When I was a kid, my favorite Superman comics featured Bizzaro World, a place where everything was topsy-turvy and kryptonite was good for you. Today, you can find a real-life congressional version of Bizzaro World at the House Agriculture Committee, a place where deficit spending is rarely criticized and corporate welfare is stoutly defended. On Wednesday, the Republican committee chairman, Frank Lucas, successfully blocked a small but bipartisan effort to reduce agricultural spending — demonstrating that in Lucas’s political Bizzaro World, Republicans want to spend and spend.
The issue was how to pay for what the United States owes Brazil as a result of Brazil’s win at the World Trade Organization in its case against U.S. cotton subsidies. As part of a WTO settlement reached last year, the United States agreed to fork over $147.3 million annually to Brazil’s Cotton Institute.
Before you start sputtering in outrage, you should know that in March 2010 Brazil published a list of over 100 U.S. goods that would be subject to import tariffs of up to 100% and a preliminary list of U.S. patents and intellectual property rights that Brazil could restrict if no cotton settlement was reached. Trade actions like this frighten U.S. exporters, as they not only are shut out of the importing country’s market but also stand to lose market share — perhaps permanently — to third-country competitors.
Also bear in mind that the $147.3 million annual payment need not go on forever — it will be revisited in 2012 when current U.S. farm subsidy legislation expires and new subsidy programs are enacted. Thus, the payment is an incentive for U.S. lawmakers to (hopefully) make the changes necessary to end Brazil’s WTO case.
Meanwhile, however, Congress has to find that $147.3 million to pay Brazil now. Congressman Jeff Flake (R-AZ), a tireless fiscal conservative, proposed reducing direct payments to U.S. cotton farmers to fund the obligation to Brazil. No, said Lucas. Congressman Earl Blumenauer (D-OR) had an amendment that would have reduced subsidies by capping annual farm payments at $125,000 per farm operation. Lucas nixed that too. Finally, Lucas blocked an effort to limit certain agricultural payments to producers with an adjusted gross income of over $250,000.
Recall that Lucas is a member of the party that’s supposed to treat big government like kryptonite. But not in Lucas’s Bizzaro World, where big government is good and spending cuts are bad.
Where’s the House Republican leadership’s outrage over the damage done to the GOP brand by a party teammate who successfully thwarts attempts to reduce corporate welfare? The leadership’s pronouncements about fiscal responsibility are nice, but when it comes to making tough choices about a traditional Republican constituency (e.g., farmers), why must Bizarro World win?
Senior Economics Fellow
Caesar Rodney Institute