June 26, 2012

How The Crop Insurance Industry Helped Buy A Multi-Billion Dollar Cut To Food Stamps

How The Crop Insurance Industry Helped Buy A Multi-Billion Dollar Cut To Food Stamps
Crop insurer cash played a part in sustaining cuts to food stamps.

Late last week we reported how the U.S. Senate voted to sustain cuts worth billions of dollars from the food stamp program in the name of fiscal austerity while maintaining billions of dollars of subsidies and other price supports for the Sugar Lobby.

Let’s look even deeper into the original 33-66 failed vote to restore $4.5 billion in food stamp funding. The amendment offered by Senator Kristen Gillibrand (D-NY) to the farm bill that was offered to do this funded the food stamps by cutting “guaranteed profit for crop insurance companies from 14 to 12 percent and by lowering payments for crop insurers from $1.3 billion to $825 million.”

Not only was Gillibrand asking the Senate to help a group  of individuals without well-connected lobbyists — the poor who rely on food stamps — but she was also taking on a powerful interest group: crop insurance companies.

We conducted a review of campaign spending by the crop insurance industry’s top political action committee —  the American Association of Crop Insurers PAC (AACIPAC) — and its lobbyists it has contracted through a Virginia law firm, and found, unfortunately, unsurprising results.

Of the 11 sitting Senators — four Democrats and seven Republicans — who received campaign funding from AACIPAC in the 2010 election cycle or the current one, not a single one supported Gillibrand’s amendment to restore food stamp funding by cutting guarantees to crop insurers.

Additionally, I searched through Federal Election Committee (FEC) data and found that one of AACI’s lobbyists it hired, Michael McLeod, donated $1260 in 2011 to Senator Ben Nelson (D-NE), one of the Democrats who voted against food stamps and for crop insurers. Nelson is retiring, so it would seem that he does not need campaign funding, but earlier this year he refused to disclose any job negotiations he will be having with lobbying firms — so perhaps he is building goodwill toward a new career.

Another lobbyist hired by AACI, Laura Phelps, was a minor donor to Senator Mark Warner (D-VA) in 2008, giving $250 according to FEC records. Warner also sided with crop insurers and against food stamp recipients.

In Washington, D.C. money buys access and, sometimes, votes. This can have devastating consequences for America. One columnist in Washington state estimates that the state’s 234,000 households receiving food assistance may face cuts of up to $90 each in food stamps — perhaps owing to the legalized corruption in the U.S. Senate.