Senate bill targets ban on deficit reduction in farm-subsidy deals

U.S. Sens. Jeff Flake (R-AZ) and Cory Booker (D-NJ) introduced a Senate bill on Friday that would amend the Federal Crop Insurance Act to eliminate a limit placed on the U.S. Department of Agriculture (USDA). 

The measure, known as the Exclusion for Deficit Reduction in Agriculture Subsidies Elimination (ERASE) Act, would eliminate a restriction in the 2014 farm bill. The restriction prohibits the USDA from realizing any savings when renegotiating its five-year subsidy deal, also known as the Standard Reinsurance Agreement, or SRA, with private companies that distribute federal crop insurance.

“At a time of record national debt and trillion-dollar deficits, it’s unjustifiable to have a law on the books that prohibits the federal government from realizing savings on behalf of taxpayers,” Flake said.

When the SRA was last renegotiated in 2010, the USDA secured $6 billion in taxpayer savings. Flake proposed an amendment to eliminate the deficit-reduction prohibition during consideration of the 2014 farm bill, but it did not make it to the full Senate for a vote.

“It defies logic that federal law is standing in the way of utilizing such a clear path to save taxpayers money,” Booker said. “The government has an obligation to be good stewards of taxpayer dollars, and this bill would free the USDA from this irrational mandate and allow the savings generated to be used either for deficit reduction or to fund other important programs.”