President Late with Farmer's Loan Money

Mar 29, 1999

While pleased that USDA is making some loan money available to producers, House Agriculture Committee Chairman Larry Combest (R-TX) questioned why the Administration is acting only now to cover a funding gap that has existed for well over a month.  Anticipating $1.1 billion in loan funds with House and Senate passage on Thursday of H.R. 1141, the president on Friday directed USDA to shift $30 million away from the local budgets of overworked USDA county offices, who process the farm loans.  The $30 million will back approximately $300 million in new loans.

"After months of watching the loan funds dwindle, it is not clear why the president has waited so long to help farmers, since it now seems he could have done the same shift of funds much earlier," said Chairman Combest.  "I appreciate that he is responding, but I am concerned why he acts late in March, and shifts funds away from overworked county offices to do this.  County offices are behind in efforts to cope with delays by USDA's Washington bureaucrats, and I see the president taking their funds away now as more of a slap, when what they could really use is a pat on the back."

More than two months after watching the loan funds evaporate before requesting a supplemental budget, the president on Friday ordered salaries and operating funds shifted away from overworked USDA county office employees to temporarily fill his funding gap.  USDA county offices have reported backlogs in loan processing, as well as being swamped with disaster claims still not paid out by USDA's Washington bureaucracy.

"USDA expects farmers to wait until June for cash payments from last year's disaster due to overwork heaped on local USDA county offices, and now stands by while the president takes funds from backlogged offices.  I want USDA and the president to stop shifting money around in Washington and send it down to the county offices where producers need it for field work," said Combest.

The chairman noted that in February 1998, the president moved to cut 1100 USDA staff, but Congress saved the local jobs.  In February of this year, USDA proposed cutting 752 positions, yet on February 26 asked Congress for temporary staff — whose funding would expire before the busy season of the fall harvest.

Chairman Combest said that Congress' own early release of $472 million earlier this month (H.R. 882) provided more loan money after the president's delay in requesting the $1.1 billion package replenishing farm and ranch loans.

The president faces another critical deadline for signing H.R. 1212, which will extend the sales closing date through April 12 for producers to buy new crop insurance coverage.