When Is an Earmark an Earnmark

The Sustainable Ag Coalition believes that ATTRA lost its funding because Congress thought it was an earmark:

One very distressing casualty of the continuing series of Continuing Resolutions that are keeping the government open but cutting funding week by week is the National Sustainable Agriculture Information Service, known as ATTRA.  ATTRA’s $2.8 million was cut entirely in H.R. 1, the House-passed full-year Continuing Resolution from mid-February and that proposed program termination was unfortunately including among the $6 billion in cuts adopted by Congress this week in the new short-term Continuing Resolution keeping the government operating through April 8.
The justification for cutting ATTRA appears to be a misperception that it is an earmark.  Indeed, like earmarks, many Senators and Members of Congress request funding for ATTRA every year, as they do for many programs.  However, unlike earmarks for projects in specific congressional districts, ATTRA is a nationwide program, authorized in the 2008 Farm Bill, and it has been included in presidential budgets through many administrations over several decades. 

 What they don't mention is that the National Sustainable Agriculture Information Service is not a federal agency, as the name might imply (and I first thought).  It's the outcome of a cooperative agreement with the Rural Development Service--in other words federal money provided to a cooperative.  Here's the general blurb from RD:

We have over 80 years of experience working with the cooperative sector and remain the only federal agency charged with that responsibility. USDA Rural Development has been providing support to cooperatives since the Cooperative Marketing Act of 1926, promoting the knowledge of cooperative principles and practices as well as collecting statistics on cooperative activities. The Cooperative Program provides assistance for rural residents interested in forming new cooperatives and administers programs that fund value-added producer grants, rural cooperative development centers, and small socially-disadvantaged producers.
We also provide resources to local cooperatives to support a department-wide effort known as, 'Know Your Farmer, Know Your Food'. This initiative, led by Deputy Secretary Kathleen Merrigan puts an increased emphasis on regional food systems, which will have direct and significant benefits to rural communities. Lear [sic] more here:

Now if the appropriation is specifically for that cooperative agreement, it comes pretty close in my mind to an earmark. If RD is given a lump sum of money for cooperative agreements and decides to give $2.8 million to ATTRA, then it's not.

Michael Kinsley and Budget Cuts

I agree with Michael Kinsley most of the time, but not on the issue of budget cuts. He says whenever budget cutting is in the air, there's a template for arguments--note, I like the template:

1. Expression of general support for deficit reduction. Reference to easy answers (there are none). Reference to burden (all must share).
2. Reference to babies and bathwater. Former should not be discarded with latter.
3. This program/agency/tax break is different. A bargain for the taxpayers. Pays for itself many times over. To eliminate or cut would be bad for children/our troops.
4. Cost is small (a) as percentage of total budget; (b) compared with budget of Pentagon; (c) compared with projected cost of health care.
5. Optional comparisons: to cost of just one jet fighter or 3.7 minutes of War on Terror
6. Names of famous people who support this program or tax cut, especially Colin Powell. Other good names: Madeleine Albright, Natalie Portman, George H.W. Bush (not W), Warren Buffett.
7. This is not about fair, responsible, across-the-board budget cutting. This is about the other side irresponsibly pursuing an ideological agenda, penalizing programs it doesn’t like.

(Read more: http://www.politico.com/news/stories/0311/51256.html#ixzz1GnjahBut) 
So, if I like the template, which points out the dynamic of budget cutting fights, what do I have a problem with?  Kinsley says most domestic programs are incremental: the more money we spend, the more outcome we are likely to get, whether it be roads, dams, orchestras, whatever.  But the military, he says, is different.  Security is binary; we either spend enough to be secure or we don't.  That's where I have a big problem. The truth is often that we define our security interests by our capability, as in Libya.  If we had more military might available, we probably would define our security interests as requiring the overthrow of Qaddafi, even if it meant "no drive zones". Since might is tight right now, we're a lot more hesitant. 

Changes to Farm Programs

Chris Clayton at DTN reports on suggested changes or possible changes in both direct payments and the SURE and ACRE programs from an Ohio State professor:

Zulauf said perhaps direct payments could be reformed in that farmers would receive them only if they have a loss. Going a step further, Zulauf said perhaps a loss should be required for receiving any farm safety net program. Such an idea could save $1 billion to $2.5 billion a year, he said, though Zulauf noted he doesn't have a way to fully model out that figure. Nonetheless, "This is not a small item."

