Trump budget cuts SNAP, crop insurance, conservation, rural development; imposes FSIS, APHIS, GIPSA, AMS user fees
May 23, 2017
President Donald Trump's first budget proposal, which was released last week, calls for cuts to the Supplemental Nutrition Assistance Program totaling almost $193 billion over 10 years and $46 billion in cuts to agriculture programs, according to charts released by Office of Management and Budget Director Mick Mulvaney.
In an afternoon reporters' briefing May 22 that was embargoed until 9 p.m., Mulvaney said that the title of the budget will be "A New Foundation for American Greatness," and that the Trump budget is the first one that has been written with the taxpayer considered ahead of the recipients of government programs.
Mulvaney, a former Republican House member from South Carolina, said he had gone through the budget line by line and asked "Can I ask a family in Grand Rapids, Mich., to pay for this?"
The goals of the budget, Mulvaney said, are to increase military spending, balance the budget in 10 years and achieve 3 percent economic growth in the country. The budget will also deliver on Trump's campaign promises not to cut Social Security or Medicare and to build the wall on the border with Mexico and provide more money for school choice. It also assumes that the health care bill the House passed to repeal and replace the Affordable Care Act (known as Obamacare) will become law, and makes additional cuts to health programs beyond that.
Mulvaney said it was "sad" that the Obama administration could not get to more than 1.9 percent growth and that the Congressional Budget Office has projected the same rate of growth.
A 30-year-old American, Mulvaney said, has not lived in the country when it had a higher rate of growth, and he wants to achieve the same level of growth that existed in the 1990s when he was young, quit a job he did not like, and started his own company.
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Mulvaney said he does not expect Congress to go along with Trump's detailed proposal, but that the president's budget is important because, first of all, it has been required by law since 1974 and because "there is a certain message here" that Trump wants more money for defense, border security, veterans and school choice, and does not want to add to the deficit.
"If Congress has a different way to get that point, God bless them," Mulvaney said.
But even though Mulvaney said the rate of growth is too low, he also said that the number of people who get SNAP benefits has not gone down in relationship to improvements in the economy.
At the height of the Great Recession, 47 million Americans were on SNAP, commonly known as food stamps, and that number has gone down only 3 million, to 44 million, Mulvaney said.
"That raises a very valid question — are there folks on SNAP who shouldn't be?" he said.
The answer, Mulvaney said, is to require the states to share in the cost of SNAP benefits as well as in the share of the administrative costs they already pay. That sharing, Mulvaney said, will give the states the incentive to demand changes to the program. As a state legislator, he said, he learned that states could often manage programs better than the federal government, but that with SNAP they have no motivation to push for changes because the federal government pays all the benefits.
A combination of stricter rules on people who are categorized as able-bodied adults without children (ABAWDs) and the state cost share would save more than $190 billion over 10 years, Mulvaney said
A budget chart also revealed that the administration proposes to establish a SNAP retailer application fee that would "save" $2.4 billion.
Under questioning, Mulvaney acknowledged that cuts to SNAP would have to be made in the next farm bill, of which the nutrition program is an integral part and whose inclusion is considered vital for its passage.
Reacting to media reports about SNAP cuts, Jim Weill, president of the Food Research & Action Center said, "The damage that SNAP cuts would inflict — combined with the damage from the president's proposed cuts to Medicaid, Temporary Assistance for Needy Families, the Children's Health Insurance Program, housing programs, assistance to people with disabilities, and other low-income supports — will create massive suffering for tens of millions of struggling people. These cuts must be rejected by Congress."
The SNAP cuts would be part of a larger welfare reform package that would cut Temporary Assistance for Needy Families, saving $21 billion over 10 years. And the Earned Income Tax Credit and Child Tax Credit, saving $40 billion over 10 years. The total welfare reform package would save $274 billion over 10 years, which apparently means that the largest chunk, $193 billion, would come from SNAP, which Mulvaney noted he still calls "food stamps" even though that is no longer the name of the program.
The budget also includes "a fully paid-for proposal to provide six weeks of paid family leave to new mothers and fathers, including adoptive parents, so all families can afford to take time to recover from childbirth and bond with a new child without worrying about paying their bills," according to the executive summary.
