TAXPAYER WATCHDOG URGES END TO MILK TAX | Citizens Against Government Waste


Press Release

For Immediate ReleaseContact:Sean Rushton or Melissa Naudin
June 7, 2001(202) 467-5300


Washington, D.C. – The Council for Citizens Against Government Waste (CCAGW), which has led the opposition to dairy compacts, today released the following letter to be sent to President George W. Bush urging him to kill the Northeast Dairy Compact.  Signatories to the letter include more than 100 grassroots leaders from 35 states of CCAGW's Taxpayer Action Network.


We, the undersigned state representatives of the Council for Citizens Against Government Waste’s (CCAGW) Taxpayer Action Network, urge you to oppose any extension or expansion of dairy compacts.  While providing only a very limited short-term gain for dairy producers, dairy compacts have long-term negative consequences for consumers and taxpayers.

In artificially raising milk prices, dairy compacts impose a regressive tax on a basic food, disproportionately affecting children and the poor.  This “milk tax” makes milk less affordable, and, at the same time, encourages excess production.  Excess milk production ends up costing taxpayers, as evidenced by last year’s purchase of over half a billion dollars worth of surplus milk powder by the federal government.  The higher milk prices set by dairy compacts hit Americans twice, once at the store in a hidden tax, and again in higher tax burdens to cover rising government costs.

CCAGW, with more than one million members and supporters nationally, has been at the forefront of the battle against these milk-pricing schemes.  In 1997, for example, more than 6,000 CCAGW members from right within the heart of the Northeast Interstate Dairy Compact area petitioned the Secretary of Agriculture asking him to deny approval for the compact.  Unfortunately, their warnings against the likely negative impacts fell on deaf ears and the New England “milk tax” began later that year.

If legislation extending and expanding dairy compacts is enacted, they could swallow up a vast percentage of the country and the cost to Americans would dwarf the $100 million “milk tax” that has been imposed on consumers in the six New England states that make up the Northeast Compact.  While the New England region produces less than 3 percent of the nation’s milk supply, expanding the Northeast Compact and creating a Southern Compact could bring almost half of the nation’s milk supply and two-thirds of the nation’s consumers under the power of milk-pricing cartels.  The “milk tax” for this expanded dairy compact region could amount to as much as $2 billion annually.

We hope your administration will come down on the side of taxpayers and consumers and send a clear message to Congress that dairy compacts are unacceptable and bad policy.  The evidence is overwhelming.  It is time to end this regressive “milk tax” on Americans.


[Signatories available upon request]

CCAGW is the lobbying arm of Citizens Against Government Waste, a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

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