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Where would you cut?By Sara Wyant If you talk about the need to reduce the ballooning federal deficit, you'll find plenty of others shaking their heads in agreement. But talk about specific cuts or program elimination and you might lose a few friends along the way. People love to criticize our nation's fiscal mess, but few want to give up their favorite programs or the agencies that they've come to depend on. Eliminate the Public Broadcasting System? Supporters say you can't "kill" Elmo and harm the hundreds of thousands of kids who learn from Sesame Street. But unless lawmakers find a way to crack down on spending, the federal government's budget deficit is projected to reach nearly $1.5 trillion by the end of this fiscal year. Sen. Tom Coburn (R-OK) decided to make the process a little easier by asking the Government Accountability Office to look at all federal programs, agencies, offices, and initiatives that have duplicative or overlapping goals or activities. He says the report points to savings of $100 billion or more. The list spans a range of government mission areas from agriculture to energy to defense and social services, providing ample ammunition for any lawmaker looking to kill or consolidate government programs. Here are some of the ag-related highlights in this 345-page report: Reducing farm program payments. GAO cites several reasons why direct payments should be reconsidered, including the receipt by farmers of direct payments even in years of record farm income; direct payments are concentrated amongst the largest recipients; they were expected to be transitional, and that recipients of farm program payments have higher incomes, on average, than other tax filers. "When farm programs were first established, farmers had lower incomes on average than other Americans, but now the opposite may be true," GAO wrote. Congress could consider lowering payment or income eligibility, reducing the acreage base eligible for direct payments, or terminating them. GAO noted that the National Farmers Union and Iowa Farm Bureau have recommended phasing out or terminating direct payments altogether to "bolster other farm programs." Ethanol production. GAO says the Volumetric Ethanol Excise Tax Credit, which provides a $5.4 billion tax credit, and the Renewable Fuels Standard both create demand for domestic ethanol production, and both result in substantial loss of revenue to the U.S. Treasury. If left unchanged, VEETC's annual cost to the Treasury could increase from $5.4 billion in 2010 to $6.75 billion in 2015, when the RFS requires 15 billion gallons of conventional biofuels. "The fuel standard is now at a level high enough to ensure that a market for domestic ethanol exists in the absence of the ethanol tax credit and may soon be at a level beyond what can be consumed by existing vehicle infrastructure." GAO recommends consideration of several alternatives for VEETC, among them: keeping it at current levels, eliminating the credit, and changing the credit to a counter-cyclical program. Economic development. With 80 economic development programs at four agencies‹Department of Agriculture, Department of Commerce, Department of Housing and Urban Development, and the Small Business Administration‹GAO found plenty of overlap. Many of the programs are differentiated by characteristics such as geography, income levels and population density. "HUD, SBA and USDA appear to be collaborating for some of their common programs." However, the four agencies don't appear to be trying to "develop compatible policies or procedures," or searching for ways to leverage physical and administrative resources. GAO also cited lack of information on program outcomes. USDA's Office of Rural Development has yet to implement the USDA Inspector General's 2003 recommendation to measure the accomplishments of one of its largest rural business programs, the Business and Industry Guaratneed Loan Program, which cost about $53 million in fiscal 2010. Water along U.S. Mexico Border. Seven federal agencies, including USDA, spent at least $1.4 billion from fiscal 2000 to 2008 on numerous projects to meet the drinking and wastewater needs of these predominantly rural areas. But GAO says these projects remain "uncoordinated and fragmented, and their delivery continues to be inefficient and ineffective." In one example, HUD gave more than $860,000 in grant funds to a Texas utility from 2004 to 2006 for water and waste pipelines, but they were not used by 2009. Why? The utility had not been able to obtain loans from USDA and other agencies to build a well. Flex fuels. Numerous laws and federal orders set requirements for the government's vehicle fleet to reduce reliance on petroleum and reduce greenhouse gas emissions, but strict requirements often lead managers to use conventional fuels. For example, E85 was only available at one percent of U.S. fuel stations in 2009, prompting many agencies to request waivers. According to Department of Energy, about 55 percent of the government's alternative fuel vehicles received a waiver. "Virtually every agency has succeeded in acquiring more AFVs, but there have been only modest reductions in petroleum use." GAO says DOE and General Services Administration are working to develop proposed legislation that would create broader requirements targeted at fleet efficiency. Biological threats. Noting that a bipartisan commission gave the nation a failing grade in 2010 for efforts to prevent biological attacks, GAO says there are more than two dozen presidentially appointed individuals and numerous federal agencies with some responsibility for biodefense. But there is "no one individual or entity with responsibility, authority and accountability." Neither the Office of Management and Budget nor the federal agencies account for biodefense across the federal government, so no record of how much we are really spending exists. A private analysis estimated at least $6.48 billion. GAO calls for greater accountability by designating leadership for all of the agencies involved. Food assistance. With oversight from USDA, the Department of Homeland Security and the Department of Health and Human Services, along with numerous volunteer groups, taxpayers spent more than $62.5 billion on 18 food and nutrition assistance programs in 2008. GAO says program rules that require separate applications and collection of similar information by multiple entities often lead to administrative costs higher than necessary. One possible remedy: USDA could simplify, streamline or better align eligibility procedures across programs, says GAO. Another option: Consolidate or eliminate overlapping programs. In fiscal years 2007, 2008, and 2009, USDA tried to reduce duplication by eliminating the Commodity Supplemental Food Program. But Congress continued to fund it, the report notes. Food safety. While noting that GAO has made "numerous recommendations" over the last decade to address the "fragmented federal oversight" of the nation's food supply, concerns remain. GAO says USDA and the Food and Drug Administration, along with the Office of Management and Budget, should develop a government-wide performance plan for food safety that includes results-oriented goals, performance measures, and a discussion of strategies and resources. Alternatives, such as a single food safety agency or centralized, executive leadership, should be considered. Reducing fragmentation is not expected to produce "significant" cost savings, says GAO, but new costs may be avoided by preventing further fragmentation. Editor's note: Agri-Pulse Editor Sara Wyant can be reached at www.agri-pulse.com.
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