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May 23 2013

Senator Flake: Taxpayers Deserve a Far Leaner Farm Bill

Flake Introduces Farm Bill Amendments Generating Savings and Trimming Excess

WASHINGTON, D.C. – United States Senator Jeff Flake (R-AZ), today introduced amendments to the Senate farm bill that would generate significant savings for taxpayers.

“At a cost of nearly $1 trillion, this farm bill ought to be put out to pasture,” said Flake. “Congress should implement these and other commonsense reforms that would save taxpayers tens of billions.”

Flake-McCaskill Amendment #1012: Strike Explicit Prohibition on Taxpayer Savings from Standard Reinsurance Agreements

Summary: This amendment overturns a provision in the underlying bill prohibiting the United States Department of Agriculture’s (USDA) Risk Management Agency (RMA) from realizing any significant savings in the event of a renegotiation of the Standard Reinsurance Agreement (SRA). The SRA is an agreement negotiated between the RMA and private insurance companies participating in the Federal Crop Insurance Program that determines the level of risk shouldered by the federal government and private insurance companies and the level of subsidies authorized to be paid to the private insurance companies for A&O expenses. In 2011, the USDA estimated it realized $6 billion in taxpayer savings through a renegotiation of the SRA in 2010. According to a recent analysis, private insurance companies have netted $3.1 billion in underwriting gains and A&O payments under the current SRA. The amendment would not require a new SRA to achieve significant savings, it would simply not prohibit a new SRA from doing so.

Supporters: R Street Institute, Americans for Tax Reform, FreedomWorks, Environmental Working Group, American Conservative Union, Taxpayers for Common Sense, Campaign for Liberty, National Taxpayers Union, Competitive Enterprise Institute, Cost of Government Center, Council for Citizens Against Government Waste, ConservAmerica, Taxpayers Protection Alliance, Less Government, Center for Individual Freedom

Flake Amendment #1013: Harvest Price Option Premium Subsidy Prohibition

Summary: The amendment prohibits premium subsidies from being paid on any federal crop insurance policy with a harvest price option (HPO).  Under an HPO, if the price of the covered crop increases between planting and harvest, the farmer’s revenue guarantee is recalculated using the higher harvest price. As a result, HPOs can cause in a farmer to receive more revenue than was guaranteed at planting. According to a recent analysis, this climbing revenue gurantee allowed corn and soybean producers  to receive $6 billion more in 2012 crop insurance payouts than they were originally insured for.  The Congressional Budget Office (CBO) estimates this amendment would save $7.7 billion over 10 years. The amendment would not limit the ability of the RMA to offer HPO policies, it would simply prohibit premium subsidies.

Supporters: R Street Institute, Americans for Tax Reform, Americans for Prosperity, Environmental Working Group, Club for Growth, Heritage Action for America, FreedomWorks, American Conservative Union, Taxpayers for Common Sense, Campaign for Liberty, National Taxpayers Union, Competitive Enterprise Institute, Cost of Government Center, Council for Citizens Against Government Waste, ConservAmerica, Taxpayers Protection Alliance, Less Government, Center for Individual Freedom

Flake Amendment #1014: Amendment in the Form of S.446, Crop Insurance Subsidy Reduction Act

Summary: This amendment reduces taxpayer subsidies that are paid to reduce the premiums of federal crop insurance policyholders to pre-Agriculture Risk Protection Act of 2000 levels. CBO estimates the amendment would save $40.1 billion over 10 years.

Supporters of S. 446: R Street Institute, Taxpayers for Common Sense, Club for Growth, Competitive Enterprise Institute, Environmental Working Group, Council For Citizens Against Government Waste, FreedomWorks, Heritage Action for America, National Taxpayers Union, Americans for Prosperity, American for Tax Reform, American Commitment, Campaign for Liberty, Center for Individual Freedom, ConservAmerica, Cost of Government Center, Less Government, Taxpayers Protection Alliance.

