FOR IMMEDIATE RELEASE: September 15, 1995
Contact: Amy Moritz (202) 543-4110
If the Congress Can't
Even Kill A Federal Program That Raises Consumer Prices And Kills
Jobs, How Will the U.S. Ever Balance the Budget?
The fate of what may be the nation's most destructive and counter-productive
agricultural program may be decided Wednesday, September 20 when
the full House Agriculture Committee decides the future of the
federal sugar program.
"The federal sugar program is corporate welfare, but it
is worse than most corporate welfare programs because it does
more than waste taxpayers' money -- it kills jobs and raises consumer
prices," said Amy Moritz, President of The National Center
for Public Policy Research. Moritz notes several serious problems:
- The sugar program costs U.S. consumers $1.4 billion each
year (according to the federal General Accounting Office) by
doubling domestic sugar prices. As U.S. News and World Report
said in its July 17, 1995 issue: "What the federal government
does is fix the domestic [sugar] price at around 22 cents a pound
through a combination of loans, market divisions and, most important,
strict import quotas: the current world price is less than 10
cents a pound."
- The federal sugar program has killed thousands of American
sugar industry jobs because U.S. producers have to compete with
foreign producers who can price their sugar at half the American
price. Since 1982, almost half of America's cane sugar refiners
have shut down as a result.
- The federal sugar program raises the cost to taxpayers of
the food stamp program by $90 million per year.
- The federal sugar program benefits a small number of wealthy
sugar producers at the expense of taxpayers and consumers. The
top 1% of sugar growers receive 42% of all benefits, and the
top 20% of all growers receive 75% of all benefits. One Florida
family alone receives over $65 million a year from the sugar
- The federal sugar program provides a $200 million annual
subsidy to foreign sugar producers.
- The federal sugar program is wasteful corporate welfare.
Though the St. Petersburg Times is based in a top sugar-producing
state, it nonetheless concluded in an April 16, 1995 editorial:
"The sugar industry has yet to present a convincing case
that it can't survive without price supports. The time has come
for this wealthy industry to wean itself from price supports."
USA Today opined on June 5, 1995: "The sugar scheme, now
up for renewal in Congress, leaves nothing to chance -- or the
threat of competition. The federal government controls the price.
The government limits imports to keep the price high. When that
doesn't work, Washington dictates how much domestically produced
sugar can be sold. In short, it's a government-run cartel."
- The federal sugar program has been kept alive not by merit
but by campaign donations. According to the Center for Responsive
Politics, sugar lobbyists have donated over $11.9 million to
candidates and PACs since 1979 to keep the program going. USA
Today says: "[Sugar producers] reward Congress members who
vote the right way with campaign contributions. The 178 current
members who voted Big Sugar's way in 1990 have received an average
$9,538 from sugar political action committees. The 47 who voted
the wrong way got $653 each."
The legislation that comes closest to ending the problems caused
by the sugar program is H.R. 1687, sponsored by Representatives
Dan Miller (R-FL) and Charles Schumer (D-NY). The bill is a step
in the right direction but does an incomplete job: it would kill
the domestic sugar program but leave foreign import quotas (which
contribute to higher sugar prices for American consumers) in place.
The desire to kill the sugar program is bi-partisan: H.R. 1687
has 102 co-sponsors from both parties, including key conservative
Republicans (including Majority Leader Dick Armey [TX] and Budget
Committee Chairman John Kasich [OH]) and leading liberal Democrats
(including Henry Waxman [CA] and Barney Frank [MA]). But their
efforts may not be enough: House Agriculture Committee Chairman
Pat Roberts (R-KS) has the most influence over the fate of the
sugar program, and he has not pledged to kill it.
"If the House can't take the relatively easy step to reform
a federal program that raises prices and kills jobs, how will
it ever take the tough steps needed to balance the federal budget?"
asked Moritz. "The federal sugar program -- all of it --
should be killed. Immediately."
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