Wednesday, June 12, 2013

Has there ever been a GOOD farm bill?

An editorial in the Chicago Tribune is entitled "Senate passes a bad farm bill." And that begs the question: has the Senate--or the House--ever passed a good farm bill? We all know what farm bills are about. Pork (figuratively, but sometimes also literally). That's been the case since 1933, when the first so-called farm bill--the Agricultural Adjustment Act of 1933--was passed.

The 1933 legislation was passed during the Great Depression, so we might be inclined to cut the federal government a little slack for offering up various subsidies, subsidies that were paid for by a special tax levied on companies that used the agricultural products in question, like cotton, corn, tobacco, and even hogs. But then again, we might not. Especially since the bill was ultimately found to be unconstitutional--only partly because of the above tax--by the Supreme Court in 1936 (United States v. Butler). It's worth quoting from that ruling, I think. These are the specific findings of the Supreme Court, the things held by the Court:
(1) The Act invades the reserved powers of the States. P. 68.

(2) Regulation and control of agricultural production are beyond the powers delegated to the Federal Government. P. 68.

(3) The tax, the appropriation of the funds raised, and the direction for their disbursement, are but parts of the plan -- the means to an unconstitutional end. P. 68.

(4) The power of taxation, which is expressly granted to Congress, may be adopted as a means to carry into operation another power also expressly granted, but not to effectuate an end which is not within the scope of the Constitution. P. 69.

(5) The regulation of the farmer's activities under the statute, though in form subject to his own will, is, in fact, coercion through economic pressure; his right of choice is illusory. P. 70.

(6) Even if the farmer's consent were purely voluntary, the Act would stand no better. At best, it is a scheme for purchasing with federal funds submission to federal regulation of a subject reserved to the States. P. 72.

(7) The right to appropriate and spend money under contracts or proper governmental purposes cannot justify contracts that are not within federal power. P. 72.

(8) Congress cannot invade state jurisdiction by purchasing the action of individuals any more than by compelling it. P. 73.

(9) There is an obvious difference between a statute stating the conditions upon which moneys shall be expended and one effective only upon the assumption of a contractual obligation to submit to a regulation which otherwise could not be enforced. P. 73.

(10) Owing to the supremacy of the United States, if the contracts with farmers contemplated by the Agricultural Adjustment Act were within the federal power to make, the States could not declare them void or prevent compliance with their terms. P. 74.

(11) Existence of a situation of national concern resulting from similar and widespread local conditions cannot enable Congress [p4] to ignore the constitutional limitations upon its own powers and usurp those reserved to the States. P. 74.

(12) If the novel view of the General Welfare Clause now advanced in support of the tax were accepted, that clause would not only enable Congress to supplant the States in the regulation of agriculture and of all other industries as well, but would furnish the means whereby all of the other provisions of the Constitution, sedulously framed to define and limit the power of the United States and preserve the powers of the States, could be broken down, the independence of the individual States obliterated, and the United States converted into a central government exercising uncontrolled police power throughout the Union superseding all local control over local concerns. P. 75.

(13) Congress, being without power to impose the contested exaction, could not lawfully ratify the acts of an executive officer in assessing it. P. 78.
That's quite the list, isn't it? Look especially at numbers (2), (8), (11), and (12). To call this a smackdown of Federal authority would be something of an understatement. The Court is very clearly admonishing the Federal Government, both for its attempt to exercise powers it does not possess and for its attempt to usurp the authority of State governments, not to mention the unfair taxation of a limited group as a means to benefit another group (a more clear-cut case of wealth transfer by fiat would be hard to find).

Now look at some of the provisions in the current farm bill being criticized in the Chicago Tribune article:
The Senate bill perpetuates a sugar subsidy that raises the price of sweets and shuts out foreign competition. Great for the sugar industry, terrible for consumers.

The bill creates a new sweetheart deal for the dairy industry: an insurance program that will drive up prices by triggering production cuts when there's an oversupply of product. Good for the dairy industry, terrible for consumers.

The bill perpetuates the vast government subsidies for crop insurance. The government will continue to pay more than half the cost of the insurance. Farmers get subsidized and get a perverse financial incentive to take excessive risks without having to worry if their crops fail. Taxpayers get gouged.
All of these actions, whether wise or not, seem to be fundamentally at odds with the Court's ruling in 1936, no? And there's nothing particularly new in this farm bill, really. Such subsidies and programs have been authorized by Congress (and signed into law by Presidents) for decades. The multi-year farm bill of 1965 (the first of its kind in that regard)--the Food and Agricultural Act of 1965--firmly established these things, creating a process wherein subsidies and the like are simply "re-upped" every five years or so. But how, given the Court's ruling above?

Simple. If one believes Wikipedia, in 1938 a new farm bill was passed that corrected the constitutional problems:
In 1936, the Supreme Court decided in United States v. Butler that the act was unconstitutional for levying this tax on the processors only to have it paid back to the farmers. Regulation of agriculture was deemed a state power. However, the Agricultural Adjustment Act of 1938 remedied these technical issues and the farm program continued.
This, by the way, is why it's dangerous to trust sources like Wikipedia. Look again at one of the things (2) held by the Court in 1936: "Regulation and control of agricultural production are beyond the powers delegated to the Federal Government." And whomever authored the Wikipedia bit would have you believe this qualifies as a technical issue? Really? Hilarious.

But the answer is actually still simple, it's just not what is on that Wikipedia page. The 1938 bill was also challenged and ultimately, the Court upheld its constitutionality in 1939 (Mulford v. Smith). Amazingly, the same Supreme Court Justice penned both decisions, Justice Owen Roberts (quite the coincidence, no?). For the Court was indeed divided on these issues, though the second was the closer decision. If Roberts had remained consistent, the 1938 bill would have gone the way of the 1933 one. But he didn't. He switched "sides" on FDR's New Deal policies in late 1936, after the ruling in Butler. Why? Most historians agree that he did so because he was talked into accepting these policies by other Justices due to increased popular approval of them and of FDR, and--more significantly--because of FDR's threats to "pack the Court" by increasing the number of Justices via new legislation.

Today, we still feel the reverberations of the 1939 decision, especially in the arena of farm bills, where federal control over the agricultural industry via handouts, subsidies, and the like is not only fully accepted (by most), but also expected. Look at the propaganda on farm bills being served up by the generally respected org Farm Aid. Reading that, one would think there is just no controversy about what these bills do, whatsoever. Yet the overreach is apparent to those with a sense of history (not to mention with a knowledge of the Constitution).

So sure, there are some "problems" with the current farm bill, with respect to its specifics. But such a take sugarcoats the real issue with these bills: they're unconstitutional as a matter of course. Thus, there can never, ever be a GOOD farm bill...

Cheers, all.