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Cut Subsidies, not SNAP

Tuesday, January 14, 2014

 

Wondering how Congress could cut farm subsidy giveaways instead of SNAP?

Last week (Jan. 9), the New York Times wrote that House and Senate farm bill negotiators are poised to cut $9 billion from the Supplemental Nutrition Assistance Program (SNAP) over the next 10 years. That’s on top of the $11 billion cut that already went into effect last November. If the conference committee goes ahead with that plan, millions of poor Americans could see their benefits reduced.

So, how could Congress cut subsidies, not SNAP?

Here are five proposals that would save taxpayers at least $9 billion and would still provide farm businesses with the most generous safety net in the world:

  • Stop Subsidizing Crop Insurance Companies – By eliminating subsidies that go to companies that sell the insurance, Congress could save more than $9 billion. Similar proposals have been made by USDA and Sen. Kirsten Gillibrand of New York.
  • End “Cadillac” Crop Insurance Policies – Some crop insurance policies actually pay claims tied to the higher disaster induced price at harvest, rather than the actual price that farm businesses expected when they planted in the spring. Crazy, right? Just eliminating these “Cadillac” policies could save enough to avoid SNAP cuts altogether.
  • Link Subsidy Target Prices to Five-Year Averages – Some lawmakers would like to link crop price guarantees to arbitrary – and very high – target prices. Linking price guarantees to a crop’s actual five-year average would also eliminate the need to cut SNAP.
  • Cap Subsidy Payments – Unlike other subsidy programs, crop insurance subsidies are not subject to any payment caps or means testing. We have caps and means testing for SNAP payments, so why not do the same for crop insurance?
  • Reject New Subsidies – Even as legislators make plans to cut SNAP, they are creating new subsidies for profitable farm businesses. Sound nuts? Peanuts, actually. Peanut and cotton farmers will get special new crop insurance programs, and many more farm businesses will be able to buy more generous revenue protection policies.

 

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