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Tuesday, September 27, 2016

Cut by cut, the forced budget reductions known as the sequester are beginning to affect millions of Americans.

Head Start education programs for low-income students are being slashed. So are medical services for two million American Indians living on reservations and in Alaska.

The Army is suspending tuition assistance for soldiers hoping to enroll in classes, while scholarship funds have been curtailed for children of troops who were killed in combat.

Cutbacks at U.S. Customs and Border Protection are causing long waits and security concerns at Miami International Airport. And the U.S. Department of Agriculture will furlough 6,200 food inspectors for 11 days this summer, which the agency says will create an $8 billion delay in meat exports.

Still, not everyone who depends on the federal government is suffering in these austere times.

According to The Wall Street Journal, the USDA is on the verge of purchasing 400,000 tons of sugar in a massive bailout of domestic sugar processors. The move would cost taxpayers about $80 million.

It’s the sweetest of deals for the big companies that grow cane and beets. For years the government has guaranteed an artificially high price for American sugar, undercutting foreign competitors and inflating consumer prices for everything from soft drinks to breakfast cereal.

Last year, sugar processors under the price-support program borrowed $862 million from the USDA. The loans were secured with about two million tons of sugar that was expected to be harvested.

And the harvest was very good. Too good, apparently. The market got flooded.

Between February, 2012 and February, 2013, the price of beet sugar fell from 51 cents a pound to about 28.50 cents. Raw cane dropped from 33.57 cents to 20.72 cents.

Consequently, the government’s loans to processors are in danger of default. To avoid that, the USDA would take all the sugar and sell it at a discount rate to producers of ethanol, who’d mix it with the corn from which that fuel is distilled.

The transaction would result in Uncle Sam losing 10 cents on every pound of sugar sold, which adds up to an $80 million hit on 400,000 tons of product.

What a brilliant system.

The major beneficiaries of this bailout would be cane growers in Florida and beet operations in Minnesota, Michigan and North Dakota. Big Sugar has outsized political clout in Washington, as evidenced by the silence of so-called fiscal conservatives.

Heavy campaign contributions are spread among Democrats and Republicans alike. Barack Obama took money from the sugar industry, as did Mitt Romney. Hefty donations went to both of Florida’s senators, Bill Nelson and Marco Rubio.

  • nobsartist

    Sugar- The reason America hates Cuba.

    800 MILLION for sugar growers but NO jobs plan?

    Tar and feathers for both parties.

    • m8lsem

      I’m with you for the Republicans, the ones who have stopped every initiative in Congress. unless it was their own and the President didn’t endorse it, but those are crazy initiatives. It ill behooves one to tar with equal fervor not only those who stand in the way, but also those who want to move on down the road.

  • johninPCFL

    Let’s see here. Sugar – dissolve in water and add yeast to make ethanol. No impact on food prices, waste is vegamite (maybe export it to Australia.) Corn – pulp out, mash, add yeast to make ethanol, waste is a thick goo closely related to swamp muck that even pigs won’t eat. Food price increases and cattle feed price increases.
    So obviously the answer is to buy and flush the sugar, then continue to make ethanol from corn.

  • Lovefacts

    Why aren’t subsidies to big business considered subsidies/entitlements yet programs that help people and society are? I’ll only believe the t-party and conservatives in general care about the debt when they’re willing to put corporate welfare on the table. If they got rid of that, they wouldn’t need to cut programs that help the poor or veterans or middle class.

  • David Turrentine

    Until Bill Clements Texas had the biggest government sugar subsidy in the nation. All of the Sugar Produced by the Imperial Sugar Company was grown by convict labor at the Sugarland Prison farms.

  • howa4x

    Just shows how sweet the lobbying is for the sugar industry. Even a tea party favorite like Rubio is protecting them. Where is the tea party? Why don’t they start yipping about this? Just shows what real windbags they are. Where are all the fiscal conservatives? They must all have a sweet tooth.

    • Sand_Cat

      Even? You’re surprised at tea party hypocrisy? I’d say it’s the least we can expect.

      • howa4x

        No not ever surprised. Just want to call them out for what they are every chance I get

  • idamag

    The best thing we, the people, can do it not eat sugar until sugar caves in. During WWII, people ate a lot of honey and molasses. Sugar is addictive. Look for sugar free. As long as we cannot break the addiction, sugar will own some of our government representatives.

    • davidfishman2001

      Where do you think molasses comes from?

      • idamag

        You are right, molasses is a by-product of sugar. Out here, during the war, it came from beets.