Kansas State
economist believes Congress needs to lead
with statesmanship
Barry Flinchbaugh thinks often about the old Chinese proverb - "may you live in interesting times."
"The year 2012 is a very interesting time to be an economist. It's also very frustrating."
Flinchbaugh, who has been an agricultural economist at Kansas State University for 41 years, is a popular speaker at the annual Corn/Soy Expo in Wisconsin Dells, which this year drew 1,800 people.
The event is also the annual convention for the Wisconsin Agri-Service Association and the Wisconsin Pork Association as well as the Wisconsin Corn Growers Association and Wisconsin Soybean Growers. All four groups sponsored the event.
Flinchbaugh, who spoke on Friday (Feb. 3), said he grew up 75 miles north of Washington and experienced his first visit to the nation's capital as a school kid in 1948.
Twenty years later he was working with lawmakers on his first Farm Bill and has done so ever since.
The farm policy package that Congress will be working on this year is "the most difficult Farm Bill in my lifetime," he said.
As he sees it, lawmakers are going to "debate this Farm Bill in a perfect storm. I do not recall these kinds of circumstances in my lifetime," he said.
That perfect storm includes rampant federal budget deficits, record high commodity prices and farm income levels along with a gridlocked Congress.
In all the years he's been involved with public policy, Flinchbaugh said he's never seen Congress more "dysfunctional" or more "mean spirited."
"Congress is giving two-year-olds a bad name," he added. "I would be embarrassed if I was a member of Congress." He likened this period to the 20 years just before the Civil War.
"We moderate needs to take back the government from the wing nuts on either end of the spectrum," the registered Independent voter told his rapt audience.
As an example of doing good things for the country in the midst of hardship he used President Abraham Lincoln who was despondent in 1862 over the death of his son Willy.
"That summer he put through Congress the Land Grant University Act, created the U.S. Department of Agriculture, signed the Homestead Act and put through Congress the Transcontinental Railway.
"That took seven weeks and only 17 pages of legislation," he added.
economic picture
affects agriculture
"The number-one public issue for agriculture is the state of the overall economy," and while the government is "telling you to invest and hire more people" businesses have no idea what their taxes or their health care costs are going to be.
"We now make tax policy month by month," he said.
Congress and the American public must set about solving the problem of the annual federal budget deficit, he said, which has only shown surpluses during four years of the Clinton Administration.
He criticized the current Congress for "only working on one side of the budget ledger" - spending.
House Speaker Boehner, said Flinchbaugh, believes he can solve the budget deficit with only spending cuts, while President Obama believes about half the solution will have to come from tax increases.
Flinchbaugh believes that the right approach is contained in the recommendations from the bi-partisan National Commission on Fiscal Responsibility and Reform headed by Alan Simpson and Erskine Bowles.
They recommended a package of policies that included 70 percent spending cuts and 30 percent from tax changes, he said.
For more information on their recommendations see
www.debtcommision.gov.
"There clearly needs to be a compromise between Obama and Boehner and in the old days we would have a compromise," said Flinchbaugh, who has known Simpson for years and considers him a wise "elder statesman."
The Simpson-Bowles commission met throughout 2010 and turned their report over to Congress in December 2010. But political wrangling and gridlock have prevented Congress from acting on the proposals it contained.
Flinchbaugh recalled eras when members of opposing parties were civil to each other and found ways to work together for the good of the country.
He mentioned conservative Republican President Ronald Reagan and Democrat Speaker of the House Tip O'Neil.
"We can't solve this problem by piddling around with small programs. We have two, three, four years to get this house in order. This is serious business," he said.
Flinchbaugh believes the nation's number-one problem is the budget and the Farm Bill deliberations will be played out with that as a backdrop.
When he saw the Super Committee process begin, and the people who were named to that group, Flinchbaugh felt it was "designed to fail."
The so-called "gang of four" lawmakers from the agriculture committees hammered out a Farm Bill for the Super Committee that agreed to cut agricultural spending by $23 billion over the next 10 years.
But since the committee overall failed to reach agreement, the agricultural portion ended too.
Commodity prices not 'new normal'
Flinchbaugh said he doesn't believe the high corn and soybean prices seen in the last year or two represent a "new normal" adding that a "return to the cost/price squeeze is beginning."
That's one of the reasons he believes the country needs a sensible Farm Bill. "We in agriculture can't unilaterally disarm. It's just that straightforward," he added.
The trend globally is for farmers to get less of their income from government programs. In Australia in 1986, farmers got 10 percent of their income from government support and in 2010 that was down to 2 percent, he said.
During that same time frame Canada went from 36 percent to 18 percent, European Union farmers went from 39 to 20 percent and Mexican farmers went from 28 to 12 percent. Farmers here went from 22 percent to 7 percent,
"We will get a Farm Bill and we need a Farm Bill," he said.
Without new policy, the federal government will revert to the 1938 Agricultural Adjustment Act, which was "clearly designed for a different set of circumstances."
One of the fundamental questions of the debate will be how much risk the government should protect. "Crop insurance is likely to be improved in this debate."
There has been debate about "shallow" loss protection and debate on the other side about allowing farmers to stand the shallow loss risks and let the government protect against catastrophic losses.
"I don't think we'll get done before the election. There may be a chance during the lame duck session (after the November election.) Sometimes lame ducks behave more like statesmen."
But Flinchbaugh predicts that the Farm Bill won't be passed until April 2013.
