March 12, 2013 / 4:48 PM / 7 years ago

Republicans seek farm subsidy cuts, mull food stamps to cash

WASHINGTON (Reuters) - Republicans in the House of Representatives on Tuesday proposed $31 billion in farm subsidy cuts and the conversion of food stamps into a cash benefit program, as a way to help balance the federal budget in 10 years.

House Budget Committee Chairman Rep. Paul Ryan (R-WI) holds a news conference to unveil the House Republicans' FY2014 budget resolution in Washington March 12, 2013. REUTERS/Gary Cameron

The proposal, signed by House Budget Committee Chairman Paul Ryan, left it to the Agriculture Committee to pick the specific cuts, but cited the $5 billion-a-year “direct payment” subsidy, paid regardless of need, and the heavily subsidized federal crop insurance program as areas worthy of review.

It also called for turning food stamps, used by millions of poor and elderly Americans to buy food, into a cash payment and to allow states to “tailor their programs to their recipients’ needs.” Under the plan, food stamps would become a block grant.

Ryan proposed similar steps a year ago. At that point he asked for $30 billion in savings from farm supports. Farm groups and their allies in Congress would prefer to create new types of crop insurance coverage as part of a new farm bill and have opposed any cuts.

“With farm profitability - and (federal) deficits - continuing at high levels, it is time to adjust support to this industry to reflect economic realities,” the Ryan budget document said.

The review should include “fixed payments that go to farmers irrespective of price levels and the current structure of the crop insurance program,” it said.

Reformers have targeted the direct payment for elimination in the farm bill. They say it squanders money with no benefit to taxpayers. Lawmakers failed to pass a new farm bill by the end of 2012, at which point a temporary extension was put in place, including another year of direct payments.

House Agriculture Committee Chairman Frank Lucas has a target of at least $35 billion in farm bill savings, with cuts split between agricultural programs and food stamps. Lucas’ committee proposed $16 billion in food stamp cuts, the largest in a generation, in the bill that died at the end of 2012.

“We will consider the suggestions contained in Chairman Ryan’s budget as is customary for the Agriculture Committee to consider a variety of viewpoints when crafting comprehensive legislation,” Lucas said in a statement.

Food stamps are the major U.S. anti-hunger program with enrollment that swelled to a record 47.8 million people, including those receiving disaster aid, at the end of 2012.

The budget document said that cash benefits work well in welfare programs, so “now it is time to implement similar reforms across other areas of the safety net.”

By allowing customized food stamp programs through block grants, “it encourages states to help recipients find work,” Ryan’s budget said, adding there should be time limits and work requirements for food stamp recipients.

Two-thirds of food stamp recipients are children, the elderly and disabled people, according to the think tank Center for Budget and Policy Priorities.

Food stamp advocates said the block grant proposal amounted to a $150 billion cut when Ryan proposed it in 2012 because of its limits on funds. This time, Ryan said the grants would be “indexed for inflation and eligibility.” Some Republicans want to tighten eligibility requirements for the program.

Food stamp benefits are scheduled to fall in November with the expiration of an increase approved as part of the 2009 economic stimulus package.

Reporting By Charles Abbott; Editing by Ros Krasny, Gerald E. McCormick and Andre Grenon

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