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More ‘voodoo economics’ in farm bill proposal?

Government accounting practices have always been more art than science. Some of us can remember the late Sen. Everett Dirksen’s saying: “A billion here and a billion there and pretty soon it adds up.”

Agriculture Secretary Mike Johanns grew up in a different area than the legendary Illinois Republican – Johanns hails from Iowa by way of Nebraska – but he may have taken lessons from another Illinois native, Ronald Reagan.

When Johanns unveiled the Bush administration’s 2007 farm bill proposal in January, he promised to deliver $5 billion more in producer support than if the 2002 farm bill were reauthorized. At the same time, he said, they reportedly would save $10 billion compared to the 2002 law.

In a speech at an Informa Economics’ conference earlier this month, Johanns repeated those numbers, attributing the spending reductions to unspecified “deficiencies realized elsewhere.”

Maybe there’s a plausible explanation, but the claim smacks of “voodoo economics,” the term President George H.W. Bush used for President Reagan’s supply side economics before he became his vice presidential running mate in 1980.

Later in the Informa Economics speech, Johanns criticized the House and Senate fiscal 2008 budget resolutions that create reserve funds of $20 billion and $15 billion to help increase the Congressional Budget Office baseline for farm spending.

Johanns pooh-poohed the idea of the new reserves, which, in the past, he said, actually represented funds set aside for specific purposes and not money that may or may not be available in the future.

“I hesitate to even call them funds because they’re not funds,” he said. “They’re a concept, and agriculture will be competing with, again not with funds, but with this concept of a reserve. Any use of these concepts may have to be offset with revenue increases. That’s a fancy way of saying tax increases.”

In a press conference a few days later, House Ag Committee Chairman Collin Peterson called the $20-billion reserve fund in the House budget resolution a means of recapturing some of the $60 billion agriculture “lost” when the CBO recalculated its baseline.

“I think we made a $60 billion contribution to deficit reduction,” the Minnesota Democrat said. “Now we’re simply asking for $20 billion to be put back. I’ve been in discussions with the leadership on that.”

While he didn’t mention Johanns, Peterson said the ag committee is justified in asking for the money. “It goes back to things like farm loans that are charged to us, but we get no credit for the funds when the loan is paid.”

He said he could write a farm bill with no additional funding “that is saleable in my district. But I was in California for three days last week, and I can tell you that such a bill would not be very popular in California. We need money if we’re going to do new things.”

At least Peterson isn’t promising more smoke-and-mirror accounting to provide farmers more help.

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