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Cato Daily Dispatch for October 24, 2001

More U.S. Military Head To Philippines
Farm Bill In The Balance
House To Vote On Stimulus

More U.S. Military Head To Philippines

Five U.S. military advisers arrived in the southern Philippines yesterday, joining about 25 U.S. troops who arrived last week to train Philippine forces fighting the Abu Sayyaf rebel group, which is alleged to have ties to Osama bin Laden's al Qaeda network, according to The Washington Post.

A Philippine military spokesman, Lt. Col. Darwin Guerra, said the five U.S. soldiers arrived in the southern city of Zamboanga to meet with senior soldiers.

In "Instability in the Philippines: A Case Study for U.S. Disengagement," Senior Fellow Doug Bandow argues that the United States should end its security commitments to the Philippines. The main problem facing the Philippines is domestic unrest and separatist violence, Bandow says. Although the Pentagon has attempted to justify its military presence as a means of dealing with humanitarian operations, drug trafficking, terrorism and environmental degradation, he says, "there's little the U.S. military can or should do to address any of them."

Farm Bill In The Balance

The Bush administration is pressing the Senate to delay finishing a major revision of farm programs until next year, offering assurances that it will negotiate for more spending, according to the Associated Press.

Agriculture Secretary Ann Veneman has telephoned senators and farm groups in recent days, and senior White House officials pressed their case in a meeting late last week with farm lobbyists. Participants in the meeting said they received assurances that the funding level was negotiable.

But Senate Majority Leader Tom Daschle (D-S.D.) says existing programs are inadequate and wants to finish a new farm bill before 2002. "No bill this year puts producers in a bad position for another year,'" said Daschle spokesman Jay Carson.

In "Real Emergencies and Farm 'Emergencies,'" Chris Edwards and Tad DeHaven write that "farming is not in an emergency, and subsidies simply enhance middle class farm lifestyles at the taxpayers' expense."

In "The Farming of Washington: How U.S. Agricultural Policies Affect the American Farm," Don Doig explains that many, if not all, of the problems facing U.S. agriculture can be traced to ill-advised programs designed to improve the economics of farming. He writes that "since the 1930s, a complex web of federal farm subsidy programs has been woven into place, to try to shield farmers from market instabilities and to try to guarantee some measure of economic continuity. These programs may have created more problems than they've solved, and one would be hard-pressed to find any clear-cut, lasting benefits."

In "Archer Daniels Midland: A Case Study in Corporate Welfare," James Bovard uses ADM as a case study to uncover the culture of rent-seeking in Washington. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government.

House To Vote On Stimulus

The House was expected to vote today on a Republican-backed stimulus plan that would inject $100 billion into the economy over the next year through business tax breaks and checks to workers who did not receive earlier rebates, according to Reuters.

The plan, which passed the tax-writing House Ways and Means Committee earlier this month on a party-line vote, has been called too generous by the White House and has been criticized sharply by Democrats, who say it does not do enough for workers who lose their jobs and gives major companies a windfall by retroactively repealing the corporate alternative minimum tax.

In "Business Tax Cuts Crucial in a Slowdown," Director of Fiscal Policy Studies Chris Edwards says it makes the most sense to aim a tax cut directly at the core problem, which is slumping investment in machinery and equipment.

Earlier this month, the Cato Institute hosted the policy forum "Is Fiscal Stimulus Desirable? If So, What Works Best?" Speakers included Douglas Holtz-Eakin, chief economist, Council of Economic Advisers, Chris Edwards, director, Fiscal Policy, Cato Institute, Rep. Jim Saxton, chairman, Joint Economic Committee, Alan Reynolds, Cato Institute senior fellow, and William A. Niskanen, Cato Institute chairman.