Big Sugar: Sanders And Rubio Share A Sweet Tooth
This post originally appeared in Forbes
U.S. Senator and Democratic presidential candidate Bernie Sanders (I-VT) wants to portray himself as a fierce opponent of the status quo in Washington. He regularly excoriates American corporations for not paying their “fair share” of taxes and for buying politicians. Earlier this summer, he was the sole member of the Democratic caucus to vote against reauthorizing the Export-Import Bank, an indefensible outlet for corporate welfare. But on one issue, Sanders walks in lockstep with the political establishment on Capitol Hill—Uncle Sam’s sugar-buying scheme.
The federal program that resembles a Soviet Union relic works as follows: the U.S. Department of Agriculture guarantees a price floor for American sugar, below which it spends hundreds of millions of dollars to buy up excess sugar and bump the price back up to the minimum. Uncle Sam then sells the sugar at a steep discount to ethanol producers. Limits on imports also artificially prop up the prices that domestic sugar producers can charge.
American consumers get fleeced on two fronts. Not only must they foot the bill for the subsidy scheme, they also have to pay higher prices at the grocery store for sugar, cakes, and confections.
To support this scheme, the sugar industry disperses millions in campaign contributions and lobbying expenses. In 2014, five sugar-related organizations spent a combined $8.3 million on lobbying. Last year’s total was not an aberration. American Sugar Alliance alone spent $18.4 million on lobbing over the past decade. The U.S. Beet Sugar Association has spent at least $1.8 million each year on lobbying since 2008.
The industry bankrolls the campaigns of lawmakers on both sides of the aisle. One group, American Crystal Sugar, donated $2.5 million to the 2014 campaigns of 248 lawmakers, along with national party committees and PACs.
Dozens of Republican and Democratic senators have accepted funds from the sugar industry in the past three electoral cycles. The top recipients in those cycles were Debbie Stabenow (D-MI) with $82,230, Thad Cochran (R-MS) with $81,500, Blanche Lincoln (D-AR) with $76,300, Bill Nelson (D-FL) with $70,250, and Mary Landrieu (D-LA) with $69,700.
For all his proclaimed independence, Sanders cannot stop himself from gorging on the sweet deal the sugar industry offers. In the past two election cycles, ACS donated $20,000 to his campaigns. This ranks ACS among Sanders’s top 20 donors, ahead of groups such as Planned Parenthood, the Teamsters, and the American Federation of Government Employees.
Big sugar’s contributions and lobbying have paid off. Sanders has consistently voted for the annual farm bill, which reauthorizes agricultural subsidy programs. The most recent farm bill left the sugar program unchanged. Along with 52 other senators, Sanders also voted against a 2012 amendment sponsored by Senator Pat Toomey (R-PA) to the Agricultural, Reform, Food, and Jobs Act that would have reformed the sugar subsidy program.
Sanders frequently talks about the decline of the middle class, but he votes for a program that increases the financial burden of food for working families. An Iowa State University study by John Beghin and Amani Elobeid found that the sugar program costs consumers between $2.9 billion and $3.5 billion each year. This increase translates into an additional $30 a year for the average American household, on top of the millions of dollars the sugar industry receives in taxpayer-subsidies.
Increasing prices for American families by granting a politically-connected industry special favors is, unfortunately, a bipartisan priority. Senator Marco Rubio (R-FL), another presidential candidate, normally opposes corporate welfare programs such as the Export-Import Bank, but vigorously defends the sugar program in the name of national security. Dismantle our sugar program, he says, and sugar growers here will not be able to compete with their subsidized rivals in other countries.
Rubio’s support of sugar subsidies likely flows from the $25,200 he received in 2014 from his long-time backer Fanjul Corporation, which is a sugar producer based in his home state of Florida. Florida Crystals, a subsidiary of Fanjul Corporation, has given Rubio $105,500 over his career in politics, the fourth-highest total among his donors.
Rubio’s national-security argument is misguided. As we argued in an Economics21 op-ed last year, the price-support scheme in America hurts the country regardless of what other governments do. In the absence of the sugar program, industries such as confectioners who depend on sugar as an input would gain between 17,000 and 20,000 new domestic jobs due to lower prices. Dismantling the program would also stop confectioners from moving abroad to take advantage of cheaper sugar.
Fortunately, confectioners and others hurt by the sugar program have also found a voice in Congress. Earlier this year, Senator Jeanne Shaheen (D-NH), along with 16 co-sponsors of both parties, introduced the Sugar Reform Act of 2015 to weaken the sugar industry’s price supports. Though this bill is a step in the right direction, it has, perhaps unsurprisingly, gone nowhere in Congress.
Sanders claims to hate corporate welfare. Rubio claims to love free markets. To prove their convictions, both candidates should reevaluate their support for a sweet program that carries bitter consequences.
Jared Meyer is a fellow at Economics21 at the Manhattan Institute for Policy Research. You can follow him on Twitter here. Preston Cooper is a policy analyst at the Manhattan Institute for Policy Research. You can follow him on Twitter here.