As billions flow to farmers, Trump administration faces internal concerns over unprecedented bailout

WASHINGTON — Senior government officials, including some in the White House, privately expressed concern that the Trump administration’s nearly $30 billion bailout for farmers needed stronger legal backing, according to multiple people who participated in the planning.

The bailout was created by the Trump administration as a way to calm outrage from farmers who complained they were caught in the middle of the White House’s trade war with China. In an attempt to pacify farmers, the Department of Agriculture created an expansive new program without precedent.

As part of the program, USDA authorized $12 billion in bailout funds last year and another $16 billion this year, and Trump has said more money could be on the way.


But two Department of Agriculture officials involved in the bailout program told The Washington Post they were worried the funding could surpass the original intent of the New Deal-era Commodity Credit Corporation, which is being used to distribute the money. The CCC, as it is known, had previously been used only to create substantially more limited programs. The officials spoke on the condition of anonymity to avoid professional repercussions.

Separately, some officials in the Office of Management and Budget also raised questions about the scope of $16 billion in a second round of bailout funds.

They pushed the Department of Agriculture to provide more legal reasoning for the effort, the officials said. In a statement, a USDA spokesman officials said the concerns raised by OMB were already resolved, however.

USDA attorneys have signed off on the bailout package, and the government has already issued more than $11 billion in farm bailout payments. More will be spent soon.

The concerns come at a crucial time for the program, as many farmers are relying on the funding, and congressional approval is required because the White House is nearing an annual $30 billion cap on CCC payments.


Independent legal experts agree that Agriculture Secretary Sonny Perdue has broad authority to unilaterally help farmers, including through the administration’s bailout program.

The bailout funds are part of the White House’s effort to contain an outcry from farmers who have complained that China and other countries have cut back on US purchases in retaliation for the higher tariffs Trump has imposed on a range of imports.

As US soybean exports have fallen, Brazil has stepped in and increased exports, worrying US farmers that a global realignment has taken place that will be hard to reverse. Trump has tried to assuage concerned farmers by approving the two rounds of bailout funds, and he repeatedly tells farm groups that his adversarial approach to trade will prove a huge win for them in the future.

‘‘As they have learned in the last two years, our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do — And I’ll do it again next year if necessary!’’ President Trump tweeted in August.

Trump has touted his financial support for farmers, but administration officials have said little publicly about internal consternation over the process.

White House aides are for the first time pressing Congress to increase how much the administration can distribute through the farm bailout before hitting the program’s legal spending limit this fall — even though farmers have already been promised billions in additional bailout funding.


Trump has said the bailouts are necessary to protect American farmers targeted by China for economic retaliation in the widening trade war, as China has responded to Trump’s trade moves with high tariffs on US agricultural exports.

Trump has promised funding in two different tranches. The first, announced in July 2018, included $12 billion, and at least two-thirds of that has already been distributed. The administration announced this May that it will award an additional $16 billion in payments to farmers in a second round of bailouts, as Trump prepares for his 2020 presidential reelection bid, which centers on crucial Midwest states with large agricultural sectors.

More than $2 billion of that second bailout has gone out, the department said.

The bulk of both bailouts consists of direct checks sent to farmers intended to compensate their losses from the trade war. There is little precedent for an open-ended farmer bailout of this nature.

‘‘It was obvious they were stretching their legal authority,’’ said one official in the Department of Agriculture of the administration.

Even some officials who believe the bailout is legally sound worry about its scope and the speed with which it is being implemented. ‘‘They’re doing it really fast and shorthanded,’’ said a former USDA official who spent several decades involved in reviewing new department regulations, but left the government earlier this year. ‘‘The agencies implementing it are stretched thin, and there’s immense political pressure to get the money out quick.’’


Several officials in the USDA and other government agencies defended the bailout, noting independent legal experts agree that the administration has wide authority to unilaterally act to help the nation’s farmers in a time of crisis. Trump has also argued the farm bailout is justified by China’s trade tactics as a way to ensure the US extracts concessions from that country.

In a statement to The Washington Post, the Department of Agriculture acknowledged OMB had raised concerns as part of its ‘‘normal clearance process’’ and said that OMB cleared the package before it was published in the Federal Register. The statement also said OMB has no outstanding requests about the bailout and that both bailout programs have been deemed legal by department attorneys.

USDA said multiple agencies within the department helped develop and implement the bailout program.