Senate needs to block USDA slush fund in its minibus bill

The House agriculture appropriations bill, which was favorably reported out of the Appropriations Committee, includes language to help put a stop to what has become a US Department of Agriculture (USDA) slush fund.

The Senate agriculture appropriations bill, which is expected to be considered on the floor next week as part of a “minibus” appropriations package, doesn’t have comparable language.

This needs to change, and senators should include an amendment to the legislation.

The Commodity Credit Corporation (CCC) is, in simple terms, a funding mechanism for most farm bill programs, with $30 billion annually. In general, most of this $30 billion exceeds the amount required for the programs.

The remainder, which can be around $15 billion annually, can be spent at the discretion of the agriculture secretary for a wide variety of broad purposes, effectively serving as a slush fund.

Historically, and surprisingly, agriculture secretaries have not used this discretionary spending power and potential slush fund.

This started to change some with the Obama administration, but it really changed when the Trump administration used the CCC to spend $16 billion for “trade aid” to farmers to offset the harm from retaliatory tariffs.

Some critics of this CCC spending, including this author, warned that this set a terrible precedent where future secretaries could try and use the discretionary spending power for almost any purpose and to get around Congress, such as to address climate change.

This proved to be correct. The Biden administration has used the CCC to spend $3.1 billion to pursue its climate agenda, creating a program never authorized by Congress called the “Partnership for Climate Smart Commodities.”

But this issue isn’t really about the purpose of the spending, be it trade aid, climate change, or something else. This issue is primarily about Congress abrogating its spending power and the USDA having a slush fund to spend money at its whim for almost any purpose imaginable.

Besides this being a separation of powers problem, this slush fund is ripe for abuse and corruption, and could serve as a means to funnel billions of dollars to favored special interests.

It is also a way for legislators (not just an administration) to get around Congress to achieve specific objectives that they can’t achieve through the lawmaking process, including the farm bill process.

In fact, Senate Agriculture Committee Chairperson Debbie Stabenow (D-MI) and ranking member Sen. John Boozman (R-AR) just sent a letter to Agriculture Secretary Tom Vilsack asking him to use the CCC to fund trade promotion and international food assistance, instead of just gaining support from fellow lawmakers for this funding.

Congress has long been aware of the potential for CCC abuse. From 2012-2017, appropriation bills included restrictions on the agriculture secretary’s discretionary spending power.

The House in its new agriculture appropriations bill has included a provision (Section 714) that would also restrict the discretionary spending power. The Senate needs to follow suit with identical language or at a minimum place reasonable limits on this discretionary spending, such as by ensuring that any money that is spent must only be for emergencies that are temporary in nature, as opposed to creating new programs out of whole cloth.

It isn’t just House members who realize that the USDA slush fund is a serious problem. Sen. Chuck Grassley (R-IA) with co-sponsors Sen. Roger Marshall (R-KS) and Sen. Mike Braun (R-IN) have introduced much-needed legislation, the USDA Spending Accountability Act of 2023. The bill would require Congress to specifically authorize the use of the CCC. To their credit, these senators are showing strong leadership and a commitment to separation of powers.

Their legislation is the ideal solution. 

But right now, as the Senate moves forward with its agriculture appropriations bill next week, senators need to amend this spending legislation so that it places restrictions on the discretionary use of the CCC.

Hopefully the Senate will follow the lead of House appropriators and the leadership shown by Sens. Grassley, Marshall, and Braun to help put an end to the USDA slush fund.