Tuesday, August 18, 2009

Born Again Pork-Buster

Barack Obama came out swinging against congressional earmarks (formerly known as pork projects) yesterday, during an appearance before a veterans group in Phoenix. It was a message custom made not just to please the vets but to boost flagging poll numbers:

“Every dollar wasted in our defense budget is a dollar we can’t spend to care for our troops, or protect America or prepare for the future,” Obama told a Veterans of Foreign Wars convention in Phoenix. “If a project doesn’t support our troops, if it does not make America safer, we will not fund it. If a system doesn’t perform, we will terminate it. And if Congress sends me a defense bill loaded with a bunch of pork, I will veto

But the president hasn't landed a glove on Congressional earmarks in the early rounds of this bout, despite earlier vows to veto earmark-laden spending bills, and the practice of earmarking is bigger than ever in Congress, according to Washington waste-watchers, despite Speaker Pelosi's now hollow-sounding pledge to clean up Congress.

I'll believe it when I see it, in other words. And it will be interesting to see if the president's no-earmarks stance extends to the many non-military spending bills now in the works. If so, he ought to start limbering-up his veto hand now, lest a cold start lead to a repetitive motion injury later this year.

It will also be interesting to see how Obama the government waste warrior deals with another pork-related issue that made headlines yesterday -- a request from American hog farmers for a $250 million federal bailout.

"The [National Pork Producers] council wants the USDA to spend at least $150 million on pork products for various programs, including immediately buying up to $50 million of pork for federal food programs, using fiscal 2009 funds before the fiscal year ends on Sept. 30.

The USDA spent $62.6 million in 2008 buying pork for food programs, according to the council. The producers are also asking Congress to lift a spending cap that limits spending on pork for certain food programs. In addition, the council requested $100 million to help address the H1N1 virus, including $70 million for swine disease surveillance."

The report indicates that it wouldn't be the first time the feds have propped up the industry through pork buy-up programs. This crutch probably accounts for the oversupply of product, which keeps prices lower than some farmers can survive. Propping up the less-efficient producers will only forestall the day of economic reckoning that faces some hog farmers. A bailout may keep consumer prices low, at least at the meat counter, but it does so by picking the publics' pocket with another hand, in order to pay for the hog farmer handouts. The oversupply problem isn't addressed, which leads to a continuing cycle of low prices and government bailouts.

Also hurting hog farmers are "commodity costs that reached record highs last summer," according to the story, though the reporter fails to explain the federal government's role in keeping commodity costs so high. Last summer's spike in oil and gasoline prices undoubtedly played a part in this, but an equally important factor was increased demand for corn, spurred by a government-mandated ethanol craze.

Hog farmers feed their animals corn. But corn suddenly became much more expensive last year, because it was being used for motor fuel, to meet production quotas established by politicians. Ethanol also constitutes a massive rip-off of taxpayers, because we're directly subsidizing, on a per gallon basis, the production of a fuel that doesn't make economic or environmental sense -- but is popular with panacea-pushing politicians. So the hardships being visited on hog farmers are in part the result of federal efforts to benefit corn growers, via ethanol mandates. It's a case study of why government manipulations of the market, through subsidies and mandates, almost always leads to a cascading series of new problems.

Obama can't begin to trim the deficit or debt without at some point saying "no" not just to earmarks, but to the pleading classes that step forward almost daily, asking for a handout. But that's incredibly hard to do when you've already offered direct or indirect bailouts to every conceivable American industry that asked for one.

How can Obama say "no" to hog farmers, when he's already lavished federal money on bankers, brokerage houses and automakers, and when he's spending wildly in a scatter shot approach to economic stimulus? How can he say "no" to legislative branch pork, even while doling out executive branch pork to every wheel that starts squeaking -- or squealing, in the case of pig farmers?

It won't be easy; that's the short answer. But it's the ultimate test of whether this president will ever get a handle on runaway spending.

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