Hello, I'm Mark Pearson. President-elect Obama said this week the deepening American recession could stretch years into the future if Congress fails to act on his call to pump hundreds of billions of dollars into the nation's economy.
Speaking at George Mason University in Virginia, Obama touted his $775 billion economic stimulus package which is expected to include more than $300 billion in tax cuts for businesses and middle-class workers -- as well as money to help cash-starved states and massive infrastructure projects.
While the speech offered relatively few details on the specifics of the plan, a sobering employment report released Friday presented further evidence that the worst recession in decades is far from over.
According to the Labor Department, U.S. employers trimmed 524,000 jobs from their payrolls in December, pushing the total annual job loss figure to 2.6 million. That's the most jobs lost in one year since 1945.
The layoffs and cutbacks pushed America's unemployment rate to 7.2 percent - its highest level in 16 years.
And earlier in the week, the Congressional Budget Office estimated the federal budget deficit will nearly triple to an unprecedented $1.2 trillion for the 2009 budget year.
While the proposed stimulus plan will add to the sea of red ink, Obama has in the past singled out inappropriate farm subsidy payments as the kind of waste he intends to end.
This week though, it wasn't Obama, but a coalition of rural advocacy groups scrutinizing environmental incentive payments to farmers.
According to the Campaign for Family Farms and the Environment, or C-F-F-E, large corporate farming operations are receiving more than their fair share of federal environmental stewardship payments. The C-F-F-E, a coalition of grassroots rural advocacy groups, is reporting that large corporate operations are receiving a higher percentage of payments from the Environmental Quality Incentives Program, or EQIP.
Data for the report was limited by privacy provisions in the 2002 Farm Bill, but the Campaign for Family Farms still was able to draw some conclusions. The C-F-F-E found that almost 40 percent of the money allocated to hog farms went to large-scale operations that make up only 10 percent of the industry. And further examination showed large-scale dairies, which comprise only 4 percent of the industry, received an estimated 54 percent of all EQIP money for dairy operations.
When USDA created EQIP in 1996, low-cost projects for pest, nutrient and grazing management were given high priority and waste storage facilities were excluded. The highest amount paid to an individual was capped at $10,000 per year or $50,000 over 5 years.
In 2002, all that changed. Funding went from $1.3 billion to $6.1 billion, the annual cap was eliminated, and the total amount that a farmer received over 6 years jumped to $450,000. New rules required 60 percent of the funds to be used for livestock-related practices including construction of manure storage facilities.
The Campaign for Family Farms data revealed by 2005 more than 80 percent of EQIP funds were approved for construction of manure digestors and lagoons. An extreme example was found showing a single payment of $285,000 was made to one Minnesota producer for construction of a manure lagoon.
A spokesman for the Missouri Pork Association answered the accusations by saying EQIP is working as Congress intended. He went on to say even with the Campaign for Family Farms estimate of $35 million being paid to large operations a sizable portion of the $6.1 billion was still available.
The 2008 Farm Bill does reduce the total amount a farmer can receive over 6 years to $300,000 but the cap can be waived if USDA determines a project is of "special environmental significance."
As a remedy, the Campaign for Family Farms is asking for some changes including a return to giving low-cost solutions a priority, capping payments at $150,000 per operation, and a prohibition on the funding of manure waste facilities.
Though the final rule has yet to be written it is likely USDA will wrestle with the fine print in the days ahead.