Washington, D.C. – U.S. Sens. Jeff Flake (R-Ariz.) and Cory Booker (D-N.J.) today announced the introduction of S. 1442, the Exclusion for deficit Reduction in Agriculture Subsidies Elimination (ERASE) Act. The bill would eliminate an unprecedented restriction buried in the 2014 farm bill that prohibits the U.S. Department of Agriculture (USDA) from achieving any savings when it renegotiates its five-year subsidy deal, known as the Standard Reinsurance Agreement (SRA), with the private companies that administer federal crop insurance.

According to the Congressional Budget Office, the USDA secured a total of $6 billion in taxpayer savings – including $4 billion to be applied solely to deficit reduction – when the agency last renegotiated the SRA in 2010. Under the 2014 farm bill, those savings would be prohibited by law, and in the event that minimal savings are realized, those funds are statutorily required to be funneled back to private insurance companies in the form of crop insurance subsidies.

Flake offered an amendment to strike the deficit reduction prohibition during consideration of the 2014 farm bill, but it was not brought before the Senate for a vote.

“At a time of record national debt and trillion-dollar deficits, it’s unjustifiable to have a law on the books that prohibits the federal government from realizing savings on behalf of taxpayers,” said Flake.

“It defies logic that federal law is standing in the way of utilizing such a clear path to save taxpayers money,” said Booker. “The government has an obligation to be good stewards of taxpayer dollars, and this bill would free the USDA from this irrational mandate and allow the savings generated to be used either for deficit reduction or to fund other important programs.”

The text of the bill can be viewed here.

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