[Congressional Record Volume 154, Number 83 (Tuesday, May 20, 2008)]
[House]
[Pages H4289-H4290]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE ACRE PROGRAM

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Arizona (Mr. Flake) is recognized for 5 minutes.
  Mr. FLAKE. Madam Speaker, Congress recently approved the farm bill 
and it's now on its way to a Presidential veto. Any farm bill that 
increases the size and scope of government, lacks real reform, 
continues to provide for wasteful agricultural subsidies, and even 
allows millionaires to continue to receive these subsidies, deserves 
the veto that it's going to get. It also uses a lot of budget gimmicks 
to get under the level that would allow it to pass in the first place. 
So I am glad that the President has decided to veto the bill. We should 
sustain it.
  There's another big reason to sustain a Presidential veto of the farm 
bill. It's recently come to light, and we only know this because we got 
the final draft of the bill I believe on the day or just the day before 
that we voted on it so very few of us were able to actually look 
through it and to see what was in it. One of the programs in it is 
called the Average Crop Revenue Election, or ACRE program. This will 
allow farmers starting in 2009 the option of taking a 20 percent 
reduction in direct payments and other farm supports in return for a 
Federal guarantee on their revenue.
  Now as we talked about during the debate on the farm bill, farmers 
can receive direct payments that don't relate to the price of 
commodities at all. They simply receive payments based on acreage that 
they had way back when. These payments total about $5 billion a year. 
They should be done away with completely. But they are now seen as an 
entitlement. We tried and failed to remove those direct payments from 
the bill. Those are received, as I mentioned, by millionaires. In fact, 
a couple, a farm couple, husband and wife in farm and nonfarm income, 
can make as much as $2.5 million and still receive direct payments in 
this legislation.
  If that wasn't enough, this new ACRE program will allow farmers to 
actually claim subsidies at a level far higher than they used to under 
the old bill. Under the farm bill, 2002, which was bloated in itself, 
once crops dropped below a certain price, then some subsidies would 
kick in. But apparently those prices were too low for this new bill. 
And so under this new program, at a far higher threshold, new subsidies 
will kick in.
  The Department of Agriculture estimates that if the price of corn 
drops, for example, to $3.25 per bushel, the program, this new ACRE 
program that is new to this bill would dole out nearly $10 billion just 
to corn farmers. If the price of wheat drops to $4.50 a bushel, wheat 
farmers would be eligible for $2.5 million in assistance. Again, this 
is assistance above and beyond what we have done in the past, or what 
the bill calls for, anyway.
  This is new money that taxpayers are exposed to. This is a lot of 
exposure. It's indecent exposure for the taxpayers. If soybeans, for 
example, drop to about $7 per bushel, that is another $7 billion in 
assistance that will be going out to farmers. Now CBO's estimate of 
this program showed a net savings, but that was largely due to being 
forced to use outdated projections associated with the 2007 baseline.
  The bottom line is we have skyrocketing corn, wheat, soybean prices. 
When we base a new subsidy program off these high level prices, then we 
are going to kick in a lot more readily than we would have otherwise, 
and we are going to be paying out a lot more. The taxpayers will be on 
the hook for a lot more.
  These estimates, I think had they been available, had more people 
been aware of this new subsidy program, I think we would have had a lot 
more votes against the farm bill. It provides Members with a good 
reason, even if they voted for the farm bill last week, to sustain the 
President's veto and say let's go back to the drawing board. We simply 
cannot, cannot expose the taxpayers to this much subsidy.
  Way back when, part of what is driving corn prices so high, for 
example, are the ethanol subsidies that we are providing. We have been 
told for decades these were just to prime the pump. Once we get it 
started, get this program started, we won't need to subsidize ethanol 
any more. Yet, here again the bill we passed last week subsidizes 
ethanol heavily. It also imposes tariffs on imported ethanol.
  Now I believe that some people are worried that those ethanol 
subsidies,

[[Page H4290]]

because we are learning how much they're increasing the cost of food 
and how much degradation of the environment is actually being caused by 
ethanol, that those ethanol subsidies might be going away. This is a 
way to guarantee money still being paid, regardless of ethanol 
subsidies, because the cry will be, Well, if we get rid of ethanol 
subsidies, the price of corn will drop and the taxpayers will be paying 
anyway if the price drops under this new subsidy program. So this is a 
way to simply ensure that we are paying subsidies, regardless. We 
shouldn't be doing so.
  We know that the farm bill, the old farm bill that we just replaced, 
the new farm bill, it pays out unnecessary subsidies, it distorts the 
free market, it forces farmers to plant where they shouldn't plant and 
not plant where they should, and it also distorts our international 
trade obligations and makes it less likely that we can open new 
markets.
  I would urge us, Madam Speaker, to sustain the President's veto of 
this farm bill.

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