Republicans in the House and Agriculture

President Obama proposed, again, some cuts to farm programs by reducing figures in the payment limitation figures.  One would figure those stern, tight-lipped budget cutters in the House would be glad to agree to his proposal.  Politically it would seem wise to say: we'll pocket all your cuts and we'll cut some more.  (I'd put this into poker terms, but my mother thought poker was a tool of the devil.)  But not so, as Sallie James observes at Cato.  Bottom line: political principles are remarkably flexible, much like cooked spaghetti.

The Fallibility of Memory

President Obama proposed a big cut to the program which helps low income people with their heating bills. See Pro Publica's discussion here.  Now I would have sworn the program originated under Carter in response to the big rise in oil prices and the embargoes of the 70's.  But while a weatherization program seems to have begun then, the LIHEAP was begun in 1981.  I repeat, 1981!  The first year of Ronald Reagan's term, the President notorious for being personally amiable but professionally hard-hearted.  And 1981 was the year he was cutting taxes and some programs.  So, what happened then?

The Return of the Vicious Budget Cycle

I commented somewhere yesterday on the reason deficits are important--it leads to the vicious budget cycle where an ever increasing portion of the budget goes just to pay interest to fat cats bankers. Today the Post has an article on it. An excerpt:

Starting in 2014, net interest payments will surpass the amount spent on education, transportation, energy and all other discretionary programs outside defense. In 2018, they will outstrip Medicare spending.

 I remember the Clinton administration struggling with this. I'm a little afraid that people who weren't grown by then (Yglesias, Ezra Klein) may not have those memories.  It's well and good to point to the fact that inflation is low now despite the Fed's monetary easing, but it's very easy to get behind the eight-ball, to the detriment of needed programs.

Hypocrisy--Tea Flavored

From Farm Policy:

As a sidebar with respect to farm spending and the tea party, Jonathan Ellis indicated on Saturday at the Argus Leader Online (SD) that, “A new poll of 401 South Dakota tea party supporters is available today. The poll is the most comprehensive public analysis of the movement in this state…[and]…Eighteen percent have an immediate family member who receives federal farm subsidies. Yet 47 percent think federal farm payments to farmers and ranchers should be left at current levels or increased.”

Program Cuts for USDA

The Sustainable Agriculture Coalition has a post describing the cuts to be made in the discretionary and mandatory programs of USDA.  The media seems to have focused on the appropriations cuts, but as the post notes there are also proposals to require the Agriculture Committee to cut programs under its jurisdiction.

Revised Republican Cuts of USDA

It looks as if the Republicans, in their effort to cut $100 billion, have added to the previously announced cuts of FSA and NRCS other items, and deepened their cuts of WIC.  (Figures are in millions, with the first one the cut from FY2010 as enacted, the second one from FY2011 as Obama requested.) (Here's my previous post.)

Departmental Administration and Offices (137.7) (105.9)
Inspector General (8.7) (4.5)
Research Education and Extension
Agricultural Research Service (185.1) (84.3)
National Institute for Food & Agriculture (217.1) (150.7)
Other Research (13.2) (20.8)
Marketing and Regulatory Programs
Animal & Plant Health Inspection Service (75.0) (32.3)
Agricultural Marketing Service (9.4) (11.8)
Grain Inspection, Packers and Stockyards Administration (1.6) (3.9)
Food Safety and Inspection Service (88.4) (52.7)
Farm Assistance Programs
Farm Services Agency (190.4) (205.3)
Risk Management Agency (3.1) (5.9)
Natural Resources Conservation Service (172.5) (46.2)
Rural Development
Rural Housing Service Loans & Grants (208.8) (35.1)
Rural Business Loans & Grants (33.2) (51.4)
Rural Utilities Loans & Grants (204.5) (6.3)
Rural Development Administrative Expenses (35.8) (40.4)
Domestic Food Programs
Special Supplemental Nutrition Program for Women, Infants &
Children (WIC) (747.2) (1008.2)
Commodity Assistance Programs (26.0) (7.6)
Other Nutrition Programs & Administration (9.0) (32.3)
Foreign Agriculture Service
Food for Peace (PL 480) (687.0) (544.0)
McGovern-Dole International Food for Education and Child Nutrition
Grants (109.5) (20.0)
Foreign Agriculture Service (14.9) (83.4)
Food and Drug Administration (241.0) (220.2)

Budget Cuts Help IT?

