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The Audacity of Budgets (Part 2)

The Department of Agriculture:

When I began this series, I thought there were sections of the 2012 Federal budget that I would be able to skim through rather quickly. They would require little research, discussion, and few comments. The USDA being one of those. That assumption was quickly proven false.

My observations of the USDA 2012 budget will require more than one posting.

While reading through what this department consists of and oversees, and the funds allocated to it, I found myself laughing out loud (to keep from crying) at times. Other times, I just couldn’t believe what I was reading.

Researching the various departments, I noticed those departments contained even more departments. Many of which didn’t seem to belong in the USDA. The regulatory bologna packed under the USDA umbrella is astounding. It is a rat maze with no end. I was beginning to feel like Alice in Wonderland. Suffice it to say, the USDA has come a long way from its humble, well intended origins in 1862.

What exactly is the USDA? According to Wikipedia

The United States Department of Agriculture (informally the Agriculture Department or USDA) is the United States federal executive department responsible for developing and executing U.S. federal government policy on farming, agriculture, and food. It aims to meet the needs of farmers and ranchers, promote agricultural trade and production, work to assure food safety, protect natural resources, foster rural communities and end hunger in the United States and abroad.

Originally focused on farming, the USDA has been modified and expanded to include additional departments, programs, and divisions that reach way beyond the original. It has fostered dozens of additional departments, such as the FDA in 1906. And now, has grown so large, many of its programs are duplicates of other programs in other departments. Even its regulatory authority crosses departmental lines. Like The Department of Energy, just to name one. Typical government mentality; why have one department running something when you can have two, at twice the price.

Even the Federal Reserve is a direct result of this department’s activities. It made its entrance in Agricultural Credits Act of 1923– providing limited loans to farmers.

Sadly, the Government couldn’t wait to turn the USDA into a give-away arm as early as 1933. The Agricultural Adjustment Act paid farmers not to produce food and livestock.

I’m sure there were merits to the 1933 legislation, as well as arguments against it, which we will not delve into in this discussion. The end result is; like any government subsidy, it never goes away. Only grows. A la, The Food, Conservation, and Energy Act of 2008. Which was yet another in the long line of expansions to the USDA. But that legislation was nothing, compared to the hack job that it is undergoing by this Administration.

Now that we have a snapshot of the Department of Agriculture’s beginnings, and description, let’s dive in.

A good place to start is with the Funding Highlights section:

Provides $23.9 billion in discretionary funding, a decrease of $3.2 billion”. The key word here, being discretionary. Some other words that come to mind as substitutes for discretionary-pork, waste, poorly monitored, favoritism, and nepotism. O.k. Let’s see if the numbers back up this claim.

The discretionary funding section shows:     2010 – $27 billion vs $23.9 billion in 2012.

It is a decrease, to be sure, if you just look at that one line. The next section reveals numbers that show It is really just more, fuzzy math.

Look at these 2 lines:

Total, Discretionary budget authority 2010 – 27,032   2011 – 25,701 2012 – 23,879

But under Memorandum:

Total, Discretionary outlays 2010 – 26,376   2011 – 32,042 2012 – 27,580

Even though a decrease was claimed at the beginning, it seems to be merely a rouse. When it comes to outlays (actually paying the bill), we see an increase of $1.2 billion. Decrease does not mean the same thing as increase, does it?

Skipping down to the bottom line:

Total USDA outlays (discretionary & mandatory)   2010 $129.5 billion vs $144 billion in 2012.

That would be an increase of $14.5 billion. Where is the bullet point for that? Shouldn’t that be in the highlights as well? I guess not, seeing that there are no budget cuts in the USDA.

I suspect that the actual amount will eclipse that estimate. Little attention is given to the 2011 amount of $152 billion, which is an increase of $23 billion over the 2010 budget figure.

An $8 billion cut 2012 vs 2011. So we increase expenditures by $14.5 billion. Then make a sacrificial and noble $8 billion cut. So, will that rate a bullet point next year?

Back to the highlights:

Resuming at the same bullet point – “Consistent with Administration priorities“, Uh oh! What are this administrations priorities again? That statement has giveaway written all over it.

Next – “investments are made in renewable energy and key research areas.”

What?

