Obama cites 'millionaire farmers' as one example of where to cut the federal budget

President-elect Barack Obama said this hour that "millionaire farmers" who get federal subsidies are an example of the cuts that need to be made in the federal budget at a time of economic and fiscal austerity.

"Millionaire farmers received $49 million in crop subsidies even though they were earning more than the $2.5 million cutoff for such subsidies," Obama said at a press conference, citing a Government Accountability Office report. "If it's true it is a prime example of the kind of waste I intend to end when I am president." During his campaign, Obama voted for the new Farm Bill but said he would like subsidy programs to do more for smaller farmers and less for large ones, including corporations. Today, he said he would target "special interest tax breaks and corporate subsidies." UPDATE, Nov. 26: In an editorial, The Washington Post noted Obama's vote and said of the GAO figures, "The supposed amount involved -- $49 million over four years -- is puny in the context of a $3 trillion annual budget."

Part of Obama's language at the press conference appeared to come from Michael Doyle of McClatchy Newspapers, who wrote in his story about the GAO report, "At least 2,702 farmers nationwide received subsidies between 2003 and 2006 even though they were making more than the $2.5 million gross income cutoff [which the new Farm Bill lowers to $750,000]. The unwarranted payments totaled $49 million and exposed enduring Agriculture Department management problems, investigators concluded."

The report says 1.8 million farmers get subsidies. It cites several specific examples of abuse and said the Department of Agriculture "cannot be assured that millions of dollars in farm program payments it made are proper" because it doesn't have enough access to Internal Revenue Service data. USDA's Farm Service Agency replied that it "made the best use of the resources available" and "the reported improper payments amounted to less than 1 percent of total crop subsidy payments," which total $16 billion a year, Doyle writes.

"USDA said it doesn’t have the legal authority to cross-check its program payments with IRS income tax data," notes Agri-Pulse. "GAO wasn’t impressed by the response, pointing out that not only could USDA seek the needed authority but that even without IRS data, there are ways to sample individuals receiving farm payments to test for income eligibility – something GAO says USDA hasn’t tried."

For a summary of the study, click here. For a PDF of the full report, click here.