Are All Government Handouts Created Equal?

Ben Terris
National Journal

When it comes to government handouts to poor people, Rep. Stephen Fincher of Tennessee is very clear about his thoughts. He's a little less crystal, however, when the payments are coming to him.

Speaking at a Holiday Inn in Memphis this month, the gospel-singing lawmaker had this to say about food stamps: "The role of citizens, of Christians, of humanity is to take care of each other, but not for Washington to steal from those in the country and give to others in the country."

This has been a popular refrain for Fincher, whose committee has been debating the farm bill on and off for more than a year now. The bill provides the funding for food stamps, a program that Republicans say needs to be drastically cut in an age of austerity. But the bill, among other things, also provides subsidies for farmers. Fincher is a farmer, and as such, he has collected nearly $3.5 million in federal subsidies since 1999, according to data compiled by the Environmental Working Group.

Last year alone he took in $70,000 in government payments. 

Fincher can try to shield himself from criticism by voting to change the way the government subsidizes his farm. Both the House and Senate versions of the farm bill will likely get rid of direct payments—a form of support to farmers that gets paid out regardless of what they farm. But the fact remains that farmers will continue to receive large support from the government. On average, the government foots the bill for 62 percent of insurance premium costs, amounting to a price tag of about $9 billion under proposed legislation.

Proponents of crop insurance say that farmers pay into it, and it pays out only after a crop loss. But activists—the same ones who fought for years to end direct payments—question why some of the richest Americans (the largest household income of a large commercial farm is more than $200,000) should keep getting propped up by the government, even as the poor go hungry.

Scott Faber of yhe Environmental Working Group points out that since farmers can collect unlimited amounts of subsidies—and do so without any kind of transparency—this could just result in the most successful farms reaping more government money than they could have under direct payments.

"We're just replacing an inequitable but transparent safety net, with a more inequitable and less transparent safety net,"  he said. "People call this a reform bill, but it's really just a bait and switch."

Proponents of strengthening the crop-insurance program say it's necessary to keep the food supply safe.

"2012 was one of the worst droughts on record," said Sen. Debbie Stabenow, chairwoman of the chamber's Agriculture Committee. "And in the past, when we had situations like that, Congress had to pass ad hoc disaster assistance for those crop farmers. But we didn't have to do that last year. Because crop insurance works."

The logic says that offering more subsidies will atract farmers to  crop-insurance programs, thus lowering the overall price of the insurance and protecting more farmers. Stabenow also argues that because farmers who take subsidies must comply with certain conservation standards, increasing the number who get crop insurance will also have positive environmental impacts.

So yes, there are arguments for improving crop insurance. But antihunger activists can point to plenty of good reasons for food stamps: Not only do they feed the poor, but they also have a positive multiplier effect in the economy, studies show.

Faber says that for Fincher to demonize food stamps while taking other government money is nothing short of hypocritical.

"I think there's no question that on its face, both the House and Senate bills take from the very poor to give unlimited subsidies to the very rich," he said.

And it's true that these robust insurance subsidies will partially be financed on the backs of the poor. The most recent iteration of the Senate farm bill has about $4 billion in cuts to food stamps, the House bill will have closer to $20 billion.

And while Democrats and Republicans will almost always disagree about how much funding is needed for food stamps, a growing bipartisan effort in the Senate is trying to at least change the way the crop-insurance program is administered. It's not often that Democratic Sens. Jeanne Shaheen of New Hampshire, Mark Begich of Alaska, and Dick Durbin of Illinois find themselves on the same side as Republicans Sens. Tom Coburn of Oklahoma, Pat Toomey of Pennsylvania, and Jeff Flake of Arizona. And yet all of them have offered amendments that either put a cap on payments, implements means-testing, or add a transparency requirement.

"Crop insurance is billed as a safety net, but since there is no cap, this program irrationally pays out the most to those who need it the least," Toomey said in a statement.

It's the kind of sentiment that appeals to both the deficit hawk, and those looking out for the little guy. On Thursday, the Senate approved the amendment from Durbin and Coburn that cuts crop insurance premium subsidies by 15 percent for farmers with incomes over $750,000. 

Still, only time will tell if that appeals to folks like Fincher.