Mulvaney noted that he has been asked as a former member of the House Freedom Caucus how he could support paid parental leave, but he said "We need people to go to work," and that he believes they are more likely to take jobs if they know they can spend time with a child under paid parental leave,
In his briefing, Mulvaney did not mention child nutrition programs, which include school meals, the special supplemental nutrition assistance program for women, infants and children, and other smaller programs. But he said the administration takes a dim view of programs that Congress has not reauthorized. The authorization for child nutrition programs from the 2010 Healthy Hunger-Free Kids Act expired in 2015 and Congress has been unable to reach agreement to reauthorize it.
The child nutrition programs continue under appropriations bills. But Mulvaney said the administration is taking "a really, really hard look at unauthorized programs," which amount to $300 billion in spending.
If the programs are "not important enough" for Congress to reauthorize, should the government be spending money on them?," he asked.
Mulvaney did not mention farm or rural program cuts, but the budget summary tables released by OMB contained a series of cuts and proposed user fees bound to upset every part of rural America.
The total savings from farm bill programs would be $38 billion over 10 years and the total including user fees and rural development savings would be $46 billion in government savings over 10 years, the tables said.
The proposals amount to a wish list of proposals put forward by the Heritage Foundation and other conservative groups, the Environmental Working Group and various members of Congress.
But not all groups would want all the reforms, and proposals for user fees and cuts to rural development programs have not been highlighted in the past. Farm analysts are likely to say that imposing these cuts would make it impossible for farm programs to function because they would take large swaths of farmland out of farm programs. In the case of a drought, a flood or other major natural disaster, that would mean calls for ad hoc disaster aid, they are likely to point out.
The proposed cuts and savings include:
Limiting the crop insurance premium subsidy to $40,000, resulting in savings of $16.2 billion. The chart does not say if the limit would be per farm or per farmer.
Limiting crop insurance eligibility to $500,000 in income or less. This presumably applies to crop insurance premium subsidies. The table does not say whether that limit is per farm or farmer. Savings would total $420 million over 10 years.
The American Association of Crop Insurers, Crop Insurance and Reinsurance Bureau, Crop Insurance Professionals Association, Independent Insurance Agents and Brokers of America, National Association of Professional Insurance Agents, and National Crop Insurance Services, all called on Congress to reject the crop insurance proposals.
"Weakening crop insurance and making it more difficult for farmers to bounce back during tough times will jeopardize rural jobs and will find little support in rural America or on Capitol Hill," the groups said in a joint news release.
"The rural economy is already suffering through a period of low prices and a multitude of spring weather disasters," the groups said. "Yet, the administration's budget proposal targets the primary tool farmers use to handle these risks."
"Lawmakers favor crop insurance because it reduces taxpayer risk exposure and has come in under budget since the 2014 farm bill was passed. Farmers are willing to help fund their own safety nets — collectively spending $50 billion out of their own pockets on crop insurance since 2000 — because they know private-sector efficiency will speed aid when it is needed most.
"Destructive cuts to crop insurance have been proposed by past administrations and soundly rejected by congressional leaders, who recognize the importance of maintaining a strong farm safety net."
OTHER CUTS, SAVINGS
Limit eligibility for agricultural commodity payments to people with incomes of less than $500,000 adjusted gross income, effectively cutting the eligibility level in half. The table does not say whether that limit would be per farm, per farmer or for a married couple. The Trump limit would save $653 million over 10 years.
Eliminate the harvest price option for crop insurance. Savings would be $11.9 billion over 10 years.
Streamline conservation programs. The line item provides no details. Savings would be $5.8 billion over 10 years.
Eliminate small programs. No details are provided but savings would be $3.1 billion over 10 years.
The proposal also would establish user fees at the Food Safety and Inspection Service ($5.9 billion), the Animal and Plant Health Service ($200 million), the Grain Inspection, Packers and Stockyards Administration ($300 million), the Agricultural Marketing Service ($200 million). The user fees are listed as savings over 10 years, but presumably industry would have to pay the fees.
Finally, the budget proposes to cut interest payments to electric and telecommunications utilities, resulting in $1.38 billion in savings, and to "eliminate the rural economic development program," for savings of $477 million.
The tables do not provide any details on the cuts to rural electricity, which the government has supported since the 1930s, or the telecommunications program, which goes nearly as far back. The budget did not mention the Rural Utilities Service broadband program, which many rural leaders say is vital to restoring economic vitality in rural America and convincing young people to stay in or return to rural America.
The entry on rural economic development did not provide details on what programs would be eliminated. ❖