What is in this article?:
Crop insurance, which received $6 billion in cuts in 2010, will be getting another $8.3 billion in cuts under the White House proposal. While the plan says crop insurance “is a foundation for our farm safety net,” the plan says it costs the government $8 billion/year to run. (Keep in mind that the budget cuts being proposed would be over a 10-year period.) While the plan says crop insurance companies agreed to changes that saved $6 billion over 10 years, the administration believes there are additional opportunities for streamlining the administrative costs of the program.
There will be a $2 billion cut to the return on investment allowed for crop insurance companies. There will be a $900 million cap on administrative expenses that will save $3.7 billion, and changes to the CAT program will save $600 million. The White House plan proposed to reverse the Congressional action that reduced the premium cost to farmers in an effort to increase participation. It says participation averages about 83% so high premium subsidies are no longer needed, and it will reduce the subsidy level for the higher coverages of crop insurance to save $2 billion/year.