Congress is currently debating the so-called “farm bill,” which Heritage Foundation experts Daren Bakst and Diane Katz call “a multi-billion-dollar tangle of agriculture subsidies, welfare payments, and environmental patronage.”
In fact, this legislation is really a food-stamp bill with farm programs tacked on. As Bakst and Rachel Sheffield explain, this approach allows urban and rural lawmakers to join forces to spend taxpayer money. Continue Reading »
Heritage Foundation vice president Mike Gonzalez explains the liberal mindset on funding PBS to US News:
There’s a reason liberals have taken up Big Bird as the face of public broadcasting and not, say, Bill Moyers. Mr. Bird is feathery and cuddly, while Moyers likes to compare American flag lapel pins to Mao’s Little Red Book. This is how the left undermines our institutions from within: make the effort appear homey and apple pie-ish. Show Big Bird, not Big Bill…
Only PBS and NPR journalists think they’re entitled to a conservative taxpayer’s dime. And this is the nub of the problem. How can an institution that represents the views of only the liberal half of the population, and only grudgingly acknowledges conservatives and their principles in passing, believe it has a claim on all taxpayers?
Do you think the federal government should continue to subsidize PBS?
How wasteful are farm subsidies? Heritage Foundation investigative reporter Lachlan Markay has the scoop:
The U.S. Department of Agriculture has doled out millions of dollars in subsidies to farms on which farming isn’t actually taking place, according a new report from government watchdogs. Billions more have gone towards supporting farms that don’t grow the crops for which they’re being subsidized.
USDA gave nearly $3 million last year to 2,327 farms that had not grown any crops since 2006, according to the report, released last week by the Government Accountability Office. Of those farms, 622 had not grown any crops since 2001.
Read more about this absurdity on the Foundry.
Should taxpayers subsidize students attending Harvard? Photo: Flickr/Matthew Boyer
As President Obama travels the country urging continued federal subsidies for higher education, The Heritage Foundation’s Lindsey Burke weighs in on the issue in an interview with the Washington Post:
Keeping interest rates artificially low will fail to drive down college costs in the long run. Colleges will once again be able to increase costs, and students with easy access to low-interest loans will once again be able to pay. The Obama administration has significantly increased federal involvement in the student loan industry, effectively nationalizing student lending through language buried in Obamacare, by continuing to increase federal subsidies, and by “forgiving” student loans altogether after 20 years on the backs of taxpayers. But these policies only exacerbate the college cost crisis, continuing a vicious cycle whereby college costs rise in tandem with ever-increasing federal subsidies.
Read all Heritage research on higher education here.
What do you think the federal government’s role should be in higher education?
Nicolas Loris
A leading magazine covering energy issues gives The Heritage Foundation’s Nicolas Loris credit for moving energy policy in a more free-market direction.
Energy & Environment Daily reports (subscribers only) on the fate of proposals to extend federal subsidies for wind energy:
But Baucus could face an uphill battle in convincing House Republican conferees to add the tax extenders to a payroll tax-cut bill, if the conservative Heritage Foundation has anything to say about it. Nick Loris, an energy policy analyst at the think tank influential with many in the Republican caucus, yesterday slammed Brownback and Branstad’s letter as equivalent to endorsing subsidies for outmoded VHS tapes.
A study cited by the governors that letting the wind credit expire would lead to nearly 50 percent fewer wind-energy jobs, Loris wrote in a blog post, “means two things: 1.) The subsidy has been artificially propping up jobs in the industry and shifted labor and capital away from other, more productive sectors of the economy; and 2.) Wind can compete without subsidies and the industry won’t entirely disappear.”
Heritage’s dogged opposition to federal support for an array of energy-sector benefits was a contributing factor behind one senior House Republican’s recent decision to put aside his legislative efforts to direct a no-bid federal contract to a uranium re-enrichment company that would create jobs in his home state (E&ENews PM, Jan. 19).
Photo: Wikipedia/Xklaim
Lower taxes are an excellent idea, but if the government grants special tax breaks to certain sectors of the market because they produce a politically beneficial good or service, the lower tax becomes a subsidy in disguise and could ultimately do far more harm than good.
This is exactly what has happened with the energy industry, The Heritage Foundation’s Nicolas Loris explains: the government gives targeted tax breaks to favored firms or types of companies. Continue Reading »
Wikicommons: United States Department of Agriculture
It would also milk taxpayers to pay for dairy subsidies and cost them at the grocery store.
Dairy subsidies and protectionist policies that favor dairy farmers have been around for over 70 years, dating back to the New Deal era.
But as the congressional “super committee” grapples with deficit reduction, all manner of spending is under scrutiny. A small group of farm-state lawmakers is proposing an overhaul of dairy subsidies that would supposedly reduce outlays by $131 million over 10 years.
In a new report, Heritage Foundation regulation expert Diane Katz points out that by limiting supplies to maintain higher prices, consumers are bearing the brunt of increased costs for milk, butter, cheese and various other milk products.
“Americans are taking a double hit on dairy,” she writes. “Tax revenues are used to subsidize producers, and production limits raise the cost of products.”
She notes, the upside of the new Dairy Act would
end the Dairy Product Price Support Program, under which the USDA guarantees the purchase of dairy products to prevent a drop in prices. In practice, the program was dysfunctional; the guarantee of a price floor prompted investment in production facilities for the very products that the government was buying to reduce supply.
It should surprise no one that Solyndra, the solar power company backed by a half-billion dollars in taxpayer loans, filed for bankruptcy. While it is the most recent example of a government-subsidized company to go bust, Solyndra isn’t the first and is likely far from the last.
This isn’t a new phenomenon. Politicians investing taxpayer funds do not feel the same sense of personal responsibility that a private investor would when risking his own money. And we already know the government tends to invest in companies for reasons beyond profitability—and that bureaucrats and politicians are bad at picking winners and losers in the economy.
Heritage Foundation investigative reporter Lachlan Markay describes how these trends have manifested in the Solyndra case: Continue Reading »