Senate debates whether repealing sugar subsidy will harm consumers, job creation

{mosads}The amendment, sponsored by Sen. Jeanne Shaheen (D-N.H.) phases out subsidies for crops like sugar beets and sugar cane over three years, from 2012 through 2014.

Conrad said claims that the program keeps the cost of sugar products high or that it hinders the confectionery industry in the United States were completely wrong.

“First of it all, it is said that the sugar program has a high cost for taxpayers. That is false. It is also said that it keeps sugar prices artificially high,” Conrad said. “That is false. It is said that the sugar program drives the confectionery industry out of the United States. That is is false. It is said that the sugar program impedes imports into the United States. That is false. And it is said that consumers will benefit from eliminating the sugar program.”

Conrad’s defense came as the Senate considers Shaheen’s tabling Shaheen’s amendment as well as another one by Sen. Rand Paul (R-Ky.) on Wednesday. When Conrad came to the floor, the chamber had not decided exactly what time it would vote on whether to kill the sugar amendment.

Conrad stressed that the sugar program does not hurt U.S. imports.

“Mr. President, here are the facts. The United States in the period from 2008-2009, from 2010- 2011, is the biggest importer of sugar in the world. So this program is impeding imports into the United States?” Conrad continued. “Well if it is, it isn’t doing a very good job of it because the United States is the biggest importer of sugar in the world.”

Sen. Pat Toomey (R-Pa.) responded to Conrad’s speech, saying that the program is damaging to consumers and hinders job creation.

“I mean think about it, everybody consumers sugar,” Toomey said. “There’s sugar in so many products that it’s impossible to avoid this inflated cost. And it should really be seen as an inflated cost. It’s as though government were imposing a tax on sugar. It doesn’t work literally that way but it has that economic effect. It’s completely equivalent.

“And who gets hit the hardest by this? It’s the lowest income Americans. It’s as regressive a tax as you can possibly have. Think about it: wealthy people devote a very, very small small percentage of their income to food. They have plenty of money they spend on other things. But if you’re a low-income American then you necessarily are devoting a very large income of your percentage to food. And so much of it is artificially inflated by cost by our own federal government.”

Shaheen, who submitted a number of amendments that would affect the sugar program, then defended repealing the subsidy program. Shaheen said the program “essentially manipulates the market.”

“It controls how much sugar is grown in the United States, it restricts how much sugar comes into the United States from outside of the country, and it sets a floor on sugar prices by providing a government guarantee to sugar growers on what they’re going to get paid,” Shaheen said.

Shaheen added repealing or at least reforming the program would not actually harm job creation.

“There is no evidence that sugar reform is going to hurt job creation. It’s going to help,” Shaheen said. “