This Federal Computer Weekly  piece argues that Republican budget cuts will, in the long run, help IT, because the only way to accomplish program goals will be by using technology. I'd beg to differ. If budget cutting were logical, we'd see more money added to IRS to do a better job of collecting taxes. We'd see upfront investments in IT.  We'd see reorganizations.  My experience is budgeting isn't logical, so we'll see the IRS hacked, we'll see IT money cut back to mere maintenance, and we'll see organizations fiercely defending their turf against the world.

USDA Farm Cuts

House Appropriations Committee is proposing the following cuts in 2011 FY (the next continuing resolution):

"Food Safety and Inspection Services -$53M
· Farm Service Agency -$201M
· Agriculture Research -$246M
· Natural Resource Conservation Service -$46M
· Rural Development Programs -$237M"

 No detail on what's involved. No cut to SNAP (food stamps) but WIC takes a $738 million hit.  Not sure why it's better to fund the poor instead of women and infants.

Tea Party Budget Proposals

From Rep. Bachmann:

$20 Billion Replace farm subsidies with farmer savings accounts, eliminating the Foreign Agriculture Service, merging and trimming budget of four agriculture outreach and research agencies, and funding the Food Safety and Inspection Service with user fees.

Note: I don't know how she gets the $20 billion or how much money the farmer savings accounts would get (unless it's just a 401k with no federal matching(.

From Rand Paul:

The following agencies are defunded: ARS, FAS, NRCS (the text says "Resource Conservation Service, so I assume he's trying for NRCS), National Institute of Food and Agriculture. FS is cut by $1.178 billion, the remaining agencies are cut pro rata by $42.542 billion.

Sen. Paul presents the text of a bill (S.162) but it's not in the sort of detail any serious effort would need.  For example, the legislation on farm programs would need to amend existing legislation.  It's perhaps representative of the deep thought which has gone into his proposal that the first page completely defunds the Government Printing Office, this on a bill printed by GPO.  No explanation of how Congress will do its business without GPO.

Republicans To Cut Farm Programs

According to this post, a group of Republicans wants to take the meat cleaver to programs, including farm programs.  What's on their hit list?

The Mohair Program, for a savings of $1 million.
The Sugar Program, for a savings of $14 million.

Yes, that's it.

How To Balance the Budget: the Republicans Modest Proposal

Via Kevin Drum, the info that Goldman Sachs changed their fiscal year begin date from Dec. 1 to Jan. 1.  They just happened to do it back in 2008, when they stuffed a lot of losses and bonuses into December, which then didn't count.

This triggers my suggestion.  Back in the days of old, the federal fiscal year began July 1.  But Congress started having more and more difficulty getting appropriations bills passed by that date.  So finally everyone agreed to move the fiscal year start date to Oct. 1, a date by which Congress surely would have no problem in passing appropriations. This all was in the late 70's or maybe early 80's.

It's a truth universally recognized that Congress no longer is capable of passing appropriations bills by Oct 1, so we have all the justification we need to move the start of the 2012 fiscal year to Jan 1, 2012.  As we do that, we'll move all the expenditures we can into the transition quarter, between Oct 1 2011 and Dec. 31.  That will enable us to balance the budget in FY 2012.  We can then run for reelection to Congress and our Presidential candidate can run on the basis that we did the impossible: balanced the budget without raising taxes.

Budgetary Incoherence on the Right

Reihan Salam at The Agenda comments on a piece elsewhere:

." But I did appreciate the opening section on how to rethink support for farmers:

Canada has experimented with a program that provides government matching funds for farmers' deposits into savings accounts that help them buffer their incomes against the ups and downs of farm prices. Such a program in the U.S. could achieve the objective of helping family farmers survive while enabling policy makers to withdraw billions of subsidies to big agriculture.
These changes, plus closing the U.S. Agriculture Department's Foreign Agricultural Service, would save about $19.5 billion. Not a bad start."

This seems incoherent to me.  The farm programs these days aren't the $19 billion people were using in the early 2000's, but more like $12 billion. And if you're matching farmers' deposits (like a 401 K setup), you can't claim to cut all that money.  And the FAS is not a high dollar service.  (Probably around $200 million.) Maybe they got confused between FSA and FAS?  As I say: incoherence on the right.  (Not that the left is always right when they're discussing agriculture.)

