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Obama Takes Aim at the Midwest
Today, in his deficit speech to the county, President Obama promised to make additional spending cuts by reforming agricultural subsidies. Agriculture subsidies are government programs that provide benefits, usually money or crop insurance, to stabilize food production and prices in the United States and guarantee that farmers have the income necessary to continue to produce food. Although the President did not specifically outline what the cuts entail, it is not difficult to imagine that the effects will disproportionately affect the Midwest. Is this smart geographical warfare?
Commodity subsidies in the United States totaled $167.3 billion from 1995-2010, approximately $11.2 billion per year. Of the twelve states making up the Midwest, all but one rank within the top 15 states receiving agricultural subsidies. The number one crop in the nation is corn. Iowa tops the list of the six corn producing states (Nebraska, Illinois, Indiana, Minnesota, Ohio) that provide 70% of the total amount of corn in the United States; all Midwestern states. As for the number two crop in the nation, Iowa again tops the list of the five largest soybean producing states (Minnesota, Illinois, Indiana, Ohio); again, all Midwestern states.
The potential impact from a change in agricultural subsidies could range from higher unemployment numbers in the Midwest to drastically higher food prices, even to national food shortages. Already strained state budgets will face dire economic impacts. The Federal Unemployment Account (FUA) provides loans to states to pay for unemployment benefits, with many of the highest balances owed by Midwestern states (MI, IL, IN, OH, WI). As states prepare for downgrades and super committee cuts, paying back federal unemployment benefit loans will additionally stretch budgets. Without subsidized farming in many states, revenue will fall. Many of the impacts will depend on the specific legislation passed in the future, but hard-working Midwestern farmers may share their disapproval and concern over fiscal uncertainty at the polls.
Eight of the twelve Midwestern states in the U.S. are "red" states-the die-hard red states (Kansas, Missouri, Nebraska, North Dakota, and South Dakota) carrying only a combined 27 electoral votes. With the exception of 2008, Ohio and Indiana are almost exclusively "red" states as well, carrying 18 and 11 electoral votes respectively, and supported Republican Presidential candidates in 2004, 2002, and in Indiana, 1996. Just three of the twelve states (Minnesota, Michigan, and Wisconsin) are solidly Democratic according to Presidential voting trends, but it may be too soon to count on even these states. It is likely that all twelve Midwestern states will be in an uproar about the possibility of cutting subsidies-enough so to alter their voting trends.
Election predictions already name Ohio as a state President Obama must win again in 2012. The true swing-state is Iowa, which often leads the way for the rest of its geographical companions. Iowa curiously seems to be an early indicator of national trends and generally votes with the winner in Presidential elections. In the last ten Presidential elections, Iowa voted with the nation seven times. Although Iowa voted for President Obama in 2008, to shortchange the state that produces the highest percentage of the U.S.'s top two food commodities and the receiver of the most subsidies may make for a red state in 2012.
Agricultural subsidies are tricky, which may be why politicians generally avoid them or backtrack on promises to cut them. Not only will legislation disproportionately affect the budgets of Heartland states, it also may play a more influential role in the upcoming Presidential election than a cursory count of electoral votes and voting trends indicate. If President Obama pushes to alter agricultural subsidies, he may inadvertently lose the 2012 election.