Bloomberg News

Wine Vies With Infant Food for Funds Under Budget Cuts

March 15, 2013

Wine Competes With Infant Food for U.S. Funds Under Budget Cuts

A wine steward straightens up a shelf at a grocery store in Alamo, California. Photographer: David Paul Morris/Bloomberg

Ashlee Fields, a single mother in Washington, D.C., knows she could be among 600,000 people culled from a food-aid program after U.S. budget cuts take hold.

For Fields and her two-year-old son Kaiden, the consequences include a degraded diet as healthy subsidized products disappear from her shopping basket -- even as millions in taxpayer dollars still flow to boost overseas advertising and sales of potatoes, prunes, and California wine.

“I’m not even going to try to sugarcoat it -- I wouldn’t be in the store buying whole grains and vegetables, even though I know it’s the right thing to do,” Fields, 22, a part-time administrative assistant, said in an interview. “It’s so expensive, and my budget just couldn’t handle it.”

Nutrition assistance that help Fields and export-promotion programs that offer taxpayer money to California vineyards for wine tastings in Europe both fall under the U.S. Department of Agriculture, which must trim $2 billion from its $155 billion annual spending plan.

The cuts apply throughout departmental budgets, with little flexibility, in a process designed to be so painful Democrats and Republicans would find an alternative. They didn’t, and now the federal government needs to save $85 billion this year in a process known as sequestration.

‘Dumb’ Cuts

President Barack Obama on March 1 called the automatic cuts that took effect that day “dumb” and “arbitrary,” and House Speaker John Boehner, an Ohio Republican, said the procedure was a “silly” way of doing business.

“There’s broad consensus that sequestration is not a sound way to cut the budget,” said Robert Greenstein, president of the Washington-based Center on Budget and Policy Priorities, a group that advocates for policies to help poor and middle-class families. “It cuts everything by the same percentage, even though some things should not be cut at all, and some things should be cut more. It’s a real meat-ax approach.”

Consequences may include longer lines at borders and airports as customs agents lose overtime pay to vet airline travelers and ship containers as they enter the country, and prospective delays in courts as Justice Department employees take furloughs. The USDA has also warned it would have less money for meat and poultry plant inspections, which could force production losses when slaughterhouses close because officials aren’t present.

Lawmakers are seeking agreement to keep the government funded past a separate March 27 deadline, and the deal could include spending flexibility to blunt the sequestration’s impact on agencies including the Agriculture Department.

WIC Program

The USDA cuts put in place mean as many as 600,000 recipients would be denied access to the Special Supplemental Nutrition Program for Women, Infants and Children, Secretary Tom Vilsack said in a Feb. 5 letter to the Senate Appropriations Committee. The WIC program helps some 9 million poor people buy milk, baby formula, fruits, vegetables and other healthy foods and is the program relied upon by Fields, the Washington single mother.

Decisions on who loses nutrition will be made by regional officials who administer the program. In New York, as many as 130,000 of 515,000 participants in the program could be dropped from rolls, Cindy Walton, chairwoman of the WIC Association of New York State, said in an interview. The toll is high because the 5 percent cut must be concentrated in the remainder of the fiscal year that ends Sept. 30, she said.

Painful Conversations

New mothers who aren’t breast-feeding are candidates for removal, Walton said. Case workers aren’t looking forward to delivering news on funding decisions to young families.

“It’s going to be tough,” Walton said. “We’re going to have all kinds of reactions, from crying, to ‘How can I feed my kids?’ That’s hard.”

At the same time, the Market Access Program that subsidizes fruit and wine exports -- as well as sales of pistachios, walnuts, papaya, ginseng, mohair and catfish -- is taking the same 5 percent reduction, or $10 million from its $200 million annual budget.

The export spending perplexes Senator Tom Coburn, an Oklahoma Republican.

U.S. companies have received $3.4 billion since MAP’s inception in 1978, becoming “a permanent subsidy to some of the nation’s most prominent agricultural companies and trade associations,” Coburn said in a report last year.

Wine Tastings

The Republican took to the Senate floor on March 5 to tell colleagues that continuing to spend money boosting exports while slowing food inspections didn’t make sense.

“We have plenty of ways to save money,” Coburn said. “What we have is intransigence in Congress and also an intransigence by the administration.”

The Market Access Program last year dedicated $2.2 million in taxpayer money to California prunes, $4.8 million for potatoes, and $6.9 million to the Wine Institute to sell California merlot, zinfandel and Chablis abroad.

The export-boosting subsidies mix private and federal funds to promote U.S. agriculture overseas. The Wine Institute, the largest single recipient, has spent program money on wine tasting events, trade shows, advertisements and trips to London and Dublin, according to Coburn’s report.

Nancy Light, a spokeswoman for the San Francisco-based Wine Institute, which calls itself “the voice for California wine,” declined to comment. Brittany Gillmor, a spokeswoman for the Sacramento-based California Dried Plum Board, which represents prune interests and takes part in the marketing program, declined to comment.

Potato Bill

In 2011, recipients of export assistance contributed over $1.80 for each dollar of program funding, Brian Mabry, a spokesman for the Agriculture Department, said in an e-mail. Recipients are non-profit agricultural trade associations, non- profit cooperatives, and small businesses, Mabry said.

The program is “not a boondoggle,” Tim O’Connor, president of the Denver-based U.S. Potato Board, which handled $4.8 million in federal subsidies last year to help sell spuds in 27 countries, said in an interview. “Agriculture is one of the U.S.’s bright spots when it comes to trade.”

Growers contribute 3 cents per 100 pounds of potatoes, or about $3.8 million last year that was combined with $4.8 million in federal funds.

The spending has helped build market share, O’Connor said. “We’re not just throwing money around,” he said.

Coburn hasn’t limited his sequester criticisms to export promotions. The government shouldn’t be advertising, as it was on March 4, for more than 600 jobs to be filled including painters for the Air Force and public-affairs specialists earning as much as $116,000 a year, Coburn said. The salary devoted to one librarian could offset a week of furloughs for as many as 156 food inspectors, he wrote.

Agencies have been told they should bring “heightened scrutiny,” to hiring, according to guidance issued by the White House Office of Management and Budget.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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