Yes the Dept of Agriculture is in the renewable energy business. You know, turning corn into alcohol and such. $400 Million is for biofuel development. O.k. let’s go with that for the moment.

Under the paragraph “Funds renewable and Clean Energy

Only $400 Million is to biofuel development. But $6.0 billion is for subsidizing Electric Co-operatives, research institutes, and small businesses. Is this money for new power generating plants, or upgrading existing ones? Can anyone one say General Electric? How about Harvard University? Oh, and since we are so concerned about fossil fuel dependence and renewable energy, you killed the Yucca mountain nuclear waste repository why?

Returning to the bullet point;

Savings are created by reducing direct payments to high-income farmers“. Doesn’t say how much savings there will be. It does smell like; if you are productive in what you do, you don’t get anything, you lose. The whole ‘farm subsidy’ issue is a research project in itself.

Moving on.

refocusing USDA’s homeownership programs“,

What does that mean? It means we are going to give government sponsored loans to low income families to build a new house. Are we right back to 1923? The Dept of Agriculture making loans to farmers? If only it were true. The budget states these loans are for non–farming rural communities. Why are we doing this? Well the USDA is charged with ‘fostering rural communities’, but non-farming rural communities? That seems to be a stretch. I would bet that the sensible loan conditions imposed in 1923 won’t apply to this program. Anyone care to guess what the failure rate will be?

Have we not learned anything? Let’s have a repeat of 2007. Poor loans and poor investing is a major concern to me here. And the Department of Agriculture is going to be charged with overseeing this? We all know what a great job the Senate Banking Committee members did in foreseeing that train wreck. It was truly memorable when Tom Dodd, the SBC chairman, after the crash, said “how did this happen”? How about the great job they did in protecting the taxpayer from the disaster that is Fannie Mae and Freddy Mac. Thanks Barney.

But we are going to do it again! Provide funding for 170,000 new homes for low to middle income ruralites. We are talking about a $24 billion dollar package, with $4 billion allocated for this particular program. And it is placed under the mandatory section of the budget, making it harder to kill, once in effect. Why should there be a separate loan program for non-farming ruralites?

To prevent “food deserts”, the USDA is going to provide loans to build neighborhood grocery stores, so they don’t have to drive to town to get their groceries. It makes little sense to provide funding for new homes in the country, so, now we are going to build rural grocery stores.

All of this in an effort to stem the tide of people deserting the rural life and heading to the burbs. Why are they leaving?  The reasons are numerous, but this ‘loan program’ isn’t going to stop them from leaving. If this administration really wants to foster rural communities and give the people a reason to stay, then this money would be better spent used to encourage businesses to set up shop there, providing job opportunities for the ruralites. Small manufacturing plants would provide greater opportunities than grocery store employment would. If you want success in this effort, invest in business. Some may say this does invest in what I am suggesting. Really? The devil is in the details. Look at the USDA Rural Development plan (updated from the original Stimulus plan failure) and see how much money is allocated for business and how much is allocated for more government jobs. See page 58.

This is the 500 lb gorilla in the room. This is more than just another give – away program. This administration is carefully planting people these districts. Liberal politicians and others with likeminded views. And this effort is providing the funding they need to buy the votes of ruralites. Think it’s not true? Check out the results of the last election and see how many Representatives were elected in poor rural districts that seem to have little or no background connection to these districts.

and targeting USDA conservation programs.” This will keep the environmental lawyers in funds for a while. $1.4 billion is a nice chunk of change. Notice it says the $1.4 billion is for “conservation assistance”. The actual expense for upkeep is not included in this figure. This legislation also includes a nice land grab, containing 271,158 additional acres of wetlands, “targeted conservation practices” affecting 6 million acres on both coasts, and the upper Mississippi River basin. That represents a lot of land to be placed under government environmental control. And you can bet the farm (no pun intended) that a pet environmental group will make up the overseeing advisory panel.

There is nothing wrong with conservation and protecting the nation’s resources. National parks and ecosystems need protection. But it never ends there. The government designates an area as a conservation area and suddenly the land cannot be used for anything productive because of the web of government regulations and the environmental nut jobs. You know, like the critter bridge the Stimulus money was used for.

To be continued.

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