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Executive Summary #1284es

May 21, 1999

May 21, 1999 | Executive Summary on

Executive Summary: Crafting a Responsible Budget: The Agriculture Appropriation

The agriculture appropriations subcommittee of the House Appropriations Committee has recommended spending $13.945 billion on agriculture programs in fiscal year (FY) 2000--1.9 percent more than the FY 1999 level but 3.6 percent less than the President's request of $14.475 billion. Significantly, although outlay projections are not yet available, the budget authority figure is $231 million below the level needed to maintain the spending caps that Congress agreed to in the Balanced Budget Act of 1997.

Thus, the subcommittee is attempting to keep the U.S. Department of Agriculture (USDA) on track to help maintain its budget targets and assure that money remains for Social Security reform and tax cuts. By contrast, President Bill Clinton's budget cap-shattering allocations would make Social Security reform and tax cuts much more difficult to achieve.

The subcommittee's display of fiscal discipline, however, masks the fact that many USDA programs have outlived their usefulness and are mere monuments to the apparent immortality of federal programs and the federal government's inability to cut spending. The General Accounting Office recently noted, for example, that the USDA Farm Service Agency "maintains a field office structure that dates back to the 1930s when transportation and communication systems limited the geographic boundaries covered by a single field office and there were a greater number of small, widely disbursed, family-owned farms."

Congress has an opportunity, in considering the agriculture appropriations bill, to change that track record and make serious reductions in spending by trimming or eliminating outdated and wasteful programs or devolving programs to the states.

The Natural Resource Conservation Service, for example, includes programs originally authorized in 1935. The agency, which has been reorganized three times since 1994, claims that it provides technical consulting to 715,000 private, state, and local decisionmakers. Adding $13 million to its funding, as the subcommittee proposes, would provide only an additional $20 worth of consulting service--about 30 minutes of some federal "expert's" time--to each decisionmaker. These functions can be handled better at the discretion of the states. Eliminating or reducing such ineffective spending would make it more likely that Congress will deliver on its pledge to cut taxes and strengthen Social Security.

Congress cannot allocate 100 percent of the off-budget surplus to save Social Security and support military operations in the Balkans without holding the line on domestic discretionary spending. It should build in a cushion against unforeseen emergencies and priorities by seeking additional savings. Fortunately, more than $3 billion in FY 2000 outlays for domestic discretionary spending can be saved in USDA programs if Congress takes steps to (1) eliminate the unnecessary; (2) consolidate the redundant; (3) privatize and make use of market forces; and (4) devolve services to states and local communities.

The current strong economy offers Congress the best opportunity since the Great Depression to return many federal agriculture programs to the states. Revenues are flowing into state treasuries at record rates, enabling them to address local problems with local funding. The ten most rural states, for example, have increased total per capita spending by an average of 27.85 percent since 1990. Congress should take advantage of this opportunity to cut the federal government's fiscal apron strings and let the states stand on their own.

The Congressional Budget Office estimates that discretionary outlays funded by the agriculture appropriations bill will total just over $14.5 billion and that total discretionary outlays for agriculture will be just over $4 billion. Like the USDA, the appropriations bill has become a grab bag of programs that can be eliminated, consolidated, privatized, or devolved. Congress can save $3 billion in agriculture outlays in FY 2000 alone by taking these actions. At the very least, it can maintain its commitment to fiscal responsibility and to protecting the surplus for Social Security by freezing agriculture spending at FY 1999 levels.

Peter Sperryis a former Budget Policy Analyst in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

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