You’re Kidding, More Government Excess? | Citizens Against Government Waste

You’re Kidding, More Government Excess?

The WasteWatcher

I’ve written before about several reports released by the Government Accountability Office (GAO), which catalog duplication of and excess in programs across the government.  The GAO offers suggestions on reducing the duplication that would release funding for other government programs and deficit reduction.  You can find my prior blogs here and here.

Here are some more suggestions that I have pulled out of GAO’s 2013 report, “Actions Needed to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits.”

Limit Crop Insurance

Savings: $1.2 Billion per Year

Page 158 -  In fiscal year 2012, the crop insurance program provided approximately $116 billion in insurance coverage.  Crop insurance costs to the government have increased greatly since the average $3.1 billion per year price tag in fiscal years 2000 to 2006 to $7.6 billion per year between fiscal years 2007 to 2012.  Costs are expected to continue to increase, with an average yearly price tag of $8.9 billion per year between fiscal years 2013 -2022.

Because of budget constraints, there is greater focus on the growing costs of crop insurance, particularly since farm income is at record high levels.  According to the Department of Agriculture (USDA), net farm income for 2012 is expected to be $112.8 billion.  The top six years for net farm income during the last three decades have occurred since 2004.

Farmers can choose various levels or types of insurance.  They can insure against losses caused by poor yields or a decline in crop prices, or a combination of both.  The USDA’s Risk Management Agency (RMA) administers the federal crop insurance program and partners with 15 private insurance companies that sell the policies.  Part of the costs to the federal government for crop insurance includes paying for a percentage of the premium.  The level of premium subsidy can vary, depending on the type of insurance the farmer chooses and the geographic diversity of the crops insured.  For most policies, subsidies can range from 38 percent to 80 percent of the premium.  The average subsidy paid increased from 37 percent in 2000 to 60 percent in 2001 when the Agricultural Risk Protection Act’s subsidy rates kicked in.

It needs to be noted that crop insurance is unlike most other farm programs, such as the disaster assistance program, that have income and payment limits.  Crop insurance subsidies do not have such limits.

In light of this, the GAO recommends that either the amount of the subsidies be limited that can be received by an individual farmer per year or reduce the premium subsidy rates for all participants, or do a combination of both.  As an example, GAO said that if a limit of $40,000 per individual farmer for premium subsidies had been in effect for 2011, the cost savings would have been up to $1.0 billion to the taxpayers.

International Broadcasting

Savings Approximately $149 million

Page 117 - The purpose of U.S. international broadcasting is to communicate directly with people that live in countries with limited journalism alternatives and to inform and connect with them.  According to the GAO, our nation broadcasts to 175 million people through a variety of ways: radio, television, the internet, and mobile technology.

The GAO reviewed the Broadcasting Board of Governors (BBG) that had a budget of $752 million for fiscal year 2012.  While the Board recognizes it needs to reduce overlap in many of its program broadcasts and to focus its activities to where international broadcasts will have the greatest impact, the GAO believes they can do more.

In 2013, the GAO found that approximately 2/3 of the BBG language services, offices that produce content for particular languages and regions, overlap with a language service that is offered by another BBG unit.  The GAO found 23 instances of overlap that involved 43 of BBG’s 69 language services.

As an example, in eight cases that involve 16 services, the Voice of America and Radio Free Asia overlapped their activities.

The GAO recommends that the BBG ensure that their annual language service review includes systematic consideration of the cost and impact of internal overlap among all the BBG entities.

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