In 2003, I wrote a column about how the ballooning U.S. deficit and debt could force legislators to rein in spending, and agriculture could be a target.
Canadian farmers knew this from the budget slashing of the mid-1990s that killed the Crow transportation subsidy. In 2003, the Congressional Budget Office forecast that the U.S. federal debt held by the public would grow to $6.4 trillion by 2013.
In fact, it soared to $7.5 trillion by the end of 2009 and is expected to double to $15 trillion by 2020 with exploding annual deficits due to the recession and stimulus programs.
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That is unsustainable. U.S. politicians are whistling past the graveyard, proposing only modest spending controls. But already agriculture is a target. President Barack Obama has asked Congress to cut subsidies to farmers with sizable off farm gross income or more than $500,000 in on-farm gross income. The current cutoff is $750,000.
He would also pare crop insurance. The moves are estimated to save $10 billion over 10 years. The U.S. farm lobby has friends in Congress and it won’t be easy to get cuts.
But if China ever decides it no longer wants to fund the U.S. debt, the upheaval will force politicians to cut what years of international negotiation could never touch.
