USDA bracing for 'significant' cuts to rural, food stamps, crop insurance programs
Andrew Harrer | Bloomberg | Getty Images. Perdue is the ninth Cabinet official in line for presidential succession. ·CNBC
Jeff Daniels
The Trump administration's budget blueprint for fiscal 2018 has the U.S. Department of Agriculture bracing for "significant" cuts to rural development, food stamps and crop insurance programs.
"I don't think there's any reason to try to sugar coat this," said USDA Secretary Sonny Perdue in a conference call with reporters to discuss the administration's fiscal 2018 budget proposal for the agency. "I've communicated with our team at USDA and just said 'look, when times are tough we just dig down and do more' — and that's what we will do here."
The White House also is proposing legislation to tighten eligibility on food assistance programs for the poor. More than 43 million Americans are already getting monthly food stamp benefits and the federal cuts are likely to affect millions nationally.
"It's obvious that USDA as well as many parts of government will face a significant funding reduction. The president campaigned on the fact that we we're going to reduce deficits, and that's what he's doing in this budget."
Approximately three-fourths of the USDA's budget goes to mandatory programs such as food stamps, or the federal government's Supplemental Nutrition Assistance Program (SNAP), crop insurance and some conservation programs.
Overall, the president's discretionary funding request for USDA in fiscal 2018 is about $18 billion, a decline of about 21 percent from the 2017 annualized continuing resolution level.
At the same time, the department plans to slash about 5.5 percent of its total workforce.
"Obviously, some may see this as a glass half full," said Perdue. "I see this as an opportunity to demonstrate to the American people that we can do more with less — and we will do more with less."
Perdue, a former governor of Georgia, has only been on the job as secretary for five weeks and agency officials conceded he had no input on the White House's proposed fiscal 2018 budget for the USDA.
The administration is sending proposed legislation to Congress to make changes to some of the mandatory USDA programs, which include outlays for food stamps or SNAP benefits as well as crop insurance and some conservation programs.
Michael Young, USDA's acting deputy secretary, told reporters Tuesday those legislative proposals would save $240 billion over a 10-year period. He said about $194 billion of the savings would come from cuts to the SNAP program and another $46 billion from other USDA programs.
Yet Perdue last week testified before the House Agriculture Committee and called SNAP "a very important, effective program. As far as I'm concerned we have no proposed changes. You don't try to fix things that aren't broken."
Given the SNAP program changes now sought by the White House, however, last week's remarks by Perdue seem odd. Perdue didn't address the contradiction directly during the call.
Instead, Young sought to defend the secretary, suggesting that the administration's proposed fiscal 2018 budget still was following the law by funding SNAP and that any changes would be made legislatively.
"We include the full amount needed to finance the estimated SNAP participation level," said Young. "The budget also does include some proposed legislative changes. That would need to be enacted in order for them to make any kind of reductions or changes to the mandatory programs.
In the crop insurance area, there's a proposal to limit crop insurance premium subsidies. There's also plan that still needs congressional approval that would limit crop subsidies to producers making adjusted gross incomes of $500,000 or less.
As for SNAP, one proposal would require states to begin matching the federal benefits up to 25 percent. Young said the estimated 10-year savings from that matching plan would save the U.S. government about $116 billion.
The Trump administration also wants to tighten some of the eligibility requirements of the federal nutrition program benefits. There's also a plan to cap the large household amounts to the benefit for just six members.
The government also wants to tack on additional fees to retailers participating in redeeming SNAP benefits.
"A budget proposal is about priorities for our county — and the budget the president released [Tuesday] is filled with misplaced priorities that would be terrible for America's food system, our people and our nation," said Willy Ritch, acting executive director of the Food Policy Action, a non-profit advocacy group.
Added Ritch, "Under the president's budget, families, seniors, and farmers who are already struggling would find it harder to put food on the table and make ends meet. This budget is also a bad deal for rural America by eliminating conservation and rural development programs that protect our vast precious lands, waterways and watersheds and promote economic growth in rural America."
In rural development, the program is expected to total nearly $35 billion in loans and grants but that funding is down about $3 billion from the fiscal 2017 level. The water and wastewater loan and grant program would be eliminated in the new budget too, along with the agency's rural business program.
The administration also isn't planning to fund a direct single-family rural housing loan program, which was targeted to assist low-income applicants.
Last year, the Heritage Foundation, a conservative think-tank, wrote a report urging the federal government to shut down its rural housing loan program. Heritage argued that the default rate of the single-family home guarantee program runs "at least double that of a comparable single-family loan guarantee program."
In research, economics and education, meanwhile, the department proposed cutting discretionary funding next year by almost 15 percent below the 2017 level. The agency also plans to shutter 17 research locations out of a total of 90, which includes agriculture laboratories.
The USDA plans to eliminate some international food assistance programs, including the so-called "Food For Peace" and the McGovern-Dole international food assistance program named after former Sens. George McGovern and Bob Dole.
Ironically, Dole was a supporter of Trump during the campaign and the international food program bearing his name has helped an estimated 40 million needy people in impoverished countries since its inception in 2003.
In the White House's "America First" budget blueprint document released Tuesday, it justified the elimination of the McGovern-Dole program by contending it "lacks evidence that it is being effectively implemented to reduce food insecurity."
