA-created program captures both the disrespect for American farmers and the Biden Administration’s effort to dictate agricultural practices. The USDA explained that it was concerned with farmers not transitioning to organic farming, and therefore announced that it will dedicate $300 million to