Who Pays When Government Doesn't?

Vilsack says budget cutters need to ask who pays if government doesn't.

Published on: Jul 5, 2011

U.S. Secretary of Agriculture Tom Vilsack says a fundamental question about what is considered essential and how it should be paid for needs to occur along with the ongoing debate over the federal budget.

"As we talk about eliminating programs, we need to be looking at them and asking if they are needed. If they are, and government stops paying for them, then who picks them up?" Vilsack asked in a speech to the North American Agricultural Journalists annual meeting in Washington, D.C. in early April.

Vilsack cited conservation as an example.

The recent cuts, he said, drastically reduce government funding for conservation programs. There are $800 million in the continuing resolution alone, he said, with more likely to come in the 2012 budget.

"I think we need to ask, does this mean that conservation or the activities that would have been funded by that money, are not important and don't need to be done?" he asked. "And if we say it is important and we need to be doing it, then who is going to pay for what government isn't paying for any more?"

If you look at cuts in programs such as food assistance, Women, Infants and Children programs, or school lunches through the same lens, he said, the same question applies. Is it necessary? And if it is, who pays for it if government doesn't?

"It isn't like the need for the work goes away if government isn't paying for it," he said. "It's more of a question of whose job is it?"

Vilsack cited an example of money for fire suppression that had been allocated by Congress to help the U.S. Forest Service, which is a USDA agency, fight forest fires.

He said a fortunate season of fewer than anticipated forest fires gave the department money at the end of the fiscal year.

He asked permission to use some of that money on a program to spray pine trees in residential areas to protect them against the pine bark beetle, an insect pest that is killing hundreds of pine trees.

"We had hundreds of homes that would be threatened and the spraying program was relatively cheap," he said. "And it had the side benefit that it would prevent the beetle from killing trees near homes which would keep them safer."

His request was denied and the surplus funds were applied to deficit reduction. On the same day the money was taken away, he said, he got a letter from Congress directing him to undertake the spraying program.

"Of course, we no longer have the money to do that," he said. "We don't even have a cushion of money to respond if there is a major disaster."

Vilsack responded almost angrily to a question about ethanol and food prices, saying biofuels are not responsible for increased food prices. Higher prices for commodities aren't the culprit in food price increases, either he said.

"We are seeing food prices increase for the same reason we saw the spike in 2008," he said. "It is because of the price of oil. When energy costs go up, everything costs more. The farmer gets such a small share of the food dollar that the price of raw materials is not a major contributor to increases."

He said research in 2008 proved that ethanol has only a modest impact on the price of corn and actually reduces the price at the pump, in some cases by as much as 50 cents a gallon.

"It is a myth that we have to choose between a secure food supply and biofuels," he said. "We don't need to be choosing one over the other. We need to be looking at how we redesign our production system so we can do both."

Vilsack said now is a bad time to be cutting off investment in research and rural infrastructure. Instead, he said, the focus should be on creating new jobs and encouraging population growth in rural communities.

"We need to recognize that rural America is the source of our food, water, fuel and energy," he said. "We need to be making decisions that strengthen it."

He questioned the wisdom of making cuts a top priority.

"Cutting your way out of a deficit is one strategy," he said. "Another is to grow your way out. Wealth creation occurs when you bring the world's money into the country. Agriculture does that. We are the only sector of the economy with a positive balance of trade."