The Democrats’ Build Back Better Federal Budget is Dead. Long live the ‘Minibus!’

Late last week, Senator Joe Manchin (D-WV) put the final nail-in-the-coffin for the Democratic majority’s Build Back Better 2020 campaign promises. There will be no ambitious, transformative, bold federal investments in poverty reduction, support for poor and working-class and middle-class families, nor reduction of climate pollution. There will be no increase of the minimum wage, end of the deeply-faulted “tipped wage” system, nor transformation of the care economy.

There will be no tax increases on corporations and billionaires to pay for these investments. There will be limited federal action to reduce economic inequality.

Instead, the Democrats are pivoting to a very narrow package of budgets for Fiscal Year 2023 (October 1, 2022-September 30, 2023) that they hope will get through the Congressional gauntlet in relatively short order. Dubbed the “minibus,” their much-more-likely-to-pass budget proposal will still, thankfully, have some significant benefits for rural people and places.

The likely federal package for USDA, for instance, includes the following amounts over federal farm bill “baseline spending”:

  • $4.2 billion in additional funding (and an additional $47 Billion in loans) for USDA Rural Development programs on rural internet expansion, telecommunications, energy infrastructure, water and wastewater systems, etc.
  • $3.8 billion in additional agricultural research.
  • $3.1 billion in additional farm and conservation program spending.
  • $1.8 billion in additional international food aid.
  • $10.7 billion in additional nutrition support for SNAP, WIC and school food programs.

These amounts are a $2 billion discretionary budget (8%) increase in USDA + Food and Drug Administration over the current operating budgets. Other rural-critical budget increases, such as a $6.8 billion increase (18%) in Departments of Interior, Environment and Related Agencies Appropriation.

This matters to rural America because we are much more dependent on federal spending and federal policy than our urban neighbors. We are older and sicker and poorer, on average, and our economies in rural are much more driven by “entitlements” like Social Security, Medicare, federal nutrition programs, and more.

I know rural politics in many places can fail to acknowledge this reality. Instead, there is perception of the “producers” in rural versus the “parasites” in urban America. The sooner we can get beyond politicking and legislating based on stereotypes and misinformation the better, but I don’t see that happening any time soon.

Instead, I’m afraid we should prepare ourselves for budget cuts, austerity, increased interest rates, and recession. I hope not, Keep It Rural readers, but if I was a betting man…

Rural Reading List

This week’s rural reading list has more on Congressional support (or lack thereof) in rural, a look at LGBTQ+ health in rural, an investigation into Midwestern Corn/Soy Belt frac sand mining, and some analysis of rural Democratic politics in Texas. Check it out:

Analysis: Bridge Over Troubled Coffers

Analysis in the Daily Yonder from the Wisconsin Farmers Union on the need for rural road and bridge repairs and maintenance. Where is the money going to come from?

Recent Studies Uncover Barriers Affecting the Health of Rural LGBTQ People

In this Yonder story, we learn that current research shows “there is much work left to be done to support the health of queer and trans people, especially in rural areas.”

From Farmland to Frac Sand

One of my favorite farm and food reporters, Lisa Held, investigates the rural impact of frac sand mining in rural Illinois for Civil Eats.

At State Convention, Democrats Acknowledge Need to Sharpen Focus on Rural Texas

This Houston Chronicle story explores an unsuccessful attempt by a group of Texas Democrats to elect a new party leader from the state’s Texas Democratic Party Non-Urban/Rural Caucus.

One More Thing: Rural Income Is $20,000 Short

We all know that “inflation” is a reality in our lives in 2022. And we know that rising costs for everything hurt those of us with lowest incomes the most, particularly those with fixed income. And what’s more, we absolutely know that inflation is on the ballot in the November 2022 midterms, as well as in elections throughout the year.

Yesterday, Kristi Eaton wrote an important Daily Yonder analysis that put some numbers to the differences between inflationary impacts on rural and urban households. In her story, “Inflation’s Impact Likely to Be Rougher on Rural Households,” Eaton makes important observations based on Iowa State University rural sociologist David Peters’ report: Impact of Inflation on Rural Household Expenses, 2021-2022.

“Rural household disposable income fell by an estimated 38% from 2021 to 2022, while urban household disposable income fell by about 17%,” Eaton wrote.

Rural expenses rose from 84% of post-tax household income in 2021 to 90% in 2022 because of inflation, primarily fuel costs. Urban household costs also increased during the past year, but the difference was 80% to 84% according to Peters’ estimates.

While this isn’t that much of a surprise on the numbers alone, what struck me was the actual disparity between rural and urban post-tax household incomes in the study. In urban areas, the average income is $80,000 per household. In rural, the average is $60,000, a 25% reduction. Using Peters’ definition of rurality and federal Bureau of Labor Statistics data, that means rural households make $20,000 less per household than our urban neighbors. That’s a big difference, Keep It Rural readers, amounting to $1,667 per month per household. Even factoring in lower costs for housing in most rural places (but not all), that’s a big disparity. And it’s something that needs more attention.

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