Legal experts say Trump's farm bailout is nothing more than a 'political slush fund'

Legal experts and members of Trump’s own administration have serious questions about the Department of Agriculture (USDA) doling out $30 billion to farmers harmed by Trump’s ongoing trade war with China, the Washington Post reported Monday.

Two USDA officials told the Post that they worried the massive bailout program, administered through the Commodity Credit Corporation, goes far beyond the legal limits intended by the New Deal law.

“It was obvious they were stretching their legal authority,” one USDA official told the Post. A former USDA official who worked there during the Trump administration added that, “They’re doing it really fast and shorthanded.”

Outside legal experts were more pointed in their analysis.

“They’re essentially using it as a political slush fund to backfill for the cost they’re imposing on agriculture through the trade war,” Neil Hamilton, former director of the Drake Agricultural Law Center, told the Post. “Congress never said, ‘Go spend $28 billion trying to make people whole because of this trade war you created.’ That’s just something they have cooked up.”

The nearly $30 billion price tag also has many experts questioning the program. During President Obama’s tenure, the largest bailout for farmers was a 2018 program to help cotton farmers, which cost $216 million. Trump’s taxpayer-funded farmer bailout program costs more than 100 times that amount.

“This is an incredible amount of money and sets a terrible precedent,” Joe Glauber, senior research fellow at the International Food Policy Research Institute, told the Post. “What’s unusual is the magnitude: It’s just enormous.”

Glauber, though not an attorney, told the Post he did not think the program was “being administered illegally,” however.

The Trump administration announced the massive bailout program as Trump’s trade war with China escalated. In retaliation for tariffs Trump put on Chinese good, China first slowed and then completely stopped purchasing American agriculture products. As a result, U.S. farmers are struggling, with bankruptcy rates skyrocketing.

The bailout funds, which overwhelmingly go to white farmers, are often not enough to make up for the losses from Trump’s trade war.

“Trump is ruining our markets,” Bob Kuylen, a North Dakota farmer, told CNBC in August. “No one is buying our product no more, and we have no markets no more.” Because of Trump, Kuylen lost $70 per acre this year, but Trump’s bailout only gives him $15 per acre.

To add insult to injury, Agriculture Secretary Sonny Perdue was caught recently mocking farmers who were struggling as a result of the tariffs.

“What do you call two farmers in a basement?” Perdue joked with a group of Minnesota farmers in mid-August.

“A whine cellar,” Perdue said, generating boos from the crowd.

The USDA told the Post that bailouts to farmers pass legal muster, saying the programs were approved by agency lawyers “for legal sufficiency.”

While farmers are being bailed out, American households will still be hurt from the higher costs foisted upon them by Trump’s trade war. Experts estimate the average family will be forced to pay $1,000 more next year because of the trade war, a higher amount than most Americans will receive as a result of the 2017 GOP tax law, which promised tax relief for the middle class.

Published with permission of The American Independent Foundation.