Another round of the budget cuts known as the sequester are beginning to take effect, and once again there’s no agreement between Republican and Democratic lawmakers to head it off. But, a bipartisan group of North Carolina congressional lawmakers are pushing to exempt one program—payments to tobacco farmers—from the sequester’s effect.
For 70 years, a New Deal quota program supported tobacco prices, but it was falling apart in the 1990s, as tobacco manufacturers began to import.
“These companies could go down to South America and over in now it’s Zimbabwe and purchase pretty good tobacco for less money,” says Scott Whitford, a Pamlico County farmer in Eastern North Carolina. “Plus, the domestic market was becoming smaller and smaller.”
Lawmakers ended the program in 2005, and 400,000 tobacco farmers no longer had an essentially guaranteed income from their crop. To ease the blow, Congress created the “tobacco buyout:” Ten payments over ten years totaling $10 billion to those farmers, paid for by a tax to manufacturers and importers.
This upcoming year is the last. It is not clear how much money will go out, since sign-ups just ended, but it will likely be smaller than last year’s over $600 million, because the sequester is cutting the Department of Agriculture’s budget by more than 7 percent, including the buyout. Whitford thinks that is unfair.
“That’s like if you were buying a piece of land from somebody and you had 10 payments and you decided for no apparent reason you were going to renege on 7 ½ percent of your last payment,” Whitford says.
North Carolina’s congressional delegation agrees. In a rare display of budgetary bipartisanship, 36 Members of Congress, including all but three from North Carolina, signed a letter to Agriculture Secretary Tom Vilsack asking him to exempt the buyout from the sequester.
“This is being paid out from fees; it’s not related to tax dollars,” says Rep. Robert Pittenger, a Republican who’s district includes Matthews.
“It should never have been part of the sequester in the first place,” agrees Rep. David Price of Raleigh, a Democrat. “This is the buyout money—funds paid by the companies—so, the government role is simply to pass the money through. It should not have been sequestered in the first place. That’s really what we’re expressing in that letter.
There is some partisan conflict. Price says the program shouldn’t count as part of the sequester, so the Department of Agriculture shouldn’t have to cut into other areas of the budget to exempt it. And, he’s generally opposed to the sequester’s across-the-board cuts.
“This is a very poor excuse for budgeting,” Price says. “It’s mindless. It’s a sign of failure in other areas to get our fiscal house in order.”
Rep. Richard Hudson, a Concord Republican, supports the budget cuts and thinks the department should cut other areas to exempt the tobacco farmers.
“The administration’s got to decide where the cuts are going to come from, but we need to cut actual spending, using taxpayer dollars, not confiscate money out of a private trust fund in order to avoid spending cuts,” says Hudson.
Hudson, only North Carolina member of the House Agriculture Committee, says he is asking agriculture officials to appear before the committee on this issue, when Congress returns in December.