The Coming of the Perpetual Milk Cliff
Only in Washington could they concoct a scheme in which we are forced to increase spending on market-distorting subsidy programs lest we suffer the pain of further market distortions through government price controls. Yet, that is the case with the so-called dairy cliff that would have been crossed had Congress not passed an extension of the current farm bill.
Last year, conservatives successfully blocked the enactment of a new 5-year farm bill, which would have permanently locked in Obama’s food stamp spending levels and would have created new crop insurance and price support programs. Unfortunately, proponents of the bloated farm bill have always been able to hold an archaic bogyman over those of us who seek to stymie the farm bill. Pursuant to a silly 1949 act of Congress, every time we fail to renew expiring farm programs, the government must begin imposing Soviet-style price controls on milk by decreasing supplies through massive purchases of milk, butter, cheese, and other dairy products. Under permanent law, the USDA would begin purchasing dairy products at a rate of $38.54 per hundredweight, more than double the current price ($18 per hundredweight). This market manipulation could double the price of milk, dairy products, and everything else up the food chain.
In a sane world, both houses of Congress would convene and repeal this inane and outdated law within a few minutes by unanimous consent. That way we could debate a long-term farm bill without having the sword of the 1949 law brandished over our necks and forcing Congress to rush through bad legislation.
However, Congress is not sane, and they have no plans to repeal the law. That’s why they snuck in a 9-month extension of the current farm bill into the politicians’ cliff bill (H.R. 8). The problem with the extension is that it continues to offer direct subsidies to farmers, something that both sides have already agreed to terminate. These subsidies disproportionately benefit larger farms, but liberals have no problem with inequality when it is in the form of government spending instead of taxation. It also includes $550 million in dubious emergency funding, which is not offset with other savings within the fiscal year. Furthermore, this bill does nothing to end the ridiculous practice of pairing food stamp spending with agriculture programs.
The latest ephemeral trend in Washington is to create a contrived crisis for the purpose of growing government, increasing spending, or raising taxes. The new “milk cliff” is just the latest in the bag of tricks held by the permanent statist class. We will face the same pressure to pass a bad farm bill in September in an effort to avoid the new milk cliff. This can be avoided. We need one good conservative to introduce a bill to repeal the 1949 price control law to avoid a further milking of the taxpayer.
Cross-posted from The Madison Project