Implications of a Government Shutdown

Charles Peters in the Washington Monthly used to have fun with bureaucratic techniques to avoid budget cuts.  I think he called one tactic: "closing the Washington Monument".  In other words, try to cut an agency's budget and the wise bureaucrat will make sure the cut shows up in the most painful way possible. That's sort of what will happen if history repeats itself and the government is shutdown.  If I remember the Gingrich days, there very quickly was some triage.  Congress decided that things like defense had to continue (and we weren't involved in one war in Afghanistan then and one (something) in Iraq).  And Social Security checks had to go out.  And other critical activities had to happen.

One little-realized fact is that some agencies, or some activities within some agencies, are not financed by the budget and appropriations, but by user fees. So presumably passports will continue to be issued and meat inspections will continue. 

But I'm probably confusing two issues: a possible Republican refusal to increase the debt ceiling; and a refusal to fund the government by passing a continuing resolution or appropriations bills.  If I recall, Secretary Rubin used some financial manipulation to get around the first for a while, like raiding various trust funds by putting Treasury IOU's in place of the fund assets.  The Republicans howled, but the tactic worked.  There's a limit to how long that can go on.  The second issue causes parts of the government to shut down.  Because the Democrats didn't pass any 2011 appropriations bills, if and when the current continuing resolution expires the whole government would shut down.  That's when you'll see some bipartisan agreement on funding things like DOD, VA, IRS, SSA with appropriations.  What happens next we don't know.

The Fallacy of X Is a Minuscule Percentage of the Budget

I'm starting to see preemptive arguments from interests groups along the lines of: "cutting expenditures for [X] isn't worthwhile because the total cost of [X] is such a minimal part of the federal budget.  I think I've seen that from farm groups, the food movement, and groups worried about NEA and NEH.  I suspect it will be a popular meme as we move into the budgetary furor between Obama, Dems, and the new Republican House.

The argument is, of course, utter nonsense. Nonsense at least in a good government sense.  If X is a program worth doing at some level, it's worth doing at that level.  If not, it can and should be cut back to whatever level makes it worthwhile, which could be zero. How big a program is in comparison to overall expenditures is meaningless. The problem is we can't agree on the "worth doing" and "some level".  The rhetoric of the argument invites us to recognize the problem and move on to some other program of perhaps a bigger size.  It's the converse of what I think Sen. Russell Long said: "don't tax you, don't tax me, tax that fellow behind the tree".

What it means is we'll likely have some across-the-board cuts: spread the pain around.  It's not the best way to administer, but it works in a democracy.

The Grandfather Clause

Michael Kinsley has some wise words on the "grandfather clause" in budget politics. He suspects the Republicans will use it to ensure that budget cuts don't adversely affect anyone today. 

I have to note the clause is popular across the board.  After Reagan busted PATCO and as union power started to fade, there were lots of deals made with employers which included grandfather clauses.  Typically the current employees kept their benefits and salary levels, while new employees started lower with lesser benefits.  I believe that's how the UAW handled its negotiations with the automakers in the 1980's and 90's.  You can easily find other examples. 

It's a shrewd move: the current employees (or beneficiaries of a program in the case of budget fights) are the ones who have the political power; the future employees or beneficiaries may not even know their status.  When they do, as someone who might have to work longer before being eligible for social security, the issue is down the road and much harder to get excited about. 

But, as Kinsley observes, it's not fair, it's not just.

A Liberal Solves the Budget Deficit

The NY Times has an interactive page which permits you to try to solve the budget deficit by choosing among various options to reduce spending and increase revenues.  Here's my solution.  [Updated: here's another try at the solution.]As a good liberal I'm relying on cuts to military spending, returning taxes to Clinton levels, a carbon tax and some tax reforms, and relatively minor tweaks to Social Security and other programs (though I do chop farm programs--sorry  FSA. :-)

As it comes out I'm roughly 60 percent taxes, 40 percent spending cuts.  If it for real, I'd probably phase in the changes gradually.

[Note: When I tried to recreate my solution, thanks to my commentor for pointing out the failure, I probably made different decisions the second time through.]

The Great American Tradition: Hypocrisy

So thinks Kevin Drum, who argues everyone wants to cut government spending, except on the things they like.

I agree.