Time to Do the Right Thing: End Sugar Quotas
The tragedy is that while cronyism benefits the haves, all other Americans — especially those with lower incomes — suffer from the resulting distortions.
In recent years we have seen Republicans, with the usual exceptions, vote along party lines against big signature Democratic laws such as the president’s health-care or the stimulus bills. But it’s not enough. There are many other votes that escape public scrutiny but are just as important. For instance, in the last few weeks we have seen Republicans in the Senate and the House vote to support a series of corporate-welfare programs in spite of the consequences that cronyism has for our country. Here are a few examples:
- The Ex-Im Bank (147 Republicans in the House voted to support its re-authorization.)
- The $200 million Essential Air Service program subsidizes airlines to provide service to rural communities (77 House Republicans voted to keep the program alive.)
- The Economic Development Administration (104 Republicans voted to keep the program alive.)
- HUD’s Community Development block grants (156 House Republicans voted against an amendment to get rid of it, including Representative Paul Ryan.)
- HUD’s loan-guarantee program (114 Republicans voted against getting rid of it.)
- DOE’s 1705 loan-guarantee programs (127 House Republicans voted to defeat an amendment to shut down the program.)
I could go on and on. Unfortunately, I can promise that the list will grow in the next few weeks. For instance, the Farm Bill is now in the House. As you know, the nearly $1 trillion bill with its Depression-era and new subsidies cleared the Senate floor recently (with 16 Senate Republicans voting for it). One of the worst cronyism features in the Senate bill is the protection granted to the sugar industry. As I explained:
The tragedy is that while cronyism benefits the haves, all other Americans — especially those with lower incomes — suffer from the resulting distortions. Take the domestic sugar industry as an example. The government protects its producers against foreign competitors by imposing U.S. import quotas, and against low prices generally with a no-recourse loan program that serves as an effective price-floor. As a result of these government actions, U.S. consumers and businesses have had to pay twice the world price of sugar on average since 1982, according to economist Mark Perry.
The irony is that the USDA also spends $80 billion a year trying to alleviate the high costs of food of poorer Americans through programs such as food stamps for 46 million Americans. The one hand takes, and the other gives.
Yet, many of us sat and watched as the Senate voted to protect the sugar industry with the help of 16 GOP senators (including tea-party darling Marco Rubio). But is it the role of the federal government to help protect the artificially high profits of the sugar industry — including the Fanjul family, which controls Florida Crystals Inc. and Domino Sugar, which owns more than 400,000 acres of sugar-cane farms and produces one-third of Florida’s sugar at the expense of consumers? Absolutely not. Yet lawmakers, on a bipartisan basis, continue to support the cronies.
Of course, the fact that the sugar industry spends millions in lobbying might be one reason. The U.S. sugar lobby contributes millions of dollars to political campaigns to maintain federal support for the subsidies, according to the Center for Responsive Politics. The Fanjul family alone spent $715,000 on lobbying in 2008 and has spent an estimated $2.6 million on political campaigns from 1979 to 2006.
So now we need to pay attention to what representatives will do when amendments are introduced to end this recurring special treatment of a handful of large sugar producers. I hope that compromises and special-interest politics won’t be on the menu this time.