Flake Amendment #1015: Amendment in the Form of S. 937, Protect Against Ideology-Based Targeting Act

Summary: First introduced as a stand-alone bill, this amendment prohibits the Internal Revenue Service (IRS) from developing discriminatory methodologies for organizations under or applying for 501(c)(3) or 501(c)(4) status due to the ideologies expressed in the organizations’ names or purposes and requires the semi-annual report to Congress from the Treasury Inspector General for Tax Administration to include information about complaints of ideology-based targeting. The Protect Against Ideology-Based Targeting Act is a direct response to the IRS targeting conservative-leaning groups during the 2012 election cycle to examine their efforts in compliance with the IRS determination of a tax-exempt organization.

Flake Amendment #1071: Strike New “Shallow Loss” Crop Insurance Option

Summary: This amendment strikes a provision in the underlying bill that would establish a Supplemental Coverage Option (SCO) in the Federal Crop Insurance Program.  This new crop insurance policy is authorized to address the issue of "shallow losses" or losses incurred by producers that are not large enough to receive an indemnity payment under existing policies. The SCO would be available for purchase by crop producers as an additional policy to supplement the policyholder’s underlying policy. Taxpayers, who already subsidize nearly 63 percent of the premiums for existing crop insurance policies, will also subsidize 65 percent SCO premiums under the farm bill. Striking the SCO provision from the bill would save $2.2 billion over 10 years according to CBO.

Flake Amendment #1072: Study to Recommend Offsets for Subsidies to Brazilian Cotton Farmers

Summary: This amendment requires USDA to issue a report to Congress for the purpose of identifying and recommending $147.3 million in annual savings between 2013 and 2018 from agricultural support payments expected to be made to U.S. cotton producers for the express purpose of offsetting annual payments of $147.3 million to the Brazilian Cotton Institute. The so-called "Brazil cotton case" is a long-running World Trade Organization (WTO) dispute won by Brazil that found that U.S. cotton subsidies violated international free-trade agreements. Facing tough WTO sanctioned retaliatory trade countermeasures from Brazil and unwilling to effectively reform the U.S. cotton subsidies, Congress and the Administration have elected to continue to prop up U.S. cotton producers and subsidize the Brazilian cotton industry through $147.3 million in annual payments to the Brazilian Cotton Institute since 2010.

Supporter: Club for Growth

Flake Amendment #1073: Strike Cotton Shallow Loss Carve Out

Summary: This amendment strikes a provision in the underlying bill that would establish the Stacked Income Protection Plan (STAX). Only cotton growers are eligible to participate in the STAX program. STAX would supplement the existing crop insurance policies of U.S. cotton growers, paying indemnities when cotton growers experience "shallow losses" that are not large enough to receive an indemnity payment under underlying policies. Taxpayers will subsidize 80 percent of cotton grower premiums under the farm bill. Striking STAX from the bill would save $3.7 billion over 10 years according to CBO. 

Flake Amendment #1082: Stewardship End Result Contracting

Summary: This bipartisan amendment makes uniform the fire-liability provisions in stewardship contracts. Stewardship contracting authorizes the Forest Service and the Bureau of Land Management (BLM) to enter contracts that combine timber harvesting with forest restoration work. This authority has proven successful in reducing fire hazards, restoring watersheds, and promoting healthy forests. Currently, service contracts, which are the most commonly used stewardship instrument, do not include the same limited-liability clause as timber contracts. By incorporating the timber provision into service contracts, companies are more likely to participate in the stewardship program, protecting communities and fostering healthy forests. According to the Congressional Budget Office (CBO) the amendment would not come at a cost to taxpayers.

Begich-Flake Amendment #936: Crop Insurance Transparency

Summary: This amendment requires USDA to make available to the public the name of each individual or entity who obtained federally subsidized crop insurance; the amount of premium subsidy received by the individual entity; and the amount of the federal portion of indemnities paid in the event of a loss. The amendment would also require the USDA make available to the public the underwriting gains earned by private insurance companies through participation in the federal crop insurance program including the amounts paid to subsidize administrative and operating (A&O) expenses and the federal portion of indemnities and reinsurance.

Supporters: R Street Institute, Americans for Tax Reform, Americans for Prosperity, Heritage Action for America, Environmental Working Group, FreedomWorks, American Conservative Union, Taxpayers for Common Sense, Campaign for Liberty, National Taxpayers Union, Competitive Enterprise Institute, Cost of Government Center, Council for Citizens Against Government Waste, ConservAmerica, Taxpayers Protection Alliance, Less Government, Center for Individual Freedom

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