U.S. Rep. Ron Kind (D-WI) introduced legislation to compel USDA to verify farmer income eligibility with the Internal Revenue Service (IRS) and to strengthen penalties for bad actors who intentionally attempt to break the rules. This bill comes in response to a report issued by the Government Accountability Office (GAO) documenting that thousands of farmers in recent years have received taxpayer subsidies, even though they did not legally qualify for them based on their high incomes.
USDA Secretary Vilsack announced the agency’s own plans to implement GAO’s recommendations.
“I have long contended that the limits on farm subsidies are far too generous, but it is truly outrageous that the federal government has been unable to enforce the rules we already have on the books,” said Rep. Kind. “I am pleased the new Administration is interested in cracking down on waste, fraud, and abuse, and I look forward to working with them to find the best way to ensure our laws are obeyed and taxpayer dollars are being protected.”
The report from October of last year documented 2,702 individuals above the previous income cap of more than $2.5 million in annual income who received $49 million in farm subsidy payments from the U.S. government from 2003 to 2006. With new income caps as low as $500,000 established in the 2008 farm bill affecting even more farmers, enforcement of this rule will prove only more difficult.
“Today the House voted to rescind taxpayer-funded bonuses to wealthy businessmen on Wall Street, and I think it is equally important that we prevent millionaire corporate farmers and landowners from reaping huge bonuses in the form of government subsidies,” continued Kind. “As Americans from coast to coast struggle in this difficult economy, I think we can all agree that the very least we ought to be doing is enforcing the current law on the books to prevent people making more than $1.5 million from taking taxpayer money.”
Kind’s legislation, which was cosponsored by Rep. Jeff Flake (R-Ariz.), largely mirrors the announced plan of coordination between USDA and the Treasury Department by requiring USDA to submit the names or identifying information of an individual or entity signing up for commodity subsidy programs to the IRS, which would then use tax records to determine if the individual met the income eligibility requirements.
Those who are found ineligible would be shut out of subsidy programs for that year and would have to reimburse any payments that may have been made in error. The bill also strengthens penalties for individuals who falsify documents or intentionally withhold information in order to evade the limits.
Rep. Kind also supports President Obama’s attempt to reduce the income cap as outlined in his fiscal year 2010 budget proposal. He intends to introduce additional legislation soon to reduce the cap to $250,000 in average adjusted gross income, which was a part of the reform amendment he offered to the farm bill in 2007.