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Special Report

Addictive Allotments

Washington prepares to resubsidize tobacco growers and friends — before reregulating them.

Once upon a time, the Republican Party stood for fiscal responsibility and limited government. That fantasy world disappeared long ago.

A House-Senate conference committee in the Republican-ruled Congress is considering legislation to hand billions to tobacco producers and extend Food and Drug Administration rules to cigarettes. Republican President George W. Bush seems prepared to accept anything that passes.

More spending and regulation together: The GOP, no less than the Democrats, is the party of big government, in case you haven’t noticed.

Tobacco allotments began in the 1930s. Like most of the farm programs, tobacco subsidies make no sense, other than as yet another creative mechanism to loot taxpayers.

When the Great Depression hit, everyone looked for a “free lunch,” a deep pocket to pick. That meant using government to transfer wealth from one’s neighbors. Farmers came up with a complex system of loans, support payments, marketing orders, conservation controls, and even cash not to produce.

To prop up tobacco prices, farmers were issued allotments to limit supply. Allotments were then sold and bequeathed to non-farmers. Today many tobacco growers pay city-folk for the privilege of farming.

A mixture of foreign imports and government attacks on smoking have reduced demand for domestic tobacco. Which has driven down the value of allotments. Tobacco growers and friends want a bail-out.

Under today’s GOP, no special interest goes without generous aid. So the House approved a five-year, $10 billion boondoggle deal to buy out allotment holders.

After being criticized for its untoward generosity toward tobacco growers, the House passed a separate measure barring use of government funds for the pay-off. “Some call it a buyout; I call it a sellout of the American taxpayers,” observed Rep. Chris Van Hollen (D-Md.).

But congressmen haven’t given up passing out financial goodies for political gain. Now they just hope to stick cigarette companies and smokers with the bill. If there’s anything at which legislators excel, it is giving away other people’s money.

THE SENATE-APPROVED PACKAGE is even sweeter: as much as $13 billion over the coming decade. Along with the cash payment are provisions turning the tobacco industry over to the FDA’s tender regulatory mercies. There would be more controls over cigarette advertising and ingredients; the agency could ban flavored smokes and vending machines.

Both the House and Senate measures were attached to a corporate tax bill and now are being negotiated in conference committee.

The legislation represents congressional log-rolling at its worst. Liberal members say: who cares about wasting more money on those who grow a deadly crop since we can extend Uncle Sam’s regulatory reach? “The bill will save lives,” opines Sen. Edward Kennedy (D-Mass.).

Self-professed conservatives say: who cares about expanding paternalistic government since we can put billions of dollars into the hands of grateful constituents? About 90 percent of payments would go the Southeast, increasingly a Republican stronghold.

Admits Senate Majority Whip Mitch McConnell (R-Ky.): “I think FDA regulation is a very steep price to pay for a buyout. But if that’s the only way to get my growers relief, this senator will vote to pay it.”

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topics:
Law, NATO

About the Author